Money 20/20 is deemed the largest event in finance from border payments, to payment management solutions, and more. “Enabling payments and financial service innovation for connected commerce at the intersection of mobile, retail, marketing services, data and technology.”
Money 20/20 promotes innovative thought landscapes that fuel emerging technologies within the financial industry. The blockchain ecosystem is a hot topic this year at Money 20/20 due to numerous banks testing its technology and potential to expedite and streamline payment systems. Multiple sessions, titled Tracks, discuss and educate financial professionals on the potential of blockchain systems. One Track, titled Ethereum: Empowering the Edge, Today’s Challenges & Tomorrow’s Opportunities, showcased the leader in blockchains, Ethereum, and its potential within the internet space.
Vitalik Buterin, Ethereum’s creator, was the star of this session with Don Tapscott, Author of “Blockchain Revolution” and CEO of The Tapscott Group, leading the interview. Tapscott describes Buterin as modest and an “archetypal polymath” who dabbles in social sciences, economics, global affairs, and others. In this Track, Buterin describes how he got into the crypto space and how he went on to develop Ethereum.
“My whole mindset was, ‘this whole space is all about permission-less innovation so why the hell should I go and ask for permission.’”
When Tapscott asked what differentiates Ethereum from Bitcoin, Vitalik responded with “the idea is that Ethereum has a more expressive programming language [than Bitcoin] that’s embedded inside the protocol so every Ethereum node understands this programming language and this programming language allows you to encode arbitrarily complex rules for how you can create these objects that we call contracts, and how you can send transactions, interact with them, how these transactions change the state.”
Using this basic scripting language, Buterin notes, that you can almost apply every application expressed within business logic. He goes on to describe how Ethereum can (in time) benefit the financial industry, industries outside of finance, and the controversy behind the hard fork after the DAO exploit.
Before Buterin explained the decision for the hard fork after the DAO exploit, Tapscott cleared the air with explaining that the DAO was exploited and not Ethereum itself, since there has been a lot of confusion between the two. During the summer of 2016, the Foundation had to make the hard decision to fork their protocol in order to correct a flaw within their network. This developed controversy within the community because forking the protocol interfered with the execution of the code exactly as written; that ‘code is law’ is an important component of the blockchain principles. The blockchain is seen as immutable, however Vitalik Buterin countered with, “the claim that blockchains are infinitely immutable is ridiculous – because the fact is if you have 40 million dollars you can 51% attack Ethereum.” He continued,
“You have to be realistic about the limitations of these systems as they stand today. The second thing, immutability by itself is pretty worthless if all you’re making immutable is ‘letting things run off a cliff.’
In order for principles to be valuable, they have to serve some kind of social purpose. Obviously immutability has value, but in order for these things to make sense, there needs to be more supporting infrastructures in terms of reducing these risks of these faults and coming up with ways of resolving these faults without going down into the base layer.”
“One of the things that increased my confidence in the community- within just one to two months after the hack and the fork took place, there are now five teams, at least, working on various kinds of automated verification tools, various kinds of fault recovery tools- all sorts of higher level infrastructure to make these mistakes less likely to happen in the future. “
In general, it’s important to view these blockchain systems as very early in their development. Ethereum, to me, is not ready for a lot of mainstream application because at the very least mainstream applications require 50,000 to 100,000 transactions per second and with Ethereum you can only [currently] do 15.”
Buterin also addressed the concerns that when Ethereum moves to a Proof of Stake concept, having a large amount of Ether could be used to attack the network, but he feels that in the long term, it’s the responsibility of the network to maintain it.
“Ethereum should be viewed as a living ecosystem and not a completed work of art.”