So the topic I wanted to talk about today is somewhat of a big picture topic. Basically, I think we've been talking about blockchains, we have been talking about crypto and cryptocurrency for more than fifteen years now. I mean, I know that the Shanghai Wanxiang blockchain events have been happening for more than ten years now. Bitcoin was created in 2009, and on the surface, the tools that we're building, the technologies that we're building, seem like they are still similar. But actually, over the last fifteen years, there are a huge number of differences, and I think these differences matter. And one of the reasons why they matter is because as a user, it means that the kind of properties that you get and the kind of costs that you have to pay are actually all very different than what we might have thought ten or fifteen years ago. And even how we think about the goals that we're trying to accomplish is very significantly changing.
So fifteen years ago, blockchains were the primary tool that we had, right? And Bitcoin combined blockchains, signatures, and proof of work. Ethereum also added smart contracts, also switched to proof of stake in 2022, and these were the tools that we were working with. So the properties that you got from using a blockchain are: first of all, blockchains are open, they're free for anyone to participate, they're global, they're reliable, they're secure, they are neutral, there is no centralized actor that can interfere in them, that can interfere with your application, that can stop it, that can cause it to give a wrong answer. But also, wallets are not private; they're public. So Zooko, who created Zcash, he likes to use this phrase that public wallets are like Twitter for your bank account. Satoshi's white paper in 2009 had, I think, had here very basic answers to these questions, like every individual's name is not directly attached to their transaction, is still a fairly strong form of privacy. And that was maybe an OK answer then, but now we have extremely powerful data analysis, extremely powerful AI, that answer is obviously not sufficient anymore. And at the same time, people want to do more things with blockchains, people want to be able to do things that are more performant, and people also are not just interested in payments, and even the payments that we want have stronger and more powerful properties in them. So there's a lot, we really want to go further, and I think in many ways we need to go further.
So probably the biggest change in technology that we've had over the last ten years is the rise of zero knowledge proofs, right? So that includes SNARKs, and then the quantum-safe version of a SNARK is called a STARK. And what these proof objects do is they allow you to verify a computation. So one person runs the computation, and then they generate a proof, and everyone else verifies that computation in such a way that 1) the process of verification is much more efficient, and at the same time, it doesn't even need to reveal all of the information that went into the computation. So a core piece of the technology behind blockchains has to do with this question of verification, right? That we want a system that everyone participates in, and that everyone has the assurance that what is happening is following the rules. And so the original technique is, well, everyone has to re-execute everything directly, and so you sacrifice scalability, you sacrifice privacy. SNARKs and STARKs change both of these things. This is a topic that I've been talking about for more than ten years now, but this is something that every single year is coming closer to being a reality. And I think the big change this year is that all of the plans to move Ethereum over onto using all of this technology, they are no longer part of the far-future roadmap. They're now EIPs, and EIP-8288, which we're hoping will get into the next fork, maybe happening two years from now, I mean, maybe possibly with the AI, and even sooner. And that is one of those examples, right? There's the roadmap at roadmap.ethereum.org, and everything inside of it after the next two forks is using STARKs everywhere. So this is a big change.
The other big change that was, now there are more other more powerful technologies that I think are also on the horizon, right? So fully homomorphic encryption, FHE, many people are using it. Also obfuscation, or iO, this is something that for a long time people have thought is like very far future, but actually it is looking like some versions of it might be more and more viable and on a much faster timeframe than many people thought. So we have more powerful technologies, right? And these powerful technologies give us a lot of things, right? So one of them, for example, is that you can have blockchains with parallelization, where the parallelization starts even before transactions get included into the block. So FOCIL, this is an EIP going into Pectra, it's the first instance of multi-participant block building happening in Ethereum. So blocks are not just created by one participant, there are sixteen of these inclusion-list creators, and then one final builder at the end. And the goal of this is to give stronger guarantees that if you send a transaction, that transaction will get included into the next slot, right? And so there isn't one actor that has the ability to delay it. And then aside from FOCIL, there's also EIP-8288, and EIP-8288 basically says that you have these very large proofs, these very big expensive objects that are happening, well, we don't actually need to put them all into the block directly. Instead, what we can do is we can have this big parallel process that's verifying all of these proofs, that's happening off-chain, it's happening in the mempool, it's happening in the space in between when you send a transaction and when the transaction gets on-chain. And in that space, it replaces all of these objects with just one single proof that verifies that they all exist. So there are a lot of these changes in the technology, right? But I think the important thing about these changes is that they allow us to really change our mindset about what the goals of this kind of system are, right? So first of all, one big question is what are we protecting? And Bitcoin said we're protecting one digital asset, which is Bitcoin the currency. Ethereum says you can issue your own digital assets, we can protect that too. With modern cryptography, we're protecting digital assets and information. So in Bitcoin and in Ethereum, the cryptography and the code, it outputs the answer to one question, which is who can send what, which asset belongs to whom, who can send which asset at what time. Now we're entering this era of programmable cryptography where the code decides who can see what, right? So who is allowed to see what pieces of information, not just who can send, but who can see. This is something that is becoming programmable.
