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This is How Progress in Crypto Looks Like, According to Buterin

Sead Fadilpašić
Last updated: | 4 min read

Looking into the crypto-related issues, Vitalik Buterin, co-founder of Ethereum, finds that a “significant progress” is seen in the last five years across the board, though some issues have been tackled with more success than the others.

Source: iStock/altmodern

Buterin took to his website to list sixteen main technical problems plaguing crypto, which he first described in 2014, and to discuss what progress has each seen. Each progress has been given a status description.

“Great theoretical and practical progress”

Arbitrary proof of computation has been solved, Buterin says, by building SNARKs (succinct non-interactive argument of knowledge). It allows to prove possession of certain information, e.g. a secret key, without revealing that information, and without any interaction between the prover and verifier. While there aren’t issues in fundamentals anymore, he says, SNARKs still have issues in details, but they are “extremely useful” as a privacy technology and as a scalability technology.

“Solved as far as we can”

Ethereum settled on its proof of work algorithm called Ethash, known as a memory-hard algorithm, which has proven “remarkably successful” at ASIC (application-specific integrated circuit) resistance, says the founder.

“Great theoretical progress, pending more real-world evaluation”

As even the tiniest crypto babies know, scalability has been one of the main problems in the Cryptoverse since its inception. Now, however, “scalability is one technical problem that we have had a huge amount of progress on theoretically,” says Buterin, though further progress is “incremental.” Among the important technologies introduced as solutions to this issue are sharding designs, random sampling, fraud proofs, proofs of custody, data availability proofs, and other developments. Though a number of challenges remain to be solved here, the good news is they can be “solved by just thinking about them.”

The proof of stake consensus mechanism, which should be implemented by Ethereum also, is another issue with great theoretical progress. Among many other interesting algorithms, says Buterin, which in many cases achieve “economic finality,” including in the much-anticipated Ethereum 2.0, by punishing validators caught violating the protocol, Buterin lists Casper FFG, Tendermint, HotStuff, and Casper CBC. “Eth2 phase 0, the chain that will implement FFG, is currently under implementation and enormous progress has been made.”

“A lot of theoretical progress, though still a lot to go, as well as more real-world evaluation”

Though there are many blockchains that plan to use proof of storage protocols, the questions of its performance “in the wild” and centralization still remain.

“Some progress”

This is the largest category, which also includes crypto market volatility. MakerDAO was launched and has been stable for almost two years, Buterin says, but the tough economic conditions of 2019 it survived, “were by no means the toughest that could happen,” so challenges remain.

In this category, Buterin also places funding public goods, a problem with no large breakthroughs so far, as well as the timestamping technology. Though Ethereum hasn’t had significant issues with a 13-second block time, it hasn’t been tested under serious attacks, he says. Solutions such as network-adjusted timestamps proposals are out, which also need testing.

Regarding hash-based cryptography, “the fact that not just signatures, but also general-purpose zero knowledge proofs, are possible with just hashes was definitely something I did not expect five years ago,” says Buterin, “I am very happy that this is the case.” But here too, problems like the size of proofs or aggregate signatures remain.

Furthermore, despite many attempts at anti-Sybil systems, there’s still a growing need for a human-based anti-Sybil system. Finally, there’s the so-called ‘oracle problem,’ where strides have been made, but “a real-world test of the forking mechanism,” among other challenges, still awaits.

“Some progress, some change in focus”

In the area of determining value of public-good contributions, determining tasks and determining quality of completion have been deemed difficult to separate. However, quadratic funding has been discovered and tried in real life. As Buterin explains, it’s a mechanism where individuals can make donations to projects, while based on the number of donors and the amounts donated, a formula is used to calculate how much they would have donated if they were perfectly coordinated with each other, thinking of each other’s interests.

“Slow progress”

A solution to code obfuscation is still elusive, Buterin finds. Obfuscation, however, is useful, as he describes an example use case for it: a program with a private key where the program only allows the private key to sign certain messages. Another area that needs more work is reputation systems.

“Probably not feasible, with one exception”

Useful proof of work consensus mechanism, used by Bitcoin also, is unfeasible for a number of properties- and time-related issues, but zero knowledge proofs of aspects of blockchain validity may just be an exception. Still, “the total amount of computation that realistically needs to be done is still much less than the amount that’s currently done by proof of work miners,” Buterin says, “so this would at best be an add-on for proof of stake blockchains, not a full-on consensus algorithm.”

“No progress, problem is largely forgotten”

Proof of excellence remains an unexplored solution to the problem of token distribution. There hasn’t really been an attempt at verifying human creativity directly, says Buterin, “and with recent progress on AI the problem of creating a task that only humans can do but computers can verify may well be too difficult.”
Learn more: Vitalik Buterin on The Five Biggest Misconceptions in Crypto