Original author: Wu said blockchain
This podcast is the first part of a conversation between Colin Wu, founder of WuSay, and Vitalik Buterin, co-founder of Ethereum. The main topics discussed are: recalling the story of how Ethereum became connected with China, he emphasized Wanxiang’s “life-saving” support and his memory of Bihu; discussing the reasons why the BCH big block did not succeed; the differences between Ethereum and Bitcoin culture; why the concept of Ethereum as a world computer is recognized; why blockchain is the only trustworthy one; and how the Russo-Ukrainian war brought about huge changes to Vitalik himself.
It should be noted that Vitalik was interviewed in Chinese, which is not his native language. Some expressions may not be very accurate. Please understand and tolerate. The audio recording is generated by GPT, so there may be some errors. Please listen to the full podcast
Small Universe: https://www.xiaoyuzhoufm.com/episodes/674dc2b3c3b2a2f3342ba349
YouTube: https://youtu.be/zijS0z6FqV8
Recalling China: Wanxiang may have saved Ethereums life and has a deep memory of Bihu
Colin: The first question is about your experience in China. Can you recall your experience in 2014-2015? At that time, you met many people in the Chinese cryptocurrency circle, such as Wanxiang and Shen Bo, who are still one of the most supportive teams of Ethereum in China. I heard that many people rejected you at that time, including some very famous people now. Can you share your experience at that time?
Vitalik: I first came to China in 2014. I stayed there for three weeks, visiting Beijing, Shanghai, Hangzhou, and Shenzhen. I met many Chinese teams, many exchanges, many miners, and some projects. I remember that I went to Huobi and OKCOIN and saw that these companies were already very large, with more employees than exchanges such as Coinbase and Kraken.
I found that China has a very developed ecosystem with many large companies, while no one was doing these things abroad. I also found that there were already many miners in China at that time. There were not many applications in 2014, but by 2015, I had a lot of contact with Wanxiang, Shen Bo and other teams. I stayed in Shanghai for almost two months, and they were working on some very interesting applications.
There is a company that is doing the digitization of some assets, putting some assets into a coin, and each coin may represent 1/1000 or 1/10000 of the asset. In this way, different people can participate in some very expensive asset investments.
In 2017, there were some big projects in China, and I remember Bihu was one of them. At that time, they had already made a very interesting plan to support creators with digital currency and bring benefits to content creators. What impressed me was that they were not just doing a demo, but making a practical application that everyone can use, and they already had a lot of users.
In 2014, I saw miners, but in 2015, I saw more practical applications. I think there are many very interesting people in this community, and there is relatively little attention paid to this community abroad. Therefore, I think 2015 is a particularly important period for the Ethereum community.
After the Ethereum main chain was launched in 2015, the foundation had almost no funds. We were almost out of cash, and even Bitcoin was almost gone, so we needed to sell Ethereum to support developers. Wanxiang bought 410,000 Ethereum at a price of $1.2, and spent a total of $500,000 to support our foundation. This was very important to the foundation and may have saved the foundations life. For Wanxiang, it was also a very good investment.
Colin: Yes, Bihu was indeed an important supporter of Ethereum, and its founder was very influential in China at the time. Unfortunately, Bihu was later closed. But in the past two years, decentralized social media has become more popular.
Vitalik: There are some regulatory issues in China, but I found similar problems abroad. Many interesting projects started in 2015 and 2016, but by 2020, their development is still limited. A large part of the reason is the issue of transaction fees. If these projects want to really develop and become mainstream applications, they must have the required TPS. A successful application may require 100 ~ 1,000 TPS, but our chain can only support 4 ~ 5 TPS at that time.
Many applications are competing to put their transactions on the chain, so transaction fees become very expensive. In this case, it seems that only DeFi can survive.
You can imagine if you were a regular social media user and found a new social media app, but every time you posted or did anything, you had to pay $1, $5, sometimes even $15, then it was totally unfeasible. But for financial applications, this is not a problem. So I think its a pity that many decentralized social and other projects did not survive the DeFi Summer period.
