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June 9 news, in a newly published essay “The Three Transitions,” Ethereum co-founder Vitalik Buterin discusses how as Ethereum evolves from a young, experimental technology to a mature tech stack, it needs to undergo three major technological transitions to offer an open, global, and permissionless experience for mainstream users.
The first transition is L2 expansion, where everyone shifts towards rollups. Rollups are layer-2 solutions on Ethereum that essentially allow for more transactions per second by processing most transactions off-chain and then settling them in batches on the Ethereum mainnet.
The second transition is to wallet security, where every user moves towards smart contract wallets. Unlike traditional wallets that use private keys for signing transactions, smart contract wallets use smart contracts to manage transactions, which can include additional security features such as multi-signature approval, daily transaction limits, and recovery mechanisms.
The third transition is towards privacy, ensuring privacy-protected fund transfers are available, and all the other tools being developed (such as social recovery, identity, and reputation) are also privacy-protected.
Buterin believes that without these three transitions, Ethereum will fail. Without the first transition, the cost of each transaction would be $3.75 (or $82.48 in the event of another bull market), and every product aimed at the mass market will inevitably forget the chain and resort to a centralized workaround for everything. Without the second transition, users would be reluctant to store their funds (and non-financial assets), and everyone would turn to centralized exchanges. Without the third transition, all transactions (including those involving POAPs) would be publicly available for anyone to view, which would be a too high privacy sacrifice for many users, and everyone would turn to centralized solutions that at least hide your data to some extent.
