# Vitalik Buterin & Sebastian Bürgel Fireside Chat @ Ethereum Cypherpunk Congress

- Speakers: [Sebastian Bürgel](https://streameth.org/speakers/sebastian-burgel), [Vitalik Buterin](https://streameth.org/speakers/vitalik-buterin)
- Channel: [Ethereum Cypherpunk Congress](https://streameth.org/ethereum-cypherpunk-congress)
- Date: 2025-10-07
- Duration: 27:06
- Topics: Education
- Watch: https://streameth.org/watch/yt-wJR6pDyarU8
- YouTube: https://www.youtube.com/watch?v=wJR6pDyarU8

## Description

Vitalik Buterin [Ethereum] & Sebastian Bürgel  [GnosisDAO] disscussed Ethereum roadmap to cypherpunk values & privacy-enhancing technologies.

2000 visitors, 50 speakers, 1 Cypherpunk Congress @ Bangkok, 11.11.2024

Event: https://lu.ma/w3pn-meetup-devcon7
Ethereum Cypherpunk Congress #2 Nov 25: https://lu.ma/u2sw5kpv

## Transcript

well all right uh thanks all for coming today I have the feeling vitalic doesn't need an introduction normally he's being introduced as the founder of ethereum I would like to introduce vitalic as in my mind the biggest supporter of Cipher py values in ethereum and I think that deserves an Applause I mean that being said vitalic I uh think you wrote it really night nice blog post I think it was uh the last one you wrote last year um on you know making ethereum Cipher Punk and I think that resonates very well with many people here in this room and yet as I attend some of the you know events around Defcon uh I see things that seem to be in pretty stark contrast especially to like durat nice talk you know which talked about uh all the bad things some agencies do I've seen yesterday some presentation that had in the center of it you know presenting a nice ecosystem and the center of it all in bold letters it said US banking system so at least in my mind I do see a contrast between what you describe as desirable and what some people you know I say in the defi eism specifically proposed as hyperf financialised how do you feel about that yeah I think when people saw the post like a lot of people definitely really appreciate it and people like keep referring to it even as this day and I think at the time the thing that was missing was definitely just a concrete statement of like here are some of the goals that we all value and let's like talk about what they are so that we at least have something to coordinate around in order to actually achieve them and that's step one and I feel like step one was actually done well the trickier step is step two right and step two is like getting from here to those values actually being reflected um in the world and I think it's definitely true that like crypto as a whole has you know in many ways look pretty Divergent from that and I mean there's even trends that I worry about right like even basically the fact that know originally This was meant to be this like neutral ecosystem that does not depend on governments and like there definitely now is this current of uh people who are basically explicitly saying that they defense strategy is say basically making a point that if a politician opposes them then like they'll get $20 million trying to push them out of office and like to me that is like you know not what I signed up for and uh I think you know in addition to like not being what I sign up for for the world like it's also something that uh wouldn't does not really uh imply many incentives to care about you know like things like privacy or care about things like decentralization because it's like the centralized thing has an easier time like shaking a hand with a politician and like getting it let it keep happening uh so it's uh yeah so I think there's the question of like how do we yeah actually actually go further and I think at this stage it's a big part of is it's a question of incentives right uh so the incentives basically like what is the incentive to I mean if we go even like down the list of the uh post I made a bit later on alignment right like what is the incentive to be open source what is the incentive to follow Open Standards instead of like pushing your own ERC that everyone else can't keep up with but still claiming that you're part of Team Open Standards because you have an ERC um as what is the incentive to build something that passes the walk away test when by definition if your company disappears you have no chance of getting Revenue anyway what is the incentive to make something that passes the company becomes evil test because you know yourself becoming evil is a potential Revenue opportunity what is the incentive to build something that is uh like positive some to the eorum ecosystem or to the world as a whole in a way that goes beyond what you already get with Market incentives which are sometimes sufficient and some and great and sometimes not right and I think you know ecosystem some times answers exist and sometimes they don't right so especially like if someone is making a relatively small project right if you're at the stage of making something like demo level then actually you get a lot of support right like if you have something that just requires $300,000 to make and people of the type in this room generally agree that it's like a good thing that helps make turns the ethereum ecosystem into something that better realizes its values then like there's a whole bunch of people that will give you $300,000 right and there's Ean Foundation there's probably a bunch of people who