But now we have a lot of L2 solutions, and their transaction fees are much lower. Now many people are paying more attention to more topics about L2. I am very much looking forward to the active development of decentralized social and many other projects in the future.
Colin: Maybe you can talk to the founder of Bihu and see if you can get him to restart Bihu. Now is a good time.
BUTA: Yeah, sure.
Recalling BCH: The ideal of large blocks is more correct, but the execution ability is not enough
Colin: The next question I want to discuss with you is that I remember that you were more in favor of large blocks in the issue of Bitcoins size. The birth of BCH in 2017 brought this dispute to a peak. You recently wrote an article in which you mentioned that you have a lot of new thoughts on this issue, and that the reason for the failure of large blocks may be insufficient technical and execution capabilities, as well as the emergence of scammers like Craig Wright. Can you recall your interactions with Wu Jihan, Roger and others at that time? What new views do you have on this matter now?
Vitalik: This is an interesting question. Unfortunately, my Chinese was not good enough at that time, so I did not have the opportunity to get to know Wu Jihan and other miners who supported large blocks. I did not have the opportunity to really understand their personalities, why they supported large blocks, and what their vision for Bitcoin was.
Roger Ver is relatively simple. He is not the kind of scholar-type person who reads a lot of books or writes articles. He is a more practical person. He knows that the value of Bitcoin lies in its existence as a new currency. If a currency is to be used for payment, it needs enough block space to support a large number of transactions. Therefore, his views are relatively simple and direct.
Some people who are more academic often think about longer-term issues and explore things that others are unwilling to think about. These people with strong thinking ability sometimes bring very important ideas to the world. Without them, we may make bigger mistakes.
But sometimes they get stuck in their own world and lack sufficient contact with the outside world. This is like some people criticizing our core developers of Ethereum, asking how many smart contracts you have participated in and how many DApps you have written. Similar situations occur in many fields, especially in blockchain and politics.
If these thinking people dont have enough contact with the real world, their views will often be very internally consistent, but they will ignore some things that are crucial to people.
In the debate about small blocks and large blocks from 2015 to 2016, the Chinese community sometimes mentioned these issues. Supporters of large blocks often emphasized that they care more about users and pay more attention to the real world, while supporters of small blocks pay more attention to technical details and are more developers and researchers. So this caused a conflict.
I mentioned in the article I wrote later that my conclusion now is that the ideal of big blocks is more correct, but the execution ability of big block supporters is indeed insufficient. Many big block supporters made many mistakes when writing code, which is why the community finally began to support small blocks.
But later we found that the supporters of small blocks also made a big mistake. For example, they said at the time that Bitcoin should be L1, as digital gold, and L2 could be the payment layer. The L2 they mentioned is the Lightning Network. The Lightning Network is a very interesting concept, and I also appreciate this idea.
However, the actual implementation of the Lightning Network has many problems, is relatively unstable, and its implementation is relatively centralized. Roger Ver also describes these problems in his book.
So from an academic perspective, the idea of big blocks is very good, but there are many problems in the real world.
Small block proponents don’t really focus on the importance of payments and applications. They think that others are focusing on payment issues, and their task is to provide a technical solution to meet these needs. But they don’t put enough effort into thinking about whether this solution can actually be realized.
So the development of the Lightning Network is relatively slow now. Although there have been some progress recently, most people in the Bitcoin community are still paying attention to the price of Bitcoin and are thinking more about when Bitcoin can reach the goal of 1 million US dollars. Their biggest hero is Michael Saylor because his company has purchased a large amount of Bitcoin.
Therefore, I am not optimistic about the technological development of the Bitcoin community right now.
The price logic of Bitcoin and other currencies is much more complicated. In fact, no one knows where the price of digital currency comes from. This may be the biggest problem in our industry and an important issue in the modern market.
The difference between Bitcoin and Ethereum culture: wealthy people and developers?
