Vitalik Buterin Cashed Out of ETH During the 2017 Cryptocurrency Bubble

vitalik buterin, ether
Vitalik Buterin cashed out a lot of ether during the crypto craze of 2017, but he's been quite charitable with it. | Source: Steve Jennings/Getty Images

Ethereum mastermind Vitalik Buterin, who holds 350,000 ETH in his main wallet address, allegedly cashed out $40 million worth of ETH between June 2017 and February 2018. The findings came to light by Alex Sunnarborg, a founding partner of the crypto hedge fund Tetra Capital, who dug into Vitalik’s historical account data.

The Breakdown of Vitalik’s ETH Movements

According to Etherscan, Buterin has converted 544,998 ETH to fiat currencies since 2015. This amount equals to almost $49 million, $40 million of which he moved during the period mentioned above.

5/ Vitalik likely cashed out ~ $40,000,000 worth of ETH between June 2017 – February 2018: pic.twitter.com/8RoMKU63ha

— Alex Sunnarborg (@alexsunnarborg) March 19, 2019

While today the balance of Vitalik’s main address is worth $50 million, its net worth reached $500 million when Ethereum exceeded $1,300 in December 2017.

4/ His net worth from this ETH balance alone exceeded $500,000,000 at the...


Ethereum Governance is Currently Underrated says Vitalik Buterin

When it comes to funding development of Ethereum, Buterin stands behind his push to allow wallet developers to charge a 1 gwei fee per transaction made through their software.

In the most recent episode of Into the Ether, Vitalik Buterin appears to discuss all things Ethereum. One of the subjects that came up was the Ethereum governance model. Eric Conner asked Buterin about on-chain governance models, and his thoughts on how Ethereum’s governance stacks up against them.

Current Governance Model Underrated: Vitalik Buterin

Buterin says that the current Ethereum governance model works pretty well, considering the problems it has guided the protocol through.

I actually think that Ethereum governance is under-rated at this point. Because it’s not something that we can attach a cool name to and advertise. And honestly, moderation is a less exciting pitch for people than either on-chain votes, maximum coin holder engagement, or on the other hand immutability. We as a community have never tended to go for extremes. But in reality, on the one hand people complain about governance as a process. But on the other hand, in terms of concrete outcomes that Ethereum governance has achieved, it’s done really well.

It’s implemented the issuance reductions. The issuance reductions seem to be something that most people tend to agree with. […] When there was a crisis back in the year 2016 DOS attacks, it managed to implement, roll, stack out, test and roll out a hard fork all within a time span of 6 days. That’s not something we want to repeat but it’s clearly something we can do if we really wanted to.

When there was a Constantinople bug, it managed to delay the fork within a few hours. It is achieving the things that you might reasonably want a governance of a protocol to achieve, which is to make changes people want and not make changes people want. The one thing that it’s not achieving is dispute resolution or...


Vitalik Buterin “Ethereum will eventually be able to process $1m transactions per second”

Vitalik Buterin

In a recent OmiseGO AMA session, Ethereum founder Vitalik Buterin announced that soon the Ethereum network would be able to process one million transactions per second, with Sharding and Plasma technology playing a vital role.

This advancement in the scalability issues of blockchain based technologies has been something which Buterin has long discussed. Whilst these decentralized networks have the potential to become a part of the everyday world, they are limited by the capacity of transactions per second.

The Ethereum blockchain at the moment can “processes around 15 transactions per second” Buterin stated in the conversation. Whilst this is far more advanced than the capability of Bitcoin, for example, the capability of Ethereum is far smaller than “PayPal, VISA and the major stock exchanges which go up to about 80,000 transactions per second” according to Buterin.

Whilst Buterin knows too well that the current level of transactions processed by the Ethereum blockchain is high for the platform and industry, he also knows that the scalability of Ethereum has some major issues.

The layer one property improvements that Sharding can address in these scalability issues allows the blockchain to process these transactions a lot...


Bitcoin's block size can be increased without a hard fork

Bitcoin’s Block Size Can Be Increased Without Hard Fork, Says Blockstream Co-Founder

Bitcoin (BTC) protocol developer Mark Friedenbach introduced a method for Bitcoin scaling he claims will not require a hard fork at a workshop in Tokyo October 5.

