Vitalik: Rekindling Ethereum's Cypherpunk Spirit
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Vitalik: Rekindling Ethereum's Cypherpunk Spirit
Our goal is not merely to create isolated tools and games, but to comprehensively build a freer and more open society and economy.
Navigating Web3 tides with focused insightsAuthor: Vitalik Buterin
Translation: TechFlow
On the 29th, Ethereum co-founder Vitalik Buterin published a new article titled "Make Ethereum Cypherpunk Again," discussing how the Ethereum community can return to its cypherpunk roots. The author reflects on the past decade of development in the Ethereum ecosystem and points out that due to rising transaction fees, the vision of consumer crypto payments has gradually faded.
TechFlow provides a full translation of the article.
One of my favorite memories from ten years ago was making a pilgrimage to an area in Berlin known as the Bitcoin District—a part of Kreuzberg where around a dozen shops accepted Bitcoin payments. At the heart of this community was Room 77, a restaurant and bar run by Joerg Platzer. Beyond accepting Bitcoin, it served as a community hub frequented by open-source developers, political activists, and various other characters.
A similar memory from two months ago is PorcFest (i.e., “Porcupine Festival,” meaning “Don’t Tread On Me”), a libertarian gathering deep in the forests of northern New Hampshire, where meals were primarily at small eateries like “Revolution Coffee” and “Seditious Soups, Salads & Smoothies,” all naturally accepting Bitcoin. Here, discussions about Bitcoin’s deeper political significance went hand-in-hand with everyday use.
I bring up these memories because they remind me of the deeper vision behind cryptocurrency: our goal isn't just to create isolated tools and games, but to build a more free and open society and economy comprehensively, where different parts—technical, social, and economic—are integrated.
The early vision of “web3” was also of this nature—similar in direction but slightly different. The term “web3” was originally coined by Ethereum co-founder Gavin Wood, referring to a different way of thinking about Ethereum—not merely as “Bitcoin plus smart contracts,” as I initially saw it, but more broadly as part of a set of technologies that together could form the foundational layer of a more open internet stack.
When the free and open-source software movement began in the 1980s and 1990s, the software was simple: it ran on your computer and read and wrote files locally. But today, most of our important work is collaborative and often large-scale. Thus, even if an application's underlying code is open and free, your data still flows through centralized servers operated by corporations that can arbitrarily read it, change rules, or kick you off the platform at any time. Therefore, if we want to extend the spirit of open-source software into today’s world, we need programs to access shared hard drives where multiple people can modify and access content. What are Ethereum, peer-to-peer messaging (then Whisper, now Waku), and decentralized file storage (then Swarm, now IPFS)? This was the original vision that gave birth to the now-ubiquitous term “web3.”
Unfortunately, since around 2017, these visions have somewhat receded. Few talk about consumer crypto payments; the only non-financial application widely used on-chain is ENS, and there remains a significant ideological gap between non-blockchain decentralization communities and the crypto world, with most in the former viewing the latter as a distraction rather than a kindred spirit or strong ally. In many countries, people do use cryptocurrency to send and save money, but usually through centralized means—either internal transfers within centralized exchange accounts or trading USDT on Tron.
Having lived through that era, I believe the fundamental cause of this shift has been the rise in transaction fees. When writing to the chain cost $0.001, or even $0.10, people were willing to develop diverse applications and use blockchains in various ways, including non-financial ones. But when transaction fees rose above $100 during bull market peaks, only one user group remained actively engaged: degens—and indeed, they became wealthier from price increases and even more eager to speculate. A moderate amount of speculation is acceptable; I've spoken with many people who entered crypto for financial reasons but stayed for ideological ones. But when they become the dominant user base for blockchain usage, it shifts public perception and the internal culture of the space, leading to many of the negative effects we’ve seen over recent years.
