Vitalik's New Book "Proof of Stake" In-Depth Analysis (2)
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Vitalik's New Book "Proof of Stake" In-Depth Analysis (2)
Introduction to the entire book.
Navigating Web3 tides with focused insightsOriginal author: Oak-Magic Cloud Labs
Original Book Chapter
Introduction to the entire book
Content Summary
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This book aims to introduce the author Vitalik Buterin (Vitalik).
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Early in his career, Vitalik worked as a Bitcoin editor. After years of research, interviews, and writing, he founded Ethereum.
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Ethereum currently faces, and will continue to face for the foreseeable future, ideological tensions between utopian and dystopian visions.
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Vitalik is a social theorist and activist—a person who thinks while doing, and reflects on consequences while acting.
Translator's Perspective
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Narrative economics teaches us that history often repeats itself. For a new technology to achieve large-scale commercial adoption, multiple factors—including narrative, technology, capital, policy, and opportunity—must align. Reviewing and summarizing the history of Web2 internet development reveals similar patterns shaped by these same forces. Among them, narrative leads the way; funding, technology, and other elements revolve around and advance through the narrative. A compelling narrative can scale further, endure longer, and come closer to changing the world. Therefore, when considering the trajectory of Web3, we should humbly revisit history with reverence.
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What sets Vitalik apart is his ability to break free from existing economic and technological paradigms, offering fresh thinking about the future and pointing toward new directions. This has been repeatedly validated through his persistent pursuit of decentralization and ideals over profit. Gaining a deeper and more comprehensive understanding of Vitalik’s ideas in storytelling and technology enables us to better capture the era’s opportunities. Prematurely shifting focus toward profit-seeking while abandoning ideals often leads to failure—Steve Jobs and Peter Thiel provide positive examples of this principle.
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One key difference between Eastern thought and Western philosophical-scientific thinking lies in their starting and ending points. Many with an Eastern mindset stop thinking once a problem is solved—they do not think beyond practical resolution. In contrast, Western philosophical-scientific thinking often stems from curiosity and abstract inquiry, producing early-stage "useless" theoretical discussions. Consider ancient inquiries into atomic theory or hypotheses in geometry and mathematics—initially devoid of tangible production value or daily utility. Applied to blockchain, technological innovation extends far beyond merely enabling DeFi, GameFi, or NFT collectibles. Utopian, abstract thinking generates even more valuable inventions.
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"Contradictions are universal." Ultimately, successful products and governance models will not be absolutely centralized or decentralized, but rather a dynamic balance under a new order. We are currently in a transitional phase—led by centralized figures—moving toward a relatively decentralized system.
Summary Translation (Partial, reordered)
This book is about introducing Vitalik Buterin, the author.
At age 19, Vitalik Buterin began creating a new internet-based economic infrastructure and became a billionaire, though prior to that he was sleeping on friends' couches. His father had emigrated from Russia to Canada during Vitalik’s childhood, and under his father’s encouragement, Vitalik developed an interest in Bitcoin.
In 2008, amid the global financial crisis, Satoshi Nakamoto first unveiled Bitcoin’s prototype—an ambition to build a currency powered by an encrypted computer network rather than issued by governments and banks. Libertarian gold investors and cryptographic cypherpunks began celebrating topics like mining, capped supply, secure and private transactions.
In 2011, instead of buying, borrowing, or mining his first Bitcoin, he preferred posting online asking if anyone would pay him in Bitcoin to support his writing about it. He continued writing for Bitcoin Magazine, covering small technical developments within Bitcoin. During this time, Vitalik consistently engaged in interviews and dialogues with others, recognizing that while Bitcoin—the new form of internet money—was difficult to use, it remained deeply captivating.
By late 2013, while most were still obsessed with the mining frenzy, Vitalik became increasingly fascinated by the underlying blockchain technology of Bitcoin. He realized something bigger was possible: a new way to create organizations, companies, and a native internet economy. After years of blogging, forum posts, and tweets, he unveiled his invention—Ethereum. If Ethereum and similar projects were to become ubiquitous infrastructure, Vitalik’s views needed to be understood and widely challenged. That same year, he authored the Ethereum white paper, igniting the still-small cryptocurrency world—an ecosystem designed by default for user autonomy, independent of legacy-world corporations, investors, and legal systems. While Bitcoin symbolized gold and mining, Ethereum sparked a culture represented by T-shirts, robots, unicorns, and rainbows.
