Over the next ten years, Vitalik Buterin sees a transformative development for Ethereum that builds on previous progress and opens up new technologies and applications. Here are the most important aspects he sees for the future of Ethereum.
1. Scalability and Transaction Costs – Ethereum Is Getting Faster and Cheaper
Over the next decade, Ethereum will significantly improve its ability to process large volumes of transactions quickly and at low cost. In the past, especially around 2019, transaction fees were often problematic – ranging from $1 to $5 per transaction. These costs increased as the network was used more and more, making it impractical for many users, especially for smaller transactions. Today, however, thanks to the introduction of layer-2 solutions, transactions can often be carried out for less than a cent.
One of the major technological innovations that Ethereum is introducing to solve its scaling problems is EIP-4844. This proposal increases the storage space on the blockchain, which benefits layer-2 solutions. This upgrade allowed Ethereum to process many more transactions without a significant increase in costs. In the next few years, it is expected that these capacities will be further increased, for example, with the introduction of “Proto-Danksharding”, which will further increase data throughput to prepare Ethereum for the global mass market.
2. Balancing Usability and Decentralization
The biggest challenge for Ethereum remains creating a user-friendly system that also maintains its principles of decentralization. In the past, especially in the early days around 2015, most applications were very technical and only accessible to experienced blockchain users. However, over the next decade, Ethereum will work to solve this problem.
The goal is to create applications that offer the convenience and usability of traditional Web 2 platforms, while maintaining decentralization and user control over their data and assets. One of the pitfalls that Ethereum must avoid is developing applications that, while easy to use, sacrifice the fundamental values of decentralization and independence. A balance needs to be struck where both technical and non-technical users can reap the benefits of the platform.
3. Prediction Markets and AI Integration – The Future of Information Processing
Prediction markets are an emerging area within the Ethereum ecosystem. These markets offer a novel way to gain information about future events. In 2024, these markets have already gained popularity, and over the next decade they will continue to grow. Ethereum-based platforms like Augur that enable prediction markets will become even more accessible through lower transaction fees and improved user interfaces.
Buterin also sees the possibility of integrating artificial intelligence (AI) into these markets. This could give rise to micromarkets in which AI systems make predictions based on data that would not be efficient for humans to analyze. One example would be AI making small, specialized predictions that only move small amounts of money but are of high interest for specific questions. These markets could enable deeper and more detailed analysis of future events without the need for human participants.
4. Global Financial Integration through Ethereum Wallets
Over the next ten years, Ethereum will continue to expand its role as a global financial platform. Already today, there are wallets that aim to replace traditional payment services like Venmo, but are decentralized and accessible worldwide. In the next few years, such wallets will become even more user-friendly and secure.
The vision is that people around the world will be able to use Ethereum-based wallets to send and receive payments without relying on the services of traditional banks or financial institutions. This could be particularly important for regions where the banking system is inefficient or non-existent. A wallet like Doo, which combines the functions of a traditional finance app with the accessibility and decentralized nature of Ethereum, could play an important role in this development.
5. Zero-knowledge Proofs and Privacy – A New Level of Security
Privacy and security will continue to be key issues for Ethereum over the next decade. Zero-knowledge proofs (ZKPs) are one of the most promising technologies in this area. These make it possible to verify identities or information without revealing sensitive details. For example, a user could prove that they are authorized to participate in a vote without disclosing their personal data.
Already today, there are applications that use ZKPs to enable secure and private voting. These technologies will become even more sophisticated in the future and could be used in many areas of digital life, from identity verification to secure transactions. The use of ZKPs could help make Ethereum-based applications more secure while also maintaining user privacy.
6. Micro-prediction Markets and AI – The Future of Smaller Markets
Another area that will grow in importance in the coming years is micro prediction markets. These markets could become extremely specialized through the use of artificial intelligence (AI) and make predictions on very specific topics. These are markets that would be of little interest to human participants because the potential winnings or stakes are small. However, these markets are perfect for AI systems that can analyze large amounts of data.
The idea is that AI can answer low-volume questions such as “What will the weather be like in a small town in five days?” or “How will the price of a very specific niche product develop?” These markets would allow more precise and niche predictions to be made that would otherwise go unused in traditional prediction markets.
7. Standardization and Interoperability – Unified Experience in the Ethereum Ecosystem
A major step that Ethereum will take in the next ten years is the standardization of applications and processes within the ecosystem. Currently, there are many different layer 2 solutions and blockchains based on Ethereum, but interoperability between these networks is often complicated and prone to errors.
The goal is to make using Ethereum as seamless as possible. If a user wants to transfer USDC from one platform to another, for example, this should be possible with a single click, without complex technical processes. This will help to make Ethereum applications more accessible and attractive to the mass market.
8. Security Innovations – Greater Protection for Users
Security remains a key issue for Ethereum, especially when it comes to managing digital assets. One of the innovations that will be further developed in the coming years is the concept of multi-signature security. This is where multiple keys or instances may be required to authorize a transaction. This provides additional protection against the loss or theft of keys.
Another interesting concept is the use of zero-knowledge proofs for authentication. For example, a user could use their email account to authorize a transaction without the traditional security risks of hacking the account. Such solutions will make it possible for non-technical users to work with Ethereum securely.
9. New Forms of Interaction – Wearables and Brain-computer Interfaces
The way people interact with Ethereum-based applications will change radically over the next ten years. Experiments with new interfaces such as wearables or voice control are already underway, and brain-computer interfaces (BCIs) could play an important role in the future. These technologies allow users to interact directly with computers or blockchains without using traditional input devices.
The challenge will be to ensure that these new interfaces remain secure and decentralized. It is important that Ethereum maintains its core principles in these new applications and ensures that control over data and assets always remains in the hands of the users.
10. Tackling Fake nNews and Information Security
In a world where misinformation and fraud are growing problems, Ethereum and other blockchain technologies could help solve these issues. One possibility would be to use epistemic technologies that verify information and make it transparent on the blockchain. Prediction markets, community-based reviews, and AI could help improve the trustworthiness of information on the internet.
Ethereum could play a central role in creating a secure and trusted digital space over the next decade, where users retain control not only of their assets but also of the information they consume.
If you found this article interesting, you may also like the following: The current state of Ethereum – A comprehensive analysis
Author
Ed Prinz serves as Chairman of https://dltaustria.com, the most renowned non-profit organization in Austria specializing in blockchain technology. DLT Austria is actively involved in the education and promotion of the added value and application possibilities of distributed ledger technology. This is done through educational events, meetups, workshops and open discussions, all in voluntary collaboration with leading industry players.
Disclaimer
This is my personal opinion and not financial advice. For this reason, I cannot guarantee the accuracy of the information in this article. If you are unsure, you should consult a qualified advisor you trust. No guarantees or promises regarding profits are made in this article. All statements in this and other articles are my personal opinion.