Now fast-forward to 2023. Whether it’s overcoming core scaling challenges or advancing the various “side quests” crucial for building a practical cypherpunk future, we actually have many positive developments to report:
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Rollups are finally becoming real
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After a temporary setback following regulatory crackdowns on Tornado Cash, second-generation privacy solutions like Railway and Nocturne are emerging
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Account abstraction is gaining momentum
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Long-forgotten light clients are finally becoming viable
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Zero-knowledge proofs—a technology we once thought would take decades—are here, becoming increasingly developer-friendly, and soon ready for consumer applications
These two factors—the growing recognition that uncontrolled centralization and excessive financialization are not the essence of crypto, along with the maturation of key technologies mentioned above—present us with an opportunity to steer things in a different direction. That is, at least, to make part of the Ethereum ecosystem truly become the permissionless, decentralized, censorship-resistant, open-source ecosystem we originally set out to build.
What Are These Values?
Many of these values are shared not only among many in the Ethereum community but also across other blockchain communities and even non-blockchain decentralization communities, though each places different emphasis and combinations on them.
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Open global participation: Anyone in the world should be able to participate as users, observers, or developers with maximum equality. Participation should be permissionless.
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Decentralization: Minimize reliance of applications on any single actor. In particular, applications should continue functioning even if core developers permanently disappear.
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Censorship resistance: Centralized actors should not have the power to interfere with specific users or applications. Concerns about malicious actors should be addressed at higher layers of the tech stack.
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Auditable: Anyone should be able to verify an application’s logic and ongoing operations (e.g., by running a full node) to ensure it follows the claimed rules.
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Trust-minimized neutrality: Base-layer infrastructure should remain neutral in a way that anyone can see is neutral, even without trusting the developers.
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Build tools, not empires. Feudal empires try to capture and trap users in walled gardens; tools complete their tasks while remaining interoperable with the broader open ecosystem.
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Cooperative mindset: Even amid competition, projects within the ecosystem collaborate on shared software libraries, research, security, community building, and other areas of common value. Projects strive for win-win outcomes both among themselves and with the wider world.
Within the crypto ecosystem, it's entirely possible to build things that don't follow these values. For example, one could build a system called an L2 that is actually a highly centralized system protected by a multisig, never intended to evolve into something more secure. One could build an account abstraction system aiming to be “simpler” than ERC-4337, but at the cost of introducing trust assumptions that ultimately eliminate the possibility of a public mempool and make it harder for new builders to enter. One could build an NFT ecosystem where NFT content is unnecessarily stored on centralized websites, making it more fragile than storing those components on IPFS. One could also build a staking interface that unnecessarily steers users toward already-dominant staking pools.
Resisting these pressures is difficult, but if we don’t, we risk losing the unique value of the crypto ecosystem and end up recreating a less efficient, more convoluted clone of the existing web2 ecosystem.
"No Sewers, No Teenage Mutant Ninja Turtles"
In many ways, the crypto space is a harsh environment. Dan Robinson and Georgios Konstantopoulos vividly captured this in a 2021 article discussing Ethereum as a dark forest in the context of MEV, where on-chain traders constantly face exploitation risks from front-running bots, which themselves are vulnerable to being exploited by other bots, and so on. This holds true in other aspects too: smart contracts are frequently hacked, user wallets are compromised, centralized exchanges fail catastrophically, etc.
This presents a major challenge for users of the space, but it also offers an opportunity: it means we have a space where we can genuinely experiment, incubate, and rapidly receive real-world feedback on various security technologies in response to these challenges. We’ve already seen successful responses to such challenges in different contexts:
Problems and Solutions:
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Centralized exchanges getting hacked: Use decentralized exchanges with stablecoins, so you only need to trust centralized entities for fiat handling
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Individual private keys being insecure: Smart contract wallets—multisig, social recovery, etc.
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Users tricked into signing transactions that drain funds: Wallets like Rabby show users simulations of transaction outcomes
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Users sandwich-attacked by MEV players: Cowswap, Flashbots Protect, MEV Blocker...