The new concept presented at the Scaling Bitcoin workshop, entitled “Forward Blocks,” suggests a major on-chain capacity boost by means of a Proof-of-Work (PoW) alternation that is done as a soft fork, combined with use of alternative private ledgers.

The proposal describes a method for scaling that claims to be able to increase “settlement transaction volume to 3584x current levels” and improve censorship resistance via sharding.

During the presentation, Friedenbach suggested major improvements for on-chain Bitcoin transactions, or those that appear on the Bitcoin blockchain. The so-called “soft-fork” alternation implies a strengthening of consensus rules where old nodes “still see the chain advance.” The research also represents a definition of “forwards compatible soft-fork,” for which non-upgraded nodes still receive and process all transactions.

In his presentation, Friedenbach emphasized the role of sharding...


Ethereum Founder Vitalik Buterin Just Might Have a Solution for the Crypto Funding Problem

There are free-riders in the cryptocurrency ecosystem.

At least, that's the contention of a new paper, shared with CoinDesk on Monday, written by ethereum founder Vitalik Buterin, Microsoft researcher Glen Weyl and Ph.D. of economics at Harvard, Zoë Hitzig.

And free-riders pose a problem.

Described in the paper, free-riders are people or businesses that profit from the under-provision of public goods. And, on top of that, "the more people [these public goods] benefit the more they will be under-provided." It's an issue that plagues development even outside the cryptocurrency space, but the authors are – at least – initially focused on how the idea creates harmful incentives for the funding of blockchain projects.

Whereas currently, crypto development teams rely largely on donations, the altruistic whims of their creators, and ICOs — the paper details a new financing method to support a "self-organizing ecosystem of public goods."

Titled "Liberal Radicalism: Formal Rules for a Society Neutral among Communities," the method described – a system written in code – seeks to allow groups to allocate funds for the maintenance of public goods and services without becoming vulnerable to the "free-rider" problem.

The mechanism is similar in principle to Quadratic Voting, a form of stake-based voting championed by Weyl in a recent booked, "Radical Markets."

While Quadratic Voting allows participants to vote with crypto tokens according to how much they care about an issue, Liberal Radicalism (LR) expands the same concept to how communities contribute to public goods, such as software development, cryptocurrencies and journalism.

And it works by increasing the funding of projects incrementally depending on the number of participants and the degree to which they care about the issue at hand.

"Individuals make public goods' contributions to projects of value to them. The amount received by the project is (proportional to) the square of the sum of the square roots of contributions received," the paper states.

And while the authors have ambitions for the technology that are far-reaching (including applying the code to municipal projects and campaign financing) cryptocurrency communities, with their open-minded attitudes towards experimentation, are a "particularly appropriate" testing ground for the technology.

Speaking to CoinDesk, co-author of the paper Hitzig said that interest is already building between many different groups. That currently includes about "a half dozen" cryptocurrency communities looking to potentially implement the technology, as well as "other innovators and philanthropists."

As such, Hitzig told CoinDesk:

"Once we circulate the paper we expect that experimentation will begin in earnest shortly thereafter."

The crisis of liberalism

The new paper is part of an ongoing collaboration between Buterin and Weyl since the publication of the latter's "Radical Markets" book.

As detailed by CoinDesk, the duo co-authored a blog post in May, in which the authors discussed their shared interest to "harness markets and technology to radically decentralize power of all sorts and shift our reliance from authority and to...


Blockchain Problems Exist, Or are They Just Limitations

Whenever a new technology emerges, expectations skyrocket as to what it accomplishes and how it changes the world. Personal computers brought digital technology to the masses, yet large corporations continue to depend on mainframes. The internet connected everyone, but as a result, no one keeps their privacy.

In The Beginning

Satoshi Nakamoto invented blockchain in 2008 as the technology underlying Bitcoin. Blockchain provides a decentralized mechanism where transactions occur without any of the parties needing to trust each other. Asymmetric cryptography ensures security and privacy.

Even in the context of the Bitcoin network for which it was created, blockchain problems exist. The rigid monetary policy of Bitcoin limits transaction completion to once every 10 minutes. Modern business demands faster results.

