- Vitalik Buterin, the confounder of Etherium presents a profound analysis where he precisely addresses every problem that the cryptocurrency is facing today and may face in the time coming.
- The possible solution is creating a design that maintains bitcoin-like security guarantees.
- The simple technique followed by Etherium is that any block whose stated timestamp is earlier than the client’s local time is not accepted by the client.
Vitalik Buterin, the confounder of Ethereum presents a profound analysis where he precisely addresses every problem that the cryptocurrency is facing today and may face in the time coming. In his recent post, he writes about all the basic problems from 2014 and then throws light on the problems emerging in 2019.
Vitalik first highlights the cryptographic problems which can be solved through mathematical techniques and then comes to economical problems.
1. Blockchain scalability – Vitalik brings into notice that if only a few entities are enjoying the complete control over the nodes, then it is quite possible that they conspire to get the large number of additional bitcoins. Vitalik says that “the main concern with oversized blockchains is trust”.
The possible solution is creating a design that maintains bitcoin-like security guarantees. Vitalik feels that we are today with innumerable technologies that allow clients to check the block availability and full validity “even under 51% attack conditions”.
Some important techniques that he mentions are Random Sampling, Fraud Proofs, Proofs of custody and data availability Proofs and some other smaller measures like Cross-shared communication via receipts. Vitalik feels that there is a very high gap between our benchmark and where we presently stand to address the issue.
2. Timestamping– According to Vitalik creating an incentive-compatible system that is capable of maintaining the current time to high accuracy can answer this issue. Some progress has already been made and still, this area is worked upon.
He then emphasized on Ethereum on how it survived just fine with “a 13 second block time” with no advanced timestamping technology. The simple technique followed by Ethereum is that any block whose stated timestamp is earlier than the client’s local time is not accepted by the client.
3. Arbitrary proof of Computation– Vitalik believes that this issue has managed to get “great theoretical and practical progress” He writes “build a SNARK and we have done it!”
Being used in multiple blockchains today, SNARKs are well understood and very useful if it comes to privacy and scalability.
4. Code Obfuscation– the area has made slow progress but one possible solution, according to Buterin is removing “centralized operator from collision resistance gadgets” where an obfuscated program with some proof of work replaces the operator.
5. Hash-based cryptography–
The area has though made some progress yet problems associated with aggregate signatures need to be addressed.
6. ASIC–Resistant proof of work– Vitalik feels that creating a proof of work algorithm with a calculation “difficult to specialize” is the solution. The problem is though solved to a large extent, thanks to PoW algorithms which offer a good ASIC resistance.
7. Useful proof of work– According to Vitalik the proof of work algorithm requires many properties like difficult Computation, easy verification, less dependence on external data and can be efficiently computed in small “bite-sized” chunks.
Unfortunately, all these properties are possessed by very fewer computation bodies. However Vitalik highlights “Zero-information confirmation age” in which the parts of blockchain legitimacy will have zero information Proofs which makes it hard to register and simple to check. He cites the case of information accessibility roots.
8. Proof of Stake– It needs “great theoretical progress” as he feels that making economical security requires nodes to get a recent checkpoint extra-protocol while syncing for the first time and then again if a couple of months witnesses their offline mode. Other measures include Casper FFG, Tender mint, Hotstuff and CasperCBC.
9. Proof of storage–
many blockchains are already on the way to use proof of storage protocols like Chia and File coin. Vitalik feels that this is more like a theory with less implementation.
” A lot of theoretical progress, though still a lot to go, as well as more real-world evaluation.”
10. Stable value crypto assets and decentralized public goods incentivization.
Problems in 2019–
Buterin speaks about various new problems that emerged this year with some existing ones. He includes cryptographic Obfuscation and the ongoing work on the post-quantum crypto theory. He also includes the anti-collision infrastructure, oracles, and unique human identities problems.
He then adds homomorphic encryption and multiparty computation to the list. Eventually, he highlights the decentralized governance mechanisms, more sources of public goods funding and reputation systems and last but not least is fully formalizing responses to PoS 51% attacks.