Since Ethereum launched in 2015, many competitors have emerged, yet Ethereum remains the largest. Although ETH’s market price ranks second, the combined value of all products and community tokens within the Ethereum ecosystem occupies the largest share of this unique new economy.
Throughout this process, Vitalik gradually became Ethereum’s “benevolent dictator,” placing himself in a paradox. He sought to trigger a radical reimagining of human self-organization, yet could not predict how people would wield this power. Trusted neutrality is one of Ethereum’s design principles, yet he plays a leadership role. From early decisions at the Ethereum Foundation to recent high-stakes upgrades like The Merge, despite his best efforts, he finds it extremely difficult to separate his personal influence from the Ethereum project itself. The Ethereum system assumes human selfishness, yet Vitalik lives as an ascetic who does not seek personal gain—an anomaly in the empowerment of cryptographic rights.
There is no guarantee this will lead to a desirable future. At the end of the 2014 Miami Bitcoin Conference, Vitalik concluded his talk with a profound vision of what could be built on Ethereum, closing with a reference to Skynet from the movie *Terminator*. Ethereum embodies both utopian and dystopian aspects:
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It creates artificial scarcity by limiting token supply; yet this also allows communities to generate abundant, usable, and controllable capital.
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It excludes those unable to buy or trade high-risk digital currencies; yet in governance, it unprecedentedly inspires innovation in fully shared rights.
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It consumes massive energy to maintain permanent functionality; yet it can also price carbon emissions and pollution—something governments refuse to do.
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It created notorious nouveau riche known for extravagance, clustering in tax havens and driving up local prices.
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It rewarded early-arriving tech elites; yet it also offers a real opportunity to gradually weaken the dominance of tech giants.
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It created a speculative financial system before generating real economic value; yet unlike stock markets, value creators own the network.
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It spews out vast quantities of seemingly worthless digital collectibles; yet it also enables an open-ended new business model for creation and sharing.
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It enables pioneers to enrich themselves at the expense of latercomers; yet late arrivals also benefit from what the pioneers have built.
Readers must keep these contradictions in mind and confront them, defining winning choices for themselves and their communities. Contradictions may be troubling and painful, yet they are also encouraging.
Ethereum evokes the labor, commitment, belief, and coordination depicted in these writings. Yet it also embodies contradictions: innovation versus waste, democracy versus plutocracy, vibrant communities versus relentless distrust. Like the mechanism itself, these metaphors resist idealism, pointing to the compromises necessary to realize hope in the real world.
The papers cited subsequently were selected by Vitalik, revealing his distinctive side—as a social theorist and activist, someone who thinks while doing and reflects on consequences while acting. The crypto culture, dominated by young, male, and privileged participants, seems distant from the very problems its advocates claim to solve. Vitalik reflects this culture. He can be technical at times, but here less so than in his other works, many of which are intended only for fellow developers. Even when including formulas, his technical writing remains friendly, clear, and engaging.
Background Supplement
The core of any blockchain-based system (such as Bitcoin or Ethereum) is its consensus mechanism. This is the process by which computers agree on a common set of data and protect it from manipulation—whether a list of transactions, as in Bitcoin, or the state of the Ethereum World Computer. Achieving consensus without a central authority is not easy.
Bitcoin uses a mechanism called "proof of work," meaning many computers expend significant effort solving mathematical puzzles—all to prove their investment in securing the system. The individuals behind these computers, known as "miners," are thus rewarded. They consume nation-scale electricity and generate carbon emissions comparable to consumer-level usage.
Ethereum initially adopted proof of work due to the lack of functional alternatives at the time. But even before launch, Buterin was already discussing a switch—to another mechanism called proof of stake—once his team solved the technical challenges. In proof of stake, users demonstrate their stake not through computing power but through token holdings. Energy consumption is minimal. If token holders attempt to undermine the system, they lose their staked tokens.
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