have a bunch of ideas anybody who is hacking on something or or you know thinking about something here mhm yeah okay I see a bunch of hands so where where do you send these people specifically yeah so Grant programs exist I mean one obviously you can just reach out to um ethereum Foundation ESP right so ecosystem. support that's one there's all kinds of individual like other non- ethereum Foundation entities I mean recently you know argot just spun out also the you know the big treasuries and uh you know the the Unis swaps and makers I guess now Skies um of the world uh there's uh op if you like it's retroactive but there's optimism rpgfan people there's entities like status there's entities like Golem Golem also has their own uh pgf program that's talked about less but it also exists I think octant doapp is the is is the is the site uh so there's uh like just like a lot of different even individuals that just really care about these topics right so for like smaller projects right that funding exists the place where I think it does like things become much more challenging is basically that like once you get from like demo stage to like actual serious I wants to build something that can like withstand The Winds of like mainstream ethereum use uh like right basically the level of development that you need to get to that stage is like often let's say you we'll call it like the 10 to30 million level right and I mean sometimes it's less right and but sometimes like it is that level especially for some like for something like an L2 like often gets even higher for a privacy project it's like it's often lower but it depends on general purpose infrastructure that actually took that amount of funding to get there right and the challenge is like when you go from the small side to the B size the incentive structure sort FS from like full socialist to full capitalist in of like you know the small size like you get all of these nice grants programs and you're supposed to like just do the good thing and be values aligned but then once you get to a bigger size like there's really nothing that's uh provide like at least from a raw incentives layer that's like competing with the incentive to like just grow big and like try to dominate potentially try to monopolize and like that to me is an imbalance and it feels to me like what you want is something healthy in the middle you want something where ultimately you know it's more Capital efficient than charity and you want something where incentives actually do depend on like having users and like actually you know the on the ground fact of uh whether or not you're building something that people want but then at the same time you know you want more incentives to be like to be open source to be decentralized to um like be secure and um at the same time like more incentives to take collaborative standards based approaches instead of like trying to become bigger than everyone else and like create wall Gardens and walk in and dominate the ecosystem and I think this is like definitely still one of those unsolved problems I mean speaking of the incentives here and especially on the on the funding side the question is a bit how do we get there right because you know as a funer of a privacy project I can tell you it's hard right I mean as you know but you went through it so um you know if you are contemplating the idea of building a cipher Punk values align project or you know in the next you know I'll be a bit judgy here and say reaking reaking leveraged rwa L2 lending protocol whatever you know yes you can raise a $10 million seed round and you know you can have a whole lot of fun and great side events with you know great drinks and stuff but like what do you say to the people who say no I want to go for this Cipher Punk Vision how do we make it happen like how do we yeah yeah I mean I think we definitely do need more experimentation in funding models like I think we do want something that is uh like more Capital efficient then charity so in the sense of uh you know providing money with an expectation of at least in some situations like actually getting it back and even getting a return uh but that at the same time isn't like fullon like hey please like make me a token in 12 months or else I'm going to start yelling at you and like Blacklist you from the whole Community right so which is like not too far from like the darker stuff that actually happens right uh so it's uh like I think yeah we want to like try like try to create funding structures that are somewhere in between those two and like what exactly that looks like I think that's still open to interpretation just like public goods funding is open to interpretation like you have gcoin you have optimism you have this you know like octant know Golem thing which is also actually you know like starting to look into those kinds of hybrid approaches you know you have protocol Guild and uh like the question of uh you know what are um Hybrid models that actually make sense I think it's uh really worth thinking about yeah and I mean uh so I think funding in the startup side is is one side of the world but let's talk about ethereum right so I mean ethereum is infrastructure which is used to settlement infrastructure for a bunch of defi things but also increasingly for a bunch of you know Cipher Punk things right so that are not just Financial right like enss great example right so and like a