Vitalik Buterin identifies scaling as a primary concern that needs to be addressed in blockchain technology. He made the following comments in September 2017 in an interview with Naval Ravikant at the Disrupt SF 2017 conference:

“Bitcoin is currently processing a bit less than three transactions a second; and if it goes close to four, it’s already at peak capacity. Ethereum over the last few days, it’s been doing five a second. And if it goes above six, then it’s also at peak capacity. On the other hand, Uber on average — 12 rides a second, PayPal — several hundred, Visa — several thousand, major stock exchanges — tens of thousands. And if you want to go up to IoT, then you’re talking hundreds of thousands…”

Show Me The Money

Consequently, the purpose of Bitcoin evolved from Satoshi’s original vision. He titled his white paper “Bitcoin: A Peer-To-Peer Electronic Cash System“, but these days you hear more talk of Bitcoin being a store of value like gold rather than electronic cash. A store of value does not require the speed of electronic cash transactions.

This also introduces blockchain problems in the form of tribal warfare. One tribe argues for the purity of Nakamoto’s original vision, and another tribe argues for innovation. Consequently, various blockchains proliferate. This blockchain does this, and that blockchain does that, and another blockchain does something else again. All this creates a mass of confusion about who knows best and which way to go forward.

Assume the future holds a multitude of various blockchains you use, just like you currently visit a variety of different websites. The decentralized nature of blockchain demands you host some version of a network node on your computer or device. How many nodes will you need? When will the storage requirements burden your system? What other pitfalls await you in this scenario?

Peter Picked a Peck of Wallets

And cryptocurrencies require wallets for storage, but no single wallet stores every cryptocurrency. You need multiple wallets. How many wallets will you need to keep track of? You lose a wallet, and you lose your money. What if your wallet crashes but you lost the seed? What happens if you die but your heirs have no way to access your wallets?

...


Experimental Voting Effort Aims to Break Ethereum Governance Gridlock

When people think of ethereum, they generally think also of the protocol's developer Vitalik Buterin, now - off his creation - a multi-millionaire.

No doubt, Buterin is a leader of sorts for the community, even if decision-making is somewhat decentralized. And above that, ethereum's most active developers have a significant amount of say in the direction of the technology.

Recently, however, the protocol's decision-making has been called into question as a series of controversial proposals have arisen - be it the development of new forms of mining hardware or the recovery of lost funds due to various vulnerabilities.

As the community debates the various pros and cons of such proposals, Buterin has begun working with economics researcher Dr. Glen Weyl to experiment with the idea of enabling a new kind of voting for the ethereum users. In a blog post announcing the collaboration on May 21, Buterin described how ideas from Weyl's recent book, "Radical Markets," could help address these governance challenges and coordinate solutions for contentious issues.

Speaking to CoinDesk, Weyl, who received a Ph.D. in economics at Princeton University and is now a researcher at Microsoft, explained that quadratic voting aims to focus voters on issues they are passionate about and educated on. Rather than votes being distributed equally across participants, users can purchase extra votes to have a greater say in certain issues.

"The idea is it allows people to express how important things are to them, and not just which direction they feel about it," Weyl said.

The collaboration comes at a time when other ethereum researchers have banded together in an effort to come up with ways to better measure community sentiment.

And although Buterin wasn't directly involved in those meetings, in the blog post, he noted his belief that existing proposals for decentralized decision-making either put too much authority into the hands of those who own ether or, in trying to reach a larger pool of stakeholders, are vulnerable to attack by fake accounts and malicious actors trying to sway the vote.

As such, Buterin and Weyl write, the quadratic voting proposal is a more "moderate alternative" to other forms of decentralized governance.

Weyl told CoinDesk:

"[Quadratic voting] allows for decisions to be made for the greatest number of people."

Connecting communities

The duo's post on the matter seems aligned with an announcement made earlier this month by Virgil Griffith from the Ethereum Foundation, the not-for-profit that funds ethereum-related research, that it was seeking applications for projects wanting to test experiments based on Weyl's theories.

Prior to fully fledged announcements, however, Buterin and Weyl's blog post hints at ways the method could occur.

"Citizens can use a (possibly artificial) currency to buy votes at the cost of the square of the votes bought on...