Colin: You recently posted something very interesting. I forwarded it the day before yesterday. Many people found it very interesting. You used GPT to generate Bitcoin and Ethereum. The Bitcoin owner is a local tycoon, very rich, while the Ethereum owner is a developer. It seems that the most important thing for Bitcoin holders is to make their coins more and more expensive and become richer and richer.
But many supporters of Ethereum don’t seem to care so much about money. They have made a lot of donations and may be more concerned about building a better public good. Is this also a cultural difference between Bitcoin and Ethereum?
Vitalik: This is indeed an interesting topic. In fact, from 2011 to 2013, the Bitcoin community was very diverse. I remember when I entered the Bitcoin community in 2011, I found that there was a section called Politics and Society in the Bitcoin forum, and I particularly liked this section. There were some liberals and socialists there, and they were debating with each other, discussing some very interesting issues such as how to deal with medical problems and whether the government should intervene in the medical industry. Everyone had very different views on these issues.
People debated these topics very civilly. If you know the debates on Twitter now, you will find that such a civilized debate is almost impossible. But in that forum, people can express their opinions in a civilized manner, even though my opinion may be completely different from yours. At that time, if you wanted to reply to a post, you might have to write an article of about 300 words. You need to write your own opinions carefully, rather than just commenting. This culture is very special.
In fact, the early community culture of Bitcoin also paid a lot of attention to public goods, future technology and ideas of mankind. However, in 2014, the Bitcoin community began to split.
Why did it split? The reason is obvious. Before 2014, Bitcoin had almost no competitors. If you were interested in digital currency, your only choice was Bitcoin. But in 2014, first the debate of large blocks vs. small blocks emerged, and secondly, Ethereum emerged as the first currency that could compete with Bitcoin. To this day, Ethereum is still the only currency that can truly compete with Bitcoin.
So some people who liked me and the early Ethereum thinking more chose Ethereum. If you like the Bitcoin community more, you will naturally stay in the Bitcoin community.
In 2017, everyone needs to make a choice: support Bitcoin with small blocks or support Bitcoin with large blocks. But in fact, as early as 2015, everyone has made their own choice. So now, we can roughly see the existence of at least two, or even three blockchain cultures. Now, there are many other projects, such as BNB, Solana, TRON, etc., each of which has its own unique characteristics and different cultures from Bitcoin and Ethereum. The current situation is a bit like the cultural differences between different countries, just like before the Internet, there was a huge cultural gap between different countries.
I prefer the term and concept of world computer
Colin: If, as you said, the diversity of Bitcoin has become less, people may now only think of it as digital gold. So if you were asked to describe Ethereum, what would you tell people you hope Ethereum will be? Is it a cyber country, or what people often call a decentralized world computer? What kind of existence do you hope it will be?
Vitalik: I actually like the term and concept of world computer because to me, it represents a lot of things. I hope that Ethereum is not only a chain, but also an ecosystem that can support a variety of applications.
This reminds me of an interesting point in the early Ethereum culture: When I started working on Ethereum, I thought Ethereum was just Bitcoin plus smart contracts. Because before that, I was a member of the Bitcoin community and participated in some other projects to try to add features to the blockchain. I had an idea, why add features? Why cant we add a programming language that allows people to use it to write various functions? So when I started working on Ethereum, my original intention was Bitcoin plus smart contracts. But our core developer Gavin Wood, before joining Ethereum, he had no interest in Bitcoin at all. He thought Bitcoin was very boring. His understanding of Ethereum was actually more direct. What he wanted was a combination of open source technology and shared storage. I can explain this concept in more detail.
We can look back at the history of software. In the beginning, all our applications were open source and free. Everyone could download them and run them on their own computer. They could view the source code at any time and modify it to do different things.
But after entering the 1950s, some big companies began to participate in this field. For example, Microsoft began to launch the Windows operating system and no longer disclosed the source code, claiming that its code was copyrighted and could not be copied at will. This phenomenon made many people dissatisfied, because all software before computers could be fully owned and modified by users, just like you own a car, you can modify any part and repair any damaged part. When the computer field became a model controlled by big companies, many people could no longer freely control the applications and software they purchased. Although the software was yours, it did not completely belong to you. This prompted the rise of a free software movement.