whole lot of of other things that people are settling on but yet they have to use this infrastructure which is largely influenced by decisions that are you know somewhat hyperf Financial right so if we think about you know we want credibly neutral l2s like based roll ups that you know are now maybe facing problems of you know centralized block building which is a direct consequence of hyperf financialized settlement infrastructure MH that feels still weird like what do these what do these Cipher Punk projects do like do they all just go to nosis chain and settle there or like what what do we do yeah I mean I think uh so one sorry I'm TR I had my sentence and I'm trying to restart it again um the uh yeah so okay so what you don't want I think is you don't want to like lean too hard on like badgering everyone to like do the to to do the aligned thing right because like if you try to Badger everyone to be virtuous then like eventually you start getting a community of people that are just like too fed up with it and they start doing their own thing and then eventually they like get all the way up to 51% and then like the the community swings in the other direction and you lose completely right um and so I think like you want we want some kind of realistic strategy and ideally a realistic strategy that depends on a smaller number of actors so I'll give one example of something that I'm happy about one thing that I'm happy about is recently I think we've been seeing a shift in Market structure of how L2 is work where there's growing separation between the technology providers and sort of the front- facing L2 teams right so examples of this include one nether mes announcing surge right where like a big part of the intent is like they don't want to necessarily play and like win the rollup game themselves it's just like creating software and if other people use it then great um two the Paradigm you know like wrath and Etha efforts three within the optimism ecosystem you know like optimism itself is a serious software house and then a lot of the l3s and like other things in the super chain end up by using that same technology um for you know succinct as like Z proving people like there there's this growing list of these uh providers and then separately you have these l2s and l2s are starting to specialize more and like basically everything but the tech and like actually reaching out to users and making the like the thing mainstream right and like this is not a full separation right but I think it's like partially happening and the reason why I think it's a good thing is because that basically means that like the tech decisions get made by people who have the expertise to and often already have the willingness and enthusiasm to make the technical decisions in the right way right like if Sony had to make a layer two from scratch and they had to write every line of code from scratch then the chance that they would ever even add something like a um you know an L1 censorship resistance bypass channel it's like lower right but I you know they're working with the op stack and like this is a team that actually really cares about a lot of those things and basically use the infrastructure that has a like more value as we care about like really baked in right and like this so a lot more things that like basically happen by default right and I think like that's one example of the yet answers that's happening right I think uh like I'm definitely not one of these me know like market maximalists like dollars optimize the economy by themselves people right but at the same time I do think that you know the value like of uh idealistic motives and uh like enthusiasm and ideas Ando and stories and all these things really important right and I think there's lots of examples of this in the wild right like one fun fact about the world is that the total annual revenue of open AI plus all of its competitors is this year is less than only fans right but even still right if you think about like the level of talent that's going into only fans like it's not low there's serious people there but if you think about the the you know if you think about the level of talent that's going into like things um like making all of these crazy AIS that's like a whole other level right and like that extra level of motivation like that's not the dollars right but and so I think the ideal solution is one that you know like it does it is something that is realistic from in like from a dollar perspective and actually gives those incentives but then at the same time like it doesn't like require the whole world to be converted to the religion but if there are if there is a small group of enthusiasts that are also like talented people then like you should be able to take maximum advantage of that and I think we are starting to see some signs of that okay cool so I guess that means that if I am working on you know some more Cipher Punky thing at least I can leverage the same technology which you know the nice people build and which is also used by all the you know highly financialized use cases but I get the upsides of it as well exactly okay cool well um let let's come back from the layer two to the to the layer one right because one cyer thing that people like is obviously home staking right anyone hear home staking on any chain yes I see a bunch of hands cool awesome now um these home stakers are sometimes looking at