Ethereum Co-Founder Warns of Blockchain's 'Bottleneck' and Proposes New Cryptographic Tools

Vitalik Buterin, co-founder of Ethereum, emphasized the need for new cryptographic tools in blockchain at the 12th Global Blockchain Summit in Shanghai. He warned that traditional pseudonymity, where users hide behind wallet addresses, is no longer sufficient due to advancements in AI and data analytics.

Buterin stated that blockchains currently require every node to re-execute computations, a design choice from 2015 that now appears as a bottleneck. To address this, he advocates for using cryptographic proofs, particularly SNARKs, STARKs, fully homomorphic encryption (FHE), and indistinguishability obfuscation (iO), to verify computations without re-running them.

He proposed 'programmable privacy,' where modern cryptographic primitives bake privacy directly into the protocol layer. This approach is demonstrated in EIP-8288, which aims to use recursive STARKs for processing mempool transactions, reducing gas costs from 10 million to low tens of thousands.