By the end of the 1990s, open source software became an important topic. Today, many software are open source. For example, the operating system I am using to talk to you is a completely open source example. Now, open source software plays an important role in our lives.
However, before the 2000s, most applications were stand-alone applications, where users used the software individually, like Microsoft Word or stand-alone games. After 2000, many multiplayer collaborative applications emerged, such as Google Docs. The biggest difference between Google Docs and Microsoft Word is that Google Docs allows multiple people to edit files at the same time. Games have also changed a lot, such as World of Warcraft, which allows players to interact in a virtual world.
This change brings a problem: if many people use an application together, then the application needs shared storage. For example, in a document that multiple people collaborate on, where is the file stored? In a social network, where is the users information stored? These problems can usually only be solved through centralized servers. The biggest problem with centralized servers is that users cannot fully control their digital lives.
For example, the file format of Microsoft Word is proprietary, and it is difficult to edit these files with other software. If all important information and operations are on a centralized server, it will lead to an even worse situation. A centralized company can change the rules, raise prices, or even shut down services at any time, just like some startups rely on Facebook or Twitters API. If any of these applications are successful, Facebook or Twitter can easily compete by modifying the API, so that they can quickly replace other companies businesses.
Gavin Wood is thinking about these issues. He believes that creating a decentralized shared storage system may solve these problems and become the second version of free open source software. He thinks this is an interesting topic, and I think this topic is very meaningful, because blockchain is not only a financial tool, it can also play a huge role in the software field. Now, applications such as decentralized social networking and decentralized document editing have begun to appear, such as DDocs (a decentralized Google Docs).
This idea is attractive, but some people will say, is Ethereum a digital country? I think this concept is a bit exaggerated, because the country provides much more services than Ethereum can. Ethereum is just a collection of digital programs, while normal countries solve a wider range of problems, including various public goods such as security, education, and medical care. If Ethereum starts to intervene in all these areas, it will no longer be neutral, which may reduce peoples willingness to participate in the Ethereum ecosystem.
The only thing you can trust is blockchain
Colin: I want to talk to you about another political topic. Last year, the United States approved the Ethereum ETF, which was actually a surprise to everyone because Trump had not yet come to power. What do you think about this issue? From your perspective, do you deliberately keep some distance from countries like China and the United States? Because you have also expressed that you think blockchain and cryptocurrency are best played in places where centralized forces are not so strong. Did the Russian-Ukrainian war have a big impact on many of your ideas? It seems that you seem to be very actively involved in it after this incident.
Vitalik: First of all, I think blockchain is something that belongs to the whole world. One of the most important advantages of blockchain is that it can solve the trust problem. If you look at other industries, such as AI, there may be only a few centers - Silicon Valley, London, or Beijing, Hangzhou, and Shenzhen in China. But blockchain is very decentralized. For example, in the United States, some applications are concentrated in New York and Silicon Valley; there is also a very important center in Berlin; in Asia, there are also many applications in places like Singapore and China. Therefore, the biggest advantage of blockchain is that it can play a role in some places where trust issues are particularly serious.
Argentina is an interesting example. The biggest problem facing Argentina is inflation, with an average annual inflation rate of 30%. They have become accustomed to living in such an economic environment for a long time and have completely lost confidence in legal tender. Recently, some people in Argentina deposited US dollars in local banks, and the government suddenly announced that all US dollars in banks would be forcibly converted into legal tender, and the value of these legal tenders changed by 2 to 3 times on the same day.
This situation has caused people to completely lose trust in banks. Argentina also has difficulty integrating with the international financial system. Although the financial systems in the United States, China and Europe are very developed, Argentina, like many African countries, has relatively little access to the global financial system. In these marginal areas, blockchain may play the greatest role because it solves the trust problem. This is a trust problem, especially a trust problem between countries.
Ten or fifteen years ago, most people in the world used American services. No one paid much attention to these issues at the time because the United States focused on freedom of speech and openness, and the behavior on the platform was relatively tolerant, and accounts would not be easily shut down.
