Vitalik Buterin comes to the Bankless to discuss a number of topics surrounding Proof of Stake!

You have early access to this episode and a copy of the transcript as a full Bankless Member.

📺 NEW EPISODE ON PREMIUM FEED

Watch episode 46 | Listen in Podcast App

Tools from our sponsors to go bankless:

⭐️ AAVE - BORROW OR LEND YOUR ASSETShttps://bankless.cc/aave

🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMPhttps://bankless.cc/go-gemini

💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDShttps://bankless.cc/monolith

📈 KWENTA | DEVIRATIVES TRADING WITH INFINITE LIQUIDITYhttps://bankless.cc/kwenta

📺 Vitalik Buterin on Why Proof of Stake?

January 4th, 2021

Vitalik Buterin comes to the Bankless to discuss a number of topics surrounding Proof of Stake!

We begin discussing the Beacon Chain launch, and the Ethereum's road so far up to this point. What were the unexpected obstacles along the way? How does it finally feel to be at this point?

We also discuss the theory and thought-process behind Proof of Stake! Vitalik recently wrote a blog piece 'Why Proof of Stake', and we walk through this piece with him! It does a comprehensive analysis as to the theory behind why Proof of Stake is so strong and lays down economic arguments behind Ethereum’s new consensus mechanism.

Why Proof of Stake?https://vitalik.ca/general/2020/11/06/pos2020.html

Lastly, we discuss one of Vitalik's blog pieces 'Concave and Convex Dispositions’, and how these different personality types characterize Bitcoin and Ethereum, as well as the design of social groups and human governance organizations.

Convex and Concave Dispositions https://vitalik.ca/general/2020/11/08/concave.html

Other pieces mentioned:

Trust Modelshttps://vitalik.ca/general/2020/08/20/trust.html

TRANSCRIPT

RSA

Bankless Nation, we are pleased to bring you Vitalik Buterin again in front of the nation. We are talking about a few things that are top of mind. Vitalik great to have you. How are you doing?

Vitalik Buterin

Thank you very much, David and Ryan, it's great. It's great to be on Bankless once again.

RSA

It is fun. And I feel like this is a really good moment to be on Bankless. The first thing we want to talk about with you actually is this pretty momentous, maybe monumental in the history of Ethereum, achievement, which is we hit the number 524,288 now deposited in the staking contract. How does that feel?

Vitalik Buterin

It definitely feels great. I think like for a long time, the first few weeks, we were definitely a bit worried because I know the deposits were coming in slowly at the beginning. And it seemed like oh, no, with only four days left when we had 20%. And you know, what the heck is going on here? And I mean, we even saw right that there were a lot of people who were starting to get worried like on our GitHub thread. And I saw Eric opens up that GitHub issue basically suggesting, you know, hey, just in case, there's never enough deposits. So let's set a maximum date. And there is a bunch of arguments around that. But, you know, no the Ethereum community came in and the Ethereum community delivered and just within the last 24 hours we ended up having more deposits than we had in the entire period. Before that, like, it definitely feels a little bit surprising, though in retrospect, it should not be too surprising. I guess. The one kind of event that happened in the past of this reminds me of as if you were here during the original ether sale back in 2014. If you remember that whole event, it was it was this kind of six week long sale, but then the first two weeks were the most important period because that was the period during which you could get the most favorable price for your ETH. And there was like some amount of deposits on the first day or less on the second day. And then it seemed like it was going really slowly and as a whole was petering out at a couple of billion dollars. And then just suddenly in the last couple of days everyone just like whooshed in and then pushed the whole thing up to close to $80 million. So the curve feels kind of very similar to that. And I guess the subject said you should expect that because well, why would someone participate earlier if they can just wait until the end. But, you know, just see that come first slowly and then done all at once is definitely amazing. And it's definitely a great testament to the Ethereum community, its level of confidence in that first time, the ETH sale itself, and then the second time with the proof of stake and sharding as the stuff that we've spent so many years working on.

David Hoffman

So Vitalik what does this tell you about the Ethereum community like as a result of this? And because we hit the 524,000 ETH. But then we just blew past it by 200,000 more ETH? Like, what is this? If this is a litmus test for the community, what is it telling you, what are your big takeaways about the Ethereum community as a result of this event?

Vitalik Buterin

I think first of all, there's a definitely wide community buy in and confidence in general. And that's something that I think I definitely believes the whole time. But it's definitely good to have just such a clear sign of it. You know, $300 million worth of people just locking up their ETH, potentially never to see it again, unless ether delivers or we find some kind of further thing to do to make those coins in the in the deposits actually valuable again. So in some sense, that's the ultimate bet on progress. And I think I got a bet on progress is to some extent what Ethereum is all about.

RSA

I feel like it happened in the perfect way, like in a very climactic way that really fired the Ethereum community up when it actually happened in the way that it did. Like it's almost fitting, I would say that we weren't sure we were going to cross the threshold into the last, you know, 48 to, you know, 24 hours. But I'm curious about this number itself. Why was the number selected? What kind of drove that number to begin with, was it fairly arbitrary that we have to have some amount of stake? And so, you know, why not this particular number? Or was there some sort of rhyme or reason behind it?

Vitalik Buterin

I guess, like 524,000 was the end of the power of two, that seems like a relatively minimum acceptable threshold for an amount of deposits that we could have to ensure that the chain would actually be safe with that amount. So like to give one example, what's the smallest power of two that the Ethereum Foundation could not individually 51% attack. So the Ethereum Foundation has like slightly above, slightly above that, but no, it would have to put everything in and even then it would only be only be around 50%. So if we had less than just the number of actors that would have enough money to be able to take over the thing individually, and we'll just get higher and higher. And so it actually would be, the chain would just not be that secure with a lower amounts. But on the other hand, like at this level, it's getting to the point where like, there's really very few individual actors that actually have the ability to kind of put in the funds to take over the chain. And aside from the the Foundation, there's also obviously the major exchanges and maybe like ConsenSys, I don't know how much they have, and maybe a couple of whales. If you go higher and we hope to go higher then it is going to get out of reach of even those that are the largest holders. But realistically we don't have to get up to those much higher levels immediately, like this is still the Phase 0 beacon chain, there's nothing completely relying on it. And so we start at a medium level of safety and then go up to the higher level over time as people would naturally become more confident in the system.

RSA

So this process is getting to that number and exceeding the threshold of ETH that sort of initiates the the rocket launch sequence, right. But the chain is not yet launched, that will happen December 1st 12 o'clock UTC time. So what kind of happens next, what's the next milestone in the beacon chain launch, and in staking now that we filled up the deposit contract to its minimum threshold.

Vitalik Buterin

So the next milestone is obviously the thing that's happening in five and a half days after I'm saying this, on December 1st. Then the launch itself, we've done lots of testnets, but this is still larger than any testnet it's a different set of stakeholders than any testnet so just making sure that all goes smoothly. Then after that, we would hope the proof of stake chain just runs smoothly for some amount of time. And at some point, we want to adjust and start getting on to the task of kind of upgrading it and bringing on all the full functionality that we want