"Fortune" Magazine Interviews Vitalik Buterin and His Father: Short-Term Fear in the Market, Speculators Will Be Eliminated

In a recent interview with Fortune magazine, Vitalik and Dima discussed their journey in the crypto space, Ethereum's regrets and visions for the future of the industry, the anticipated merge, and the collapse of the Terra ecosystem.

This article is authorized for reprint from PANews, original article here.

• Original Title: "Ethereum creator Vitalik and his father, Dima Buterin, on this ‘morally clarifying moment’ and why there’s more to crypto than money"
• Original Source: Taylor Locke, Fortune
• Original Translation: Biscuit, Chaincatcher

Ethereum founder Vitalik isn't worried about the current downturn in cryptocurrencies and dislikes seeing his creation being used for speculation.

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Vitalik's father, Dmitry Buterin, often referred to as Dima, is a Russian-born engineer and entrepreneur who moved his family to Canada, where Vitalik learned about Bitcoin in his teens from his father.

Vitalik and Dima told Fortune magazine that they are accustomed to the volatility of cryptocurrencies, but this Father's Day, this prominent father-son duo in DeFi conveyed a different message: the various use cases of cryptocurrencies.

Vitalik told Fortune that cryptocurrencies have had significant fluctuations in the past and will continue to do so in the future. While downturns are challenging, they are often periods that nurture significant projects.

Despite being a billionaire, Vitalik explained that money has never been his focus or motivation. He dislikes Ethereum being used for speculation and believes that blockchain networks have more use cases beyond finance.

Vitalik and Dima hope to see more applications beyond finance while continuing to improve Ethereum and its technology, actions they have already taken. After Russian President Vladimir Putin announced the invasion of Ukraine in February, Vitalik and Dima supported The Ukraine DAO, a decentralized autonomous organization that raised millions of dollars to support the Ukrainian people in the war. Both father and son made donations to the DAO, with Dima even being a multi-signature wallet manager for the DAO organization.

Sometimes, Vitalik shares his thoughts on the future of blockchain on his website. For example, he recently discussed the idea of Soulbound Tokens, where records of personal credentials can be stored on the chain. Additionally, he wrote about Ethereum's highly anticipated merge upgrade, The Merge, where Ethereum will transition from a proof-of-work mechanism to proof-of-stake, significantly reducing its environmental impact.

In this interview, Vitalik and Dima discussed their journey in the crypto space, Ethereum's regrets and visions for the future of the industry, the anticipated merge, the collapse of the Terra ecosystem, and more. The interview took place in early June before the significant drop in the cryptocurrency market, and Vitalik and Dima also released comments on the crypto market on June 15.

Dima: It was around when Vitalik was three years old. His grandfather was a very intelligent person, and he was teaching Vitalik things like math and letters at the time.

Just as people often use LEGO blocks to build structures and other things, Vitalik really enjoyed using them to construct numbers. It was fascinating to see. I grew up in the Soviet Union where opportunities for toys were very limited. So as Vitalik was growing up, I wanted to get him a lot of cool toys. The first thing I chose was LEGO blocks because LEGO is a very cool building set, and it was interesting to see him put the blocks together in a completely different way.

Vitalik: When I came to Canada, my dad bought me some books to learn programming, and that's when I started coding. From the very beginning, I found programming to be very interesting and captivating.

Dima: Well, I am very curious about new things and new technologies. Computers and their peripherals are one of the richest fields of human knowledge, where human curiosity can be explored. So, I have always been listening to podcasts on this subject. The podcast host is also a very curious person and covers many different topics. One time on his podcast, I heard about Bitcoin, and it sounded meaningful.

I am delighted that Vitalik is curious about many things. For me, sharing curious new things is always interesting, "Oh, I found this interesting thing. Hey Vitalik, take a look. Maybe you'll be interested in it."

Dima: I was impressed when we were at home, and Vitalik shared his whitepaper with me, and it was written very well. I was genuinely impressed. Honestly, I wasn't paying as much attention to cryptocurrencies at the time, but when I read the Ethereum whitepaper, it made sense to me. I think that's one of Vitalik's talents. He can explain very complex things in a straightforward way.

Vitalik: In December 2013, I returned to Toronto, and my father was very interested in my research, so I showed him the Ethereum whitepaper, and he found it fascinating.