Everyone wants the internet to be safe. Some try to achieve this by pushing methods that enforce reliance on a single entity—be it a corporation or government—that acts as a centralized anchor of safety and truth. But these approaches sacrifice openness and freedom, contributing to the growing tragedy of the “splinternet.” People in crypto deeply value openness and freedom. High risks and large financial stakes mean crypto cannot ignore security, yet for ideological and structural reasons, it cannot adopt centralized methods to achieve it. Meanwhile, the crypto space sits at the forefront of powerful technologies like zero-knowledge proofs, formal verification, hardware-based key security, and on-chain social graphs. Together, these facts mean that for crypto, open approaches to improving security are the only viable path.
All of this means the crypto world is a perfect testbed environment—one where open, decentralized security methods can be applied in real high-risk scenarios, matured, and eventually partially deployed beyond crypto. This is one of my visions: how the idealistic and chaotic parts of the crypto world, and crypto as a whole alongside the broader mainstream, can turn their differences into symbiosis instead of intensifying tensions.
Ethereum as Part of a Broader Technological Vision
In 2014, Gavin Wood introduced Ethereum as one of a suite of tools that could be built, alongside Whisper (decentralized messaging) and Swarm (decentralized storage). The former received much attention, but unfortunately, starting around 2017 with the shift toward financialization, the latter two received far less focus. Nevertheless, Whisper lives on as Waku and is actively used by projects like Status, a decentralized communication app. Swarm continues to evolve, and now we also have IPFS, which hosts and serves this very blog.
Over the past few years, with the rise of decentralized social media (Lens, Farcaster, etc.), we have an opportunity to revisit some of these tools. Additionally, we now have another powerful new tool to add to the trio: zero-knowledge proofs. While these technologies are most widely used to improve Ethereum scalability—such as ZK rollups—they are also extremely useful for privacy. In particular, the programmability of zero-knowledge proofs allows us to move beyond the false binary of “anonymous but risky” versus “KYC’d therefore safe,” achieving both privacy and multiple forms of attestation simultaneously.
Zupass in 2023 is one example. Zupass is a zero-knowledge proof-based system incubated at Zuzalu, used both for in-person event verification and online authentication for systems like the voting platform Zupoll and the Twitter-like Zucast. The key feature of Zupass is: you can prove you’re a resident of Zuzalu without revealing which specific member you are. Each Zuzalu resident gets only one randomly generated cryptographic identity per application instance (e.g., voting). Zupass was highly successful and later applied to Devconnect’s ticketing service.
So far, Zupass’s most practical application may be voting. Various votes have taken place, some involving political controversies or highly personal topics where individuals strongly desire privacy, using Zupass as an anonymous voting platform.
Here, we can begin to see the outlines of an Ethereum cypherpunk world—at least at the purely technical level. We can store assets in ETH and ERC20 tokens, as well as various NFTs, and use privacy systems based on stealth addresses and Privacy Pools technology to protect our privacy while preventing known bad actors from benefiting via the same anonymity set. Whether in our DAOs, to help decide changes to the Ethereum protocol, or for any other purpose, we can use zero-knowledge voting systems that leverage various credentials to determine voter eligibility. Beyond token-based voting as in 2017, we can enable anonymous voting for those who have contributed sufficiently to the ecosystem, attended enough events, or implement one-person-one-vote mechanisms.
Online and offline payments can be achieved via ultra-low-cost transactions on L2s, leveraging data availability layers (or off-chain data secured via Plasma) and data compression to deliver extreme scalability to users. Cross-rollup payments can be facilitated through decentralized protocols like UniswapX. Decentralized social media projects can store activity data—posts, reposts, likes—using various storage layers, and use ENS (cheaply on L2 via CCIP) as usernames. We can seamlessly integrate on-chain tokens with off-chain attestations held by individuals and proven via ZK systems like Zupass.
