In the upcoming decade, Vitalik Buterin envisions a groundbreaking evolution for Ethereum that builds on past achievements and introduces new technologies and applications. Here are the key elements he foresees for Ethereum’s future.
1. Scalability and Transaction Costs – Ethereum Is Becoming Faster and More Economical
Over the next ten years, Ethereum will greatly enhance its capacity to handle large volumes of transactions swiftly and affordably. Previously, particularly around 2019, transaction fees posed significant challenges, often varying from $1 to $5 per transaction. These fees escalated with increased network activity, making it unfeasible for many users, particularly for smaller transactions. However, today, due to the implementation of layer-2 solutions, transactions can frequently be executed for under a cent.
A pivotal technological advancement Ethereum is introducing to address its scalability challenges is EIP-4844. This proposal expands the storage capacity on the blockchain, which supports layer-2 solutions. This enhancement allows Ethereum to manage many more transactions without a substantial rise in costs. In the coming years, these capabilities are expected to be further augmented, particularly with the advent of “Proto-Danksharding,” which will further boost data throughput, preparing Ethereum for widespread global adoption.
2. Striking a Balance Between Usability and Decentralization
The primary challenge for Ethereum remains to create a user-friendly system that also upholds its core principles of decentralization. In the past, particularly during its early stages around 2015, most applications were highly technical and mainly accessible to seasoned blockchain users. However, in the next decade, Ethereum will strive to address this issue.
The aim is to develop applications that provide the convenience and usability of traditional Web 2 platforms while preserving decentralization and user control over their data and assets. One significant trap Ethereum must avoid is creating applications that, although user-friendly, compromise the fundamental values of decentralization and independence. It is crucial to achieve a compromise that allows both technical and non-technical users to enjoy the platform’s benefits.
3. Prediction Markets and AI Integration – The Future of Information Processing
Prediction markets represent a burgeoning sector within the Ethereum ecosystem. These markets provide an innovative method to gather information about future events. By 2024, these markets have already gained traction, and over the next decade, they will continue to expand. Ethereum-based platforms like Augur that facilitate prediction markets will become even more user-friendly thanks to reduced transaction fees and enhanced user interfaces.
Buterin also foresees the potential for integrating artificial intelligence (AI) into these markets. This could lead to the formation of micromarkets where AI systems make predictions based on data that would be inefficient for humans to analyze. For instance, AI could generate small, specialized predictions that involve only minor financial stakes but hold significant relevance for particular inquiries. These markets could enable more profound and intricate analyses of future events without the need for human involvement.
4. Global Financial Integration via Ethereum Wallets
In the next decade, Ethereum will further solidify its role as a global financial platform. Currently, there are wallets designed to supplant traditional payment services like Venmo, but with a decentralized and globally accessible approach. In the coming years, these wallets will become even more intuitive and secure.
The vision is for individuals worldwide to utilize Ethereum-based wallets for sending and receiving payments without depending on conventional banks or financial institutions. This could be especially beneficial for regions where the banking infrastructure is inadequate or nonexistent. A wallet like Doo, which merges traditional finance app functionalities with the accessibility and decentralized character of Ethereum, could play a pivotal role in this evolution.
5. Zero-knowledge Proofs and Privacy – Next-Level Security
Privacy and security will remain critical concerns for Ethereum over the coming decade. Zero-knowledge proofs (ZKPs) stand out as one of the most promising technologies in this domain. These allow for the verification of identities or information without disclosing sensitive details. For example, a user could demonstrate that they are authorized to vote without revealing their personal data.
Applications that utilize ZKPs for secure and private voting already exist today. These technologies will become increasingly sophisticated and could be applied across numerous facets of digital life, from identity verification to safe transactions. By using ZKPs, Ethereum-based applications could enhance their security while safeguarding user privacy.
6. Micro-prediction Markets and AI – The Future of Niche Markets
Another area poised for growth in the upcoming years is micro prediction markets. These markets could leverage artificial intelligence (AI) to become extremely specialized, making predictions on very specific subjects. Such markets might hold little interest for human participants due to their minimal potential stakes or winnings. However, they are perfect for AI systems capable of processing vast quantities of data.
The concept is for AI to address low-volume questions such as “What will the weather be like in a small town in five days?” or “How will the price of a very niche product evolve?” These markets would facilitate more accurate and targeted predictions that would otherwise go overlooked in conventional prediction markets.
7. Standardization and Interoperability – A Cohesive Experience in the Ethereum Ecosystem
A significant advancement that Ethereum will pursue over the next decade is the standardization of applications and processes within the ecosystem. Currently, numerous layer 2 solutions and Ethereum-based blockchains exist, yet interoperability between these networks often proves intricate and prone to errors.
The objective is to streamline the use of Ethereum as much as possible. For instance, if a user wants to transfer USDC from one platform to another, this process should be achievable with a single click, without navigating through elaborate technical procedures. This will enhance the accessibility and appeal of Ethereum applications for the mass market.
8. Security Innovations – Enhanced Protection for Users
Security continues to be a pivotal concern for Ethereum, especially regarding digital asset management. One innovation that will be further developed in the coming years is the multi-signature security concept, wherein multiple keys or approvals may be needed to authorize a transaction. This adds an extra layer of protection against potential key loss or theft.
Another intriguing concept is employing zero-knowledge proofs for user authentication. For instance, a user could utilize their email account to authorize a transaction without encountering the usual security risks associated with hacking that account. Such approaches will enable non-technical users to interact with Ethereum securely.
9. Innovative Interaction Methods – Wearables and Brain-Computer Interfaces
Over the next ten years, the manner in which individuals engage with Ethereum-based applications will experience a dramatic shift. Experiments with novel interfaces such as wearables or voice control are already in progress, and brain-computer interfaces (BCIs) may play a significant role in the future. These technologies allow users to interact directly with computers or blockchains without relying on traditional input methods.
The challenge will be to ensure that these new interfaces remain secure and decentralized. It is vital that Ethereum adheres to its core values in these emerging applications and guarantees that users maintain control over their data and assets.
10. Combatting Misinformation and Information Security
In an era where misinformation and fraud are escalating issues, Ethereum and other blockchain technologies could contribute significantly to addressing these challenges. One potential approach would be to leverage epistemic technologies that authenticate information and make it transparent on the blockchain. Prediction markets, community-driven reviews, and AI could enhance the reliability of information online.
Ethereum could serve a central role in establishing a secure and trustworthy digital environment over the next decade, empowering users to retain control not just over their assets but also over the information they encounter.
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Author
Ed Prinz is the Chairman of DLT Austria, the leading non-profit organization in Austria dedicated to blockchain technology. DLT Austria is actively engaged in educating and promoting the benefits and application possibilities of distributed ledger technology. This is achieved through educational events, meetups, workshops, and open discussions, all conducted collaboratively with prominent industry players.
Disclaimer
This represents my personal viewpoint and should not be construed as financial advice. As such, I cannot assure the accuracy of the information contained in this article. If you are uncertain, I recommend consulting a qualified advisor you trust. No guarantees regarding profits are made in this article. All statements in this and other articles reflect my personal opinion.