Where is computation happening? Fifteen years ago, a blockchain is just a blockchain. In the next five years, I think to a large extent already, but this is only accelerating, we are accelerating from this view of just having a blockchain to this view of having this whole pipeline, this whole big cryptographic network where you have an entire pipeline where a user does a lot of computation locally, a large amount of work happens before anything even leaves the user's device. Then the transaction passes through a mempool, there are multiple types of mempools, they have different privacy properties. Then it gets aggregated, there are multiple different kinds of participants in block building, and then it makes it on-chain. Now the mechanism, right? So Bitcoin, the same transactions were being reprocessed by every node. In Ethereum, one proof was being verified many times. And finally, what do we sacrifice? I think Bitcoin and Ethereum massively sacrificed on scalability, right? And also massively sacrificed latency. So a centralized system can offer latency of one hundred milliseconds sometimes, sometimes three hundred if it's global. Bitcoin is six hundred or about five hundred and ninety seconds of latency, about ten minutes. And Ethereum is right now twelve seconds for a block and sixteen minutes for finality. But in the future, even Ethereum's latency is currently expected to go down to four to eight seconds for a block and eight to thirty-two seconds for finality. And for scalability, this is the big change, is that the blockchain architecture will no longer always require such a large sacrifice in scalability. It will sacrifice not scalability, but scalable generality. It will sacrifice the ability to have extremely scalable computation if you do not give the system any kind of limits, any kind of guarantees into what the computation is doing. If you have computation and you can package it up into pieces that can be executed separately, that can be verified separately, that can be run, and before anything even makes it onto the chain, then very extreme scalability actually becomes possible, right? And so if you think of the blockchain as this entire system that includes the L1, it also includes L2s, it also includes the mempool, and mempools, L2s, all of these systems, they all become this kind of very complex intermediary layer where you or your agents can figure out what parts of it to go through, then huge amounts of scalability can happen inside of there. So before we were talking about a ledger, now we are talking about cryptographically secure computation. We're talking about taking computation and like really creating the cryptographic world computer, creating this system where transactions pass through these cryptographic scalability layers, and then eventually you do still have a chain, but the role of the chain becomes minimized. The chain does not handle everything. The chain handles those business logic that actually needs to be processed by every node in series becomes much smaller because everything else can be done outside now.
Now, all of these changes, they're actually only possible because of AI. I think we have to give AI a large amount of credit for making all of this possible. I mean, my slides not being ugly is also only possible because of AI, helped to make them much more beautiful. So thank you for that. But basically, every part of the workflow is becoming accelerated by AI, right? So before AI, we had zero knowledge proofs, but only fairly simple cryptographic applications were possible. And one of the reasons why is because if the number of lines of code got above maybe a hundred, maybe a thousand, it became almost certain that there would be a bug inside of it. With AI, we can use formal verification, we can use different kinds of redundant tests and specifications and analysis, and we can make much larger and more complicated things safe. And so post-AI, we can put everything that we do inside of cryptography. Also, the algorithms that we used had very high overhead, but now the overhead of one hundred x or even lower is often possible. So for ZK-SNARKs, we already have less than ten x overhead for AI inference, we have less than ten x overhead for some types of hashing. Then we have with FHE, I think about two hundred and fifty x, but it's actually very quickly decreasing. And verifying all of this before it was manual, now formal verification, another major practical bottleneck. And this was, I think, one of the big causes of L2s not being as effective as they yet could have been so far, is that there was this limit to how much you could secure them, and so you needed redundancy, you needed multiple proof systems, you needed security councils. And the new technique is formal verification, and if needed, you can even have multiple specifications and one implementation. So you can have different people, different agents, different teams have different ways of expressing what is the work that is being done, and then you automatically mathematically prove that they are all saying the same thing. And if they end up saying different things, then you have a much smaller base that everyone can look at to better understand like which side is correct.
So there's a huge amount of progress happening in the Ethereum world, both at the protocol and at the applications. I encourage people to go to roadmap.ethereum.org, check out the Ethereum protocol, and if you look at it, you notice that every single hard fork after Pectra, so every single hard fork that's after about one year from now, is going to involve very advanced cryptographic features, putting everything inside of STARKs, putting everything inside of virtual machines, aggregating STARKs, formally verifying everything, put quantum-safe signature algorithms, and all of these things together, they all are turning Ethereum from being just a blockchain to being this much bigger network with different layers at it. And one of the benefits, I think, of AI is that it doesn't just help us build all of these things more quickly and build all of these things more safely, if of course safety is something that we actually choose to care about, which in the Ethereum we do, but AI also, I think, makes it easier for anyone here to understand all of these things. And so I think if anyone is a developer or a researcher, I would actually highly encourage people to try to understand different parts of what is being built, to try to understand the different pieces, to understand what properties the different pieces have, and try to figure out, see what is there any particular piece of this that you want to contribute to. I think contributing to this kind of frontier technology and ecosystem is something that is rapidly becoming more possible and more accessible to anyone who is willing to learn and is willing to think and is willing to put like energy into this and help research and help build. So there are even open competitions that are happening for improving and formally verifying improvements to a lot of algorithms. And also, this is a good time to really rethink applications that we have been working on and build new applications, because all the applications that were built on Ethereum five years ago, ten years ago, fifteen years ago, many of them were not built with the mindset that these newer kinds of technologies were possible, that privacy can be programmable, that security of even a complex piece of code is something that can be guaranteed. And now these things have become possible. And so I encourage people to go back into developing, building, and building applications that combine together Ethereum, other decentralized networks, and other things in the real world that you want to affect or you want to improve. Thank you.
