Ethereum co-founder Vitalik Buterin took the stage at the Singapore Fintech Festival to discuss the significant advancements made since the implementation of The Merge in September 2022.
The transition from Proof of Work to Proof of Stake has been hailed as a transformative event for the cryptocurrency community. In just over a month since The Merge, the digital currency landscape has experienced substantial changes, particularly in terms of increased scalability and a reduced environmental footprint. Buterin noted that Proof of Work relied heavily on miners employing specialized hardware that incurs substantial costs and consumes energy continuously.
Critics of Proof of Work pointed out its various issues, including security vulnerabilities, centralization concerns, dependence on significant issuance for operation, and environmental impacts due to excessive electricity consumption and hardware turnover.
After a rigorous two-year testing phase, Buterin asserted that Proof of Stake enhances security through a larger number of validators that underpin the Ethereum network. These validators work collectively to secure existing blocks and verify new ones, generating “added stations” that place “confirmation messages” on each block simultaneously. “A block has a very high degree of security, even just seconds after it is published,” he stated.
Moreover, estimates indicate that Ethereum now consumes approximately 99.95% less electricity than before The Merge, dramatically reducing its energy consumption overnight, comparable to the usage of a small country.
Financial exclusion remains a pressing issue, with Buterin highlighting that a vast majority of the global population—about eight billion people—do not engage with blockchain technology. While cryptocurrency adoption is notable in countries like Argentina, where economic instability reigns, the risks associated with trading through centralized intermediaries are often overlooked. “This leads to a loss of the advantages offered by choice, transparency, decentralization, and public ledgers,” he explained.
Buterin emphasized that the Ethereum Layer 1 blockchain aims to be a stable and dependable system with a focus on decentralization and robustness, while leveraging protocols like Rollups for scalability. Rollups are methodologies designed to enhance the speed and cost-effectiveness of blockchain operations.
He elaborated that Layer 2 systems can be characterized as open, permissionless, enhanced, and decentralized, mirroring the expectations of Layer 1. “These protocols interpret data to create scalable systems that deliver real value to users,” he remarked.
In conclusion, Buterin outlined a long-term vision for Ethereum post-Merge, aiming for a stable and dependable Layer 1 akin to today’s Internet protocols. However, he acknowledged that achieving this goal would require significant time and effort. “The switch to Proof of Stake marks a pivotal evolution for Ethereum, demonstrating that substantial improvements addressing real user challenges are achievable, and these issues will continue to be addressed in the coming years,” he stated.
He reiterated the commitment to developing a scalable, secure, and open protocol with tools designed to enhance user privacy and convenience. These advancements will be the focus of the Ethereum ecosystem in the next five to ten years.