Vitalik: No. Initially, I thought it was just a small project that we would complete in three to four months, and then I would go back to university. But in January, I saw people were very interested in the project, and it clearly needed more time, so I realized I had to rethink my plans.

Another thing I never expected was the significant changes in the crypto space in 2017 and 2021. The rapid growth was definitely a pleasant surprise to me.

Vitalik: The crypto industry has experienced significant fluctuations in the past and will continue to do so in the future. The bear market is challenging, but it is usually a period that nurtures significant projects. I am confident that the Ethereum ecosystem will evolve into a more mature and successful blockchain ecosystem, meeting the hopes and dreams of millions of people in the crypto space over the next decade.

Dima: Markets are cyclical, especially the crypto market. I have been following cryptocurrencies for over a decade; it will rise again, and it will fall again.

In terms of its long-term potential, there is no change for me. I believe that cryptocurrencies are now entering an era of mass adoption.

The growth curve is never a straight line; it's not that smooth. Right now, there is a lot of fear in the global market, many uncertainties, the war in Ukraine, the Fed raising interest rates, and so on. But humans are adaptive and resilient, so we will go through market downturns and then build more things. Ethereum will transition to proof of stake, which is very exciting. As for the future of crypto, there is no change for me. The current market has some short-term fears; speculators will be eliminated, yes, there will be a period of pain in the crypto space.

Vitalik: I think overall, the Luna collapse was a significant moment in the world of cryptocurrencies. It reminds people that you can't just build a financial system and pretend that negative situations will never happen. People should not only consider short-term interest rates but also think about long-tail effects and these very specific situations. I believe this insight will ultimately bring stability to the crypto ecosystem.

Furthermore, I think whenever something like this happens in the crypto space, at least from my experience, there is always a leader who steps forward to clarify morally. You can see how different people in the market react, which helps us better understand their characters and who they actually are.

Dima: The collapse of Luna was a very painful event for many people, and they lost a lot of money in the collapse.

I hope we don't limit ourselves to slogans like "let's restrict, let's ban, let's stop everything." There are various challenges on the path of the crypto industry's progress, and we can learn from them, keep moving forward, and not try to stand still to stay safe.

Dima: When Russia announced the invasion of Ukraine, the organized crypto community supporting Ukraine left a deep impression on me, such as The Ukraine DAO. They effectively used cryptocurrencies to raise funds and then consolidated the funds into a specific city where there was already infrastructure for people to convert it into local currency, so that was really cool.

Another aspect of cryptocurrencies that I am very enthusiastic about is that people anywhere on Earth can access the internet to enter their economic system. To me, this is a huge leap forward. People can use blockchain to earn money, participate in companies, DAO organizations, sell their art worldwide, build crypto finance projects, etc. So I am passionate about this aspect. Growing up in the Soviet Union, it was very isolated from the rest of the world.

Lastly, I have to say that there is still much to figure out about new organizational structures, specifically DAO—I think there are many questions about how they are governed, how resources are controlled, decision-making, and other aspects. But for me, this is the future of human organization.

Vitalik: I absolutely agree. What I noticed on my trip to Argentina at the end of last year was that regulatory agencies there have a different attitude toward cryptocurrencies. In the West, sometimes even supporters subconsciously think it's a game for the wealthy.

But in places like Argentina, it is a lifeline for the locals. People there sometimes use cryptocurrencies to save money or to buy and sell things. Projects like Proof Of Humanity are trying to use crypto technology to establish a UBI (Universal Basic Income) there. Some projects are experimenting with DAOs, decentralized arbitration, and all these other technologies there.

So, I think there is a lot of demand for these kinds of things in many corners of the world. NFTs are definitely a good example as well.

Vitalik: Yes, I have no interest in many financial speculations. Sometimes Ethereum is closely associated with new things—like NFTs; I know there are many artists around the world participating in the global economy through NFTs that they couldn't participate in before, but at the same time, there are rich people selling $3 million monkeys to other rich people.

I think Ethereum is an open system. This means that no one can finely control who can use it and who cannot. We should actively support many applications that better reflect our values, but at the same time, if the system is fully decentralized, you have to trust people's choices.

Dima: Humans are very lonely, and we always seek love and recognition from others. Like, "I have a Lamborghini, I have a Bored Ape NFT, I have a lot of money." Inside, we might think, "Oh, I'm a mess, but if I show the world that I have all these cool things, maybe people will love me and build relationships with me."

