Vitalik Buterin Says Ethereum Could Become “Primary Place” Where Bitcoin Activity Happens

News
Tue, 07/28/2020 - 14:40
Alex Dovbnya
Ethereum co-founder Vitalik Buterin weighs in on the growth of tokenized Bitcoin
Cover image via vk.com
Contents

In the latest episode of the Unchained Podcastwhich began in honor of Ethereum’s five-year anniversaryone of its founders, Vitalik Buterin, weighed in on the growth of Bitcoin-backed ERC20 tokens, decentralized finance (DeFi) and the future of the second-largest blockchainamong many other things.

One of Vitalik’s wild opinions was that the Ethereum network could become the "primary place" for Bitcoin activity to occur:

Another thing that could happen is that there's just more and more demand for this, and Ethereum becomes that of the primary place where Bitcoin activity happens.

Trust concerns

The market cap of Wrapped Bitcoin (wBTC), the largest synthetic version of Bitcoin, has now surpassed $167 mln.

Image by btconethereum.com

These bridges are not without caveats. One of Buterin’s issues with them is that all of them are trusted.

Since Bitcoin does not have smart contract capabilities, BTC addresses cannot be verified on the Ethereum blockchain, which is why a single centralized entity can be in control of "multi-sigs" (multiple keys that are needed to access a wallet). This could be a problem, according to Buterin:

The problem is that if you have one of these multi-sigs and you start having you know 557, 000 bitcoins inside one of these multi-sigs then there might be an incentive for that team to run away.

Related
Ethereum Foundation Unveils ETH 2.0 Validator Launchpad in Partnership with ConsenSys

Do not put your life savings into DeFi

The DeFi ecosystem is responsible for keeping Ethereum on everyone’s lips in 2020, but Buterin also has some reservations about this ambitious industry.

Particularly, Buterin says investors do not take into account the risks associated with smart contracts.

While he praised some DeFi projects for doing "a great job" of auditing themselves, he does not believe that this space is safe enough for the average Joe:

The main takeaway from that criticism, I guess, is that defy is still DeFi is still fine, but like don't act like it’s a place where you should advocate for a lot of regular people to put their life savings into.

Ethereum’s next five years

Speaking on what the future holds for Ethereum, whose market capitalization currently surpasses $35 bln, Buterin expected average people to make use of its main applications.

He expects that "lots of people from lots of places" around the world will derive value from Ethereum.

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.


Articles by author

This site uses cookies for different purposes. Please set your preferences in Cookie Settings and visit our Cookie policy for more information on how and why cookies are used on this site. Click here for cookie policy

Cookie settings