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(Kitco News) - Ethereum (ETH) co-founder Vitalik Buterin posted a new roadmap on Friday entitled “The Three Transitions,” which lays out the development he expects to occur on the world’s top smart contract platform over the next few years.
“As Ethereum transitions from a young experimental technology into a mature tech stack that is capable of actually bringing an open, global and permissionless experience to average users, there are three major technical transitions that the stack needs to undergo, roughly simultaneously,” the blog said.
The transitions identified include the layer-two (L2) scaling transition, where everyone moves to rollups, the wallet security transition, where everyone moves to smart contract wallets, and the privacy transition, where developers ensure that “privacy-preserving funds transfers are available,” and that other services being developed, such as social recovery, are also privacy-preserving.
Without the L2 scalability transition, “Ethereum fails because each transaction costs $3.75 ($82.48 if we have another bull run), and every product aiming for the mass market inevitably forgets about the chain and adopts centralized workarounds for everything,” Buterin said.
Ethereum will fail without wallet security “because users are uncomfortable storing their funds (and non-financial assets),” he added, noting that this would push users to hold funds on centralized exchanges, an increasingly dangerous proposition given the current regulatory landscape in the U.S.
Without privacy, “Ethereum fails because having all transactions available publicly for literally anyone to see is far too high a privacy sacrifice for many users, and everyone moves onto centralized solutions that at least somewhat hide your data,” Buterin warned.
While these transitions are “crucial,” Buterin said they pose a significant challenge due to the “intense coordination” required to properly resolve them. “It's not just features of the protocol that need to improve; in some cases, the way that we interact with Ethereum needs to change pretty fundamentally, requiring deep changes from applications and wallets,” he said.
The issue of users needing to have multiple addresses to be able to transact on the various L2 protocols on Ethereum was a pain point of importance to Buterin, who said that while smart wallets simplify the log-in experience, they also “add more complexity by making it much more difficult to have the same address across [layer-one] and the various L2s.”
“Although a lot of work has been done to try to make addresses be hashes of code that can be equivalent across networks, it's difficult to make this work perfectly,” he said.
Buterin provided an in-depth analysis and explanation for each of the three proposals in the blog, covering the positive developments that have been made thus far, elaborating on the challenges that remain, and offering suggestions for how they can be addressed moving forward.
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In closing, Buterin emphasized the point that, “In all of these designs, keeping things both decentralized and understandable to users is paramount.”
“We need to make sure that users have easy access to an up-to-date view of what their current assets are and what messages have been published that are intended for them,” he said. “These views should depend on open tools, not proprietary solutions. It will take hard work to avoid the greater complexity of payment infrastructure from turning into an opaque ‘tower of abstraction’ where developers have a hard time making sense of what's going on and adapting it to new contexts.”
“Despite the challenges, achieving scalability, wallet security, and privacy for regular users is crucial for Ethereum's future,” he concluded. “It is not just about technical feasibility but about actual accessibility for regular users. We need to rise to meet this challenge.”
