Ethereum co-founder Vitalik Buterin has listed a group of features or "transitions" that would be pivotal for the success of the Ethereum blockchain. He said these three major technical “transitions” must happen simultaneously as the Ethereum blockchain wants to continue expanding in the crypto industry.
The founder of the second largest cryptocurrency mentioned layer-2 scaling, wallet security, and privacy-preserving features as the three main Ethereum blockchain features that will help in the overall development and progress of the network.
Vitalik Buterin made his thoughts known to the public through his blog post, published on 9th June. In this blog post, the Ethereum co-founder said the blockchain network and its token would be on their way to failure without sufficient scaling infrastructure to make transactions cheap.
"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," Vitalik said in his published post.
The Three Transitions of the Ethereum Blockchain
According to Vitalik, layer-2 scaling, wallet security, and privacy-preserving features are the three transitions the Ethereum network needs to pass through to reach its fullest potential. However, Buterin took his time to analyze these three transitions comprehensively and what would happen if it wasn't achieved.
The L2 scaling transition would involve everyone moving to rollups. The wallet security transition would require Ethereum network users to move to smart contract wallets.
Finally, the privacy transition would ensure privacy-preserving funds transfers are available. In the privacy transition, the Ethereum network would also ensure all other Ethereum development tools are privacy-preserving.
While giving insights on the three transitions, Vitalik Buterin also mentioned what would happen if the Ethereum network didn't move to this lane as fast as possible. Buterin mentioned that without the first, the cost of transactions on the Ethereum blockchain would drive their users away.
He also added that if the wallet security transition is not achieved, "Ethereum fails because users are uncomfortable storing their funds (and non-financial assets), and everyone moves onto centralized exchanges."
Buterin also said Ethereum would fail without the third transition. "Ethereum fails because having all transactions (and POAPs, etc.) 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," he noted.
How To Achieve the Three Transitions
Vitalik Buterin conceded that it would be incredibly hard to achieve these three transitions, and a lot of things would be sacrificed to achieve them.
One of the things he mentioned was that there would be some changes in the wallet address created with the Ethereum network. If changes are made in the way wallet addresses are created, it would, in turn, weaken and complicate the way transactions are made.
"If users have many assets stored in different places across different chains, how do they do key changes and social recovery. Despite the challenges, achieving scalability, wallet security, and privacy for regular users is crucial for Ethereum's future. It is not just about technical feasibility but about actual accessibility for regular users. We need to rise to meet this challenge," Buterin concluded.