Mechanisms like quadratic voting, cross-tribal consensus, and prediction markets can help organizations and communities self-govern and stay informed, while blockchains and ZK-based identities can make these systems resistant to internal centralized censorship and externally coordinated manipulation. Sophisticated wallets can protect users when interacting with dapps, user interfaces can be hosted on IPFS and accessed via .eth domains, and hashes of HTML, JavaScript, and all software dependencies can be updated directly on-chain via DAOs. Smart contract wallets, originally created to prevent people from losing tens of millions in crypto, will expand to protect people’s “roots of identity,” creating a system more secure than centralized identity providers like “Sign in with Google.”
In understanding the Ethereum ecosystem (or “web3”), we can view it as an independent technology stack competing with traditional centralized stacks at every layer. Many people will use both, often finding clever ways to combine them—for instance, using ZKEmail, you could even make your email address one of the guardians in a social recovery wallet! Yet, using different parts of the decentralized stack also brings many synergies, especially when designed for better integration.
One benefit of viewing it as a stack is that it aligns well with Ethereum’s pluralistic spirit. Bitcoin focuses on solving one, or at most two or three problems. Ethereum, by contrast, hosts many sub-communities with diverse interests. There is no single dominant narrative. The stack aims to support this diversity while striving for increasing interoperability among its parts.
The Social Layer
It’s easy to say, “The people doing X are a harmful corrupting force, while those doing Y represent the true mainstream.” But this is a lazy response. To truly succeed, we need not only a vision for the tech stack but also a social layer that enables the stack to be built in the first place.
One strength of the Ethereum community is that, in principle, we take incentives seriously. PGP hoped to put cryptographic keys into everyone’s hands so we could sign and encrypt emails for decades—but it largely failed. Then came cryptocurrencies, and suddenly millions had publicly associated keys, enabling us to start using these keys for other purposes—including circling back to encrypted email and messaging. Non-blockchain decentralization projects are often severely underfunded, whereas blockchain-based projects can raise $50 million Series B rounds. We get people to stake their ETH to secure the Ethereum network not from stakeholders’ benevolence, but from their self-interest—and thus gain $20 billion in economic security.
At the same time, incentives alone are not enough. DeFi projects often start humble, cooperative, and maximally open-source, but as they grow, sometimes abandon these ideals. We can incentivize shareholders to maintain very high uptime, but it’s much harder to incentivize them to decentralize—perhaps impossible through protocol mechanisms alone. Many key parts of the aforementioned “decentralized stack” lack viable business models. Governance of the Ethereum protocol itself is clearly de-financialized—making it more robust than ecosystems with more financially driven governance. This is why having a strong social layer in Ethereum is valuable: it vigorously enforces its values where pure incentives fall short—yet avoids creating a concept like an “Ethereum alliance” that could morph into a new form of political correctness.
Rather than balance, the two sides need integration. Many people first encounter crypto wanting to get rich, but later become familiar with the ecosystem and turn into passionate advocates for building a more open, decentralized world.
How do we actually achieve this fusion? This is a critical question, and I suspect the answer lies not in one single thing, but in a combination of techniques gained through iteration. The Ethereum ecosystem has already been more successful than most in encouraging a cooperative mindset among L2 projects purely through social means. Large-scale public goods funding initiatives like Gitcoin Grants and Optimism’s RetroPGF rounds have also been extremely helpful, offering alternative revenue streams for developers working on projects without traditional business models, without requiring them to compromise their values. But even these tools are still in their infancy; much work remains to improve them and identify or develop others better suited to specific challenges.
This is where I see the unique value of Ethereum’s social layer. It strikes a distinctive compromise—valuing incentives without being consumed by them. It embodies a unique blend: valuing a warm, tight-knit community while remembering that what feels “warm and close” from the inside can easily appear “oppressive and exclusive” from the outside, and emphasizing hard norms of neutrality, openness, and anti-censorship as safeguards against overly community-driven risks. If this combination works well, it will in turn enable the realization of its economic and technical visions.
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