But the situation has changed in the past decade, especially the Snowden incident in 2013 and the issue of closing accounts for political reasons in 2020. Today, no decentralized platform is trusted globally, and perhaps the only one that can do this is blockchain. Because blockchain is the basis of trust, it ensures that the platform will not arbitrarily close accounts, steal user funds or leak personal information.
Therefore, in this changing world, I think blockchain and related technologies have great advantages. I have spent a lot of time in marginal areas in recent years, such as Argentina, Thailand, Montenegro and Turkey, because I think blockchain should be an international thing. We should not let it become an increasingly centralized technology. So I recently had an idea that if a blockchain is theoretically decentralized and free, but if most teams are concentrated in the same place and have the same values, then when the next crisis occurs, they may make mistakes and eventually lose global trust. So, I will be more concerned about this.
The Russian-Ukrainian war has completely changed me. I might be sentenced if I return to Russia.
Vitalik: The outbreak of the Russian-Ukrainian war really surprised me. Just a month after it happened, I saw information that Russian troops were near Ukraine and began to mobilize troops and tanks, etc. I didnt expect it to be so big. I thought Russia was just concerned about some issues, such as the expansion of NATO. They just wanted to show that they are strong and worthy of respect, and dont want others to do things they dont like, but I didnt expect them to completely invade a country, or if they invaded, it would happen slowly like in 2014.
But in early February, when I talked to some Russians, they also felt that nothing big would happen. Until February 24, I remember I was in Denver at the time, and I watched the news at night, and at that time everyone basically knew that a big conflict would happen. When this thing actually happened, my thoughts changed a lot, and I didn’t know how to express it at all.
I can start by telling you what happened. Around 6pm on February 23, I was done with all my activities for the day and was sitting in my hotel room talking to my father. We knew Russia might make some big moves. At around 7pm, my father sent me a message saying that Russian rockets had begun to hit buildings in cities in eastern Ukraine. I knew then that something really big was starting to happen.
I didnt sleep for three or four hours, normally I would have gone back to the hotel to rest, but I was up almost until midnight that night, watching the news. Then I sent my first tweet, saying I was completely against this, updating the news almost every minute, and was in complete shock.
When I woke up the next morning, I was shocked again. Why? Because Ukraines official Twitter account posted an Ethereum address. My first reaction was, how could a government directly post a transaction address on Twitter? I suspected that Russian hackers had hacked into Ukraines Twitter account and posted an address controlled by Russia.
So I warned everyone on Twitter that this might be a hackers behavior and not to trade casually. At the same time, I started contacting some people I knew, especially those who had connections in big cities, to confirm the authenticity of the address.
Later, through a person close to the US government and a Ukrainian team, I confirmed that the address was real and that people could donate. I posted a second tweet to clarify my previous mistake.
An hour later, my family messaged me and said, You know, now that youve made this decision, you may not be able to return to Russia in the future.
It was then that I realized that I had not only witnessed this war, but that I had become deeply involved in it. Now, returning to the country of my birth would mean facing great risks, even a possible prison sentence of 10 to 15 years.
At that time I felt that I was no longer a child.
I was facing a major historical event, and I had now clearly chosen my side, not only in terms of the war, but also in terms of who I was for and who I was against. This brought about a huge change in my personal life. I began to wonder how to think.
At first, I donated some money to Ukraine, and then a month later, I saw the news that Russia had occupied a city and innocent Ukrainians were killed, maybe 500 to 1,000 people. That situation made me very angry.
So I decided to make another donation, this time $5 million, which solidified my stance and left me feeling much the same as I had on February 24th.
Wars are common in history, but in our personal lives, such a large-scale war is completely abnormal. This is the first time we have faced such a serious conflict. So in this situation, although I was a little confused at first and didnt know what to do, I knew that in such a moment, people who need help should be helped. If good people do nothing, bad people will succeed. So I tried my best to help Ukraine and do everything I could.