Vitalik: I was curious. I just wanted to understand the opinions of different groups of people and give my followers a space for an equal conversation where they might be afraid to express dissenting views with me. It's an interesting experiment, and I think some of the answers will definitely be intriguing.

Vitalik: I don't think there has been a significant takeaway; there have been many smaller feedback influences. There are some disagreements with my followers on longevity. Also, there are a few complaints about my fashion style.

Some say I should not get involved in politics, or I should get less involved in politics. Others say, "No, you should not strive so hard for neutrality; when you believe in something, you should be willing to express your views more openly."

But you can't please everyone.

Vitalik: I think the challenge of donating to political parties is that politics is a very complex and chaotic system, and it's easy to have effects that are entirely different from the donation's purpose. I just don't understand how the U.S. political machinery works internally.

My view is that I will focus on other aspects that have been progressing well so far.

Vitalik: There are certainly many positive and interesting discussions, and many people have misunderstood the concept. But that's okay; I think it's a problem that needs to be addressed because what needs to happen will happen.

One interesting dynamic I see and think people misunderstand is that people tend to define debates as choosing between two pre-packaged solutions. People like to compare all the benefits and costs of two solutions. The debate style I prefer is to break down problems one by one.

I think there are always many choices, far more than just two. And in the discussion of soul-bound tokens, people imagine this thing called soul-bound tokens exists, but it's just a collection of ideas in a PDF document.

Sometimes it's more beneficial to do things on-chain, and sometimes it's off-chain. We should figure out when to choose on-chain or off-chain and strive to come up with the best solutions.

Dima: One of the areas of blockchain technology that has not been fully explored is reputation systems. I believe we will see more happening in that area. As described by Vitalik, soul-bound tokens are almost a collection of thoughts and ideas. We are talking about concrete methods too early; it's fascinating, so let's continue to explore it.

Vitalik: I think moving Ethereum to proof of stake has many benefits. From an environmental standpoint, it can make the Ethereum ecosystem consume fewer resources. Additionally, the proof of stake mechanism can enhance the system's security. It makes the cost of attacks more expensive and makes it easier to recover the network from attacks, which people hadn't thought of. Moreover, the proof of stake mechanism is more censorship-resistant, as the computers running verification nodes make it easier for miners to detect and shut down processes. So, the proof of stake mechanism has a range of different advantages.

I think the goal of transitioning Ethereum to proof of stake was a clear plan around late 2014. It had been described as a possibility since early 2014, and if we found a new algorithm that would make us happy. By the end of 2014, we had enough confidence in these messages and were ready to start development.

Dima: The significant reduction in energy consumption is evidently beneficial, as well as network security. Based on all the research articles I've seen, I firmly believe this is a good thing. It is crucial for the network.

I am thrilled to see this come to fruition because I have seen many people put in a tremendous amount of effort for this.

But having the proof of stake mechanism does not mean, "We have arrived at the final perfect technology." At some point, the proof of stake mechanism may be replaced, although we do not know when, but it is inevitable.

Vitalik: Yes, I am genuinely concerned. I think this is one of the more significant issues we are considering when trying to figure out how to change the proof of stake mechanism in the long term. But I also think it's essential not to catastrophize this issue; many people are overly pessimistic about it.

For example, even though Lido holds about one-third of the staked deposits on the Ethereum beacon chain. First, if an attacker holds the other two-thirds of the staked deposits, then we cannot recover the beacon chain or anything else. But in reality, the worst thing an attacker can do is stop the merge for about a day, which is inconvenient but not that terrifying. So, that's one thing.

Another thing is Lido is not a single staking node. I believe they have around 21 nodes representing validators running internally in Lido, and they have achieved decentralization among them. It's like an attacker sending a team of armed people into a building for a kidnapping; the attacker can take all the ETH staked in Lido, but they have to go to 21 different locations, some of which don't even know where they are. So, there is a significant difference between Lido and centralized staking platforms or even centralized mining pools.

I think even with something like this today, it's easy to manage, and it's still a healthy, decentralized proof of stake system. At the same time, I think in the Ethereum community, we have indeed set very high standards for ourselves, and achieving a higher level of decentralization is undoubtedly a goal we are actively striving for.