the big guys right so the professional stakers and you know are thinking well what do they actually add to the security of ethereum really right so let's say I add one e to binance binance is staking it on you know some servers that are managed by let's say a cloud provider the cloud provider has like a you know service provider who happens to be their devops guy who manages their servers what exactly does that add to the security of ethereum you know versus maybe fewer e that are being staked by home stakers yeah I I agree with this I mean there's two ways to measure St like security provided by staking right one way is like number of dollars to make a 51% attack right and so the theory is that well if bu ever actually does 51% attack ethereum then even if they succeed then they're going to lose like billions of dollars that will get burned in either slashing or an inactivity leak following a minority softwork right and but then that's one argument but then from that perspective like arguably we have way too much security right now right because what we have now is like 30 million e staking you need a third of it to do an Attack under any realistic conditions you actually need somewhere between one half and twoth thirds and so let's say 15 million eth multiply that by I think the price is like up to 3,200 now and so we're talking 48 billion do right there are lots of ways to like whack ethereum dead for less than $48 billion right and so it's like well if instead we you know like loosen up a bit on that $48 billion number like $4.8 billion is plenty right and then if we at the same time put extra work in protecting the peer-to-peer layer making sure that there aren't any serious bugs improving every other dimension of robustness improving the social layer on net ethereum would be much more secure right now so what's the other perspective of security it's like basically how much independent entropy are you contributing to this like function that is uh choosing the next block right and if you're just putting your coins into the biggest thing then like you're basically contributing no entropy right if you're a solo Staker then you're contributing a lot of entropy and the challenge uh basically is that like the protocol does not have good ways of like detecting what independent entropy is you can try right so earlier this year Tony varer and I published a series of posts and like analyses talking about this concept of anti-correlation penalties that basically try to penalize a validator more if they like do fail and like do bad things at the same like even just like go offline at the same time as many other validators doing the same thing in a way that like actually works fairly frequently and our analysis suggests that could reduce the uh uh the disparity between solo stakers and like the best of the best stakers with the best infra by a factor of about two right so like it could be a gain right but at the same time it's like well binance can afford really huge infrastructure and actually in the normal case they're actually like pretty reliable in terms of being always online right and it's like the situations that you're worried about are actually situations that just take a long long time to ever actually happen right and so I think part of the answer inevitably has to be not economic like part of the answer definitely has to be like staking as a hobby staking as a social thing staking as a thing where there's extra protocol ways to try to identify who actually is providing this uh independent entropy and potentially rewarding them in extra protocol ways um St potentially it involves like trying to combine staking together with other services and like make it easier for people to like basically potentially have a box that you know dust staking is a decentralized VPN exit nodes has the Llama 405b running on it just like have do all the cipher buuny things that like at the same time all for the price of one like a lot there's like a lot of extra protocol things that I think are really worth looking into as well and like you know you try to like make it into a hobby and not just talk about it as a money-making opportunity um so I think you like inevitably you will have to lean on that though at the same time we also have to improve the omics to the point where at least there isn't a large disincentive to join and like be part of the big pools right and uh I think we can do that with a combination of like one possibly the anticorrelation work but then two just massively reducing the software and the hardware barrier to entry to being a Staker which stateless clients uh po like Z snarking the chain like basically the whole Verge road map does as well and so I think and also you know reducing the 32 eth minimum that like that in the in the long-term merge road map so all of these things together I think like give us the best fighting chance we can have so it seems like vitalic says nerds and not exchanges secur e theorem I think that resonates with a bunch of people here um now if I if I hear you say that okay we should make that easier and and lower the requirements also that seems to be at odds with some things I hear in the ecosystem of saying let's increase the block gas limit right because so my anecdote is well I live in an unfortunate place on the planet where I have you slow up link and there are limits right so yes so yes okay so where do you draw them like who do you want to exclude like should I not validate blocks on ethereum because I have you know so so the long term here is the best of both worlds right the long term here is that you get the best of like basically you use Technologies like statelessness you use ZK proving and so on to be able to get the benefits of larger blocks but at the same time much lower verification cost other interesting Technologies are ways to try to like separate out the authority of of of like staking participants right so if for example for me reasons block production is inherently this like centralizing game that gets won by people with the best hftt connections and like binance accounts and everything then at the very least you like separate out the authority of making inclusion list like selecting transactions that have to get included or you potentially separate out like the top of block and the middle of block and you try to like at least like decentralize as many of those authorities that are enough to make sure that the ethereum chain fulfills the guarantees that it needs to fulfill so I think those are the two techniques all right nice so that was probably like a a lot of like maybe technical uh details but there's also a hackaton coming up on the weekend and I would like to hear from you vitalic like what is on your wish list maybe some ideas of like Cipher Punk things that maybe some people here in the room want to hack on next weekend and still have a week to get up to speed on by the way mhm yeah so One Direction that I think people don't talk about enough actually we'll have a little bit of people of talking about this at diak day and at defon uh but basically I think uh one like shift that valuable for like The Cypher Punk movements to make I think is like 30 years ago it was uh conceived as this thing that's like fully oppositional to know governments corporations like all kinds of existing actors and I think uh one thing that we can do is I think if we want to improve the the the movement's chance of succeeding and making an impact like identify the situations where there actually are points of alignment with a lot of people even within like some of these uh mainstream institutions and uh like basically try to like front run the you know like the nasty ways of solving those uh those problems as so eloquently talked about with better ways of solving those problems and like one specific example I can give um is uh if you have an encrypted messenger you can use locally running llms to do scam detection right like you can potentially have a system where like a user can even download llms that from an entire like set of different different providers with different biases biases different goals and like they could automatically you know like scan through stuff that's uh happening could be messaging this could also even be part of your crypto wallet right a lot of ethereum wallets like have some level this detection already and then if something is uh popping up that looks like it's a scam then like it can warn you right and this is something that runs fully on device and ideally you have a choice of different providers and so you do it doesn't like entrench one particular political Elite who decides what right what's right and what's wrong ideally you have uh and it stays all on your device not shipping any data whatsoever to big brother and and uh like and then ideally at the operating system level like you can actually like sandbox this whole thing so that's all that it can do and it actually can't like later on download an update that starts pushing this stuff up to Big Brother right and then you know you you solve like real safety problems that lots of people including lots of us have and that also like lots of people within governments have and like actually like basically do a better job of solving problems that people have than even the centralized world can um I mean also uh shout out there's this interesting app in Taiwan called message Checker I see you know like Audrey there's and also a fan of it so I think like Proto versions of things like this uh already exist but I think it's a direction that could be explored more cool as a last any like we obviously don't mention ticker symbol but um any shout out to you know Cypher Punk and privacy apps I seen that you you know like you know to talk about actually you know value aligned l2s like fuel or mention projects uh you know like fers like any okay a quick list uh so privacy on the Privacy for like privacy for coins uh so realway um also Oxbo which is is coming out soon and like that has like also a lot of uh good uh like proof of uh the Privacy pools technology so I use Railway right now and you know also excited about Oxo um on the uh I mean privacy preserving messaging it's like there's a lot right it's like you know like status keeps quiet improving and then there is I know like Simplex is like getting exciting exciting there's like a lot of these different chats um DX um AKA file verse for privacy preserving documents it's like actually quite good secure operating system graphos I use it it's amazing it's like surprisingly few user experience trade-offs uh so I think it's great and then also ethos which is a based off of graphos and like they also recently released a hardware device um so yeah and a lot of really good stuff awesome that sounds fantastic thank you vitalic for supporting Cipher Punk values