Vitalik Buterin Predicts 60% Chance for Cryptography Breakthrough to Weaken Wall Street Middlemen

Ethereum co-founder Vitalik Buterin believes that there is a 60% chance of a cryptography breakthrough that could weaken Wall Street middlemen. He predicts that advanced cryptography will become cheap enough to reshape Ethereum privacy, making it easier to generate private proofs and conduct confidential financial applications.

The technologies in question are SNARKs (zero-knowledge proofs), fully homomorphic encryption (FHE), and indistinguishability obfuscation (iO). Buterin estimates that at least one of these technologies will reach single-digit overhead by the end of the decade. However, he cautions that this timeline is more conservative than his probability estimate suggests.

Ethereum does not need all three technologies to become cheap before meaningful privacy improvements arrive. Its roadmap separates privacy into private reads, private writes, and private proving, allowing progress in one area without waiting for a universal cryptographic cost collapse. Buterin also notes that application-specific zero-knowledge systems are further ahead and can support uses such as anonymous voting, private claims, and shielded withdrawals.

The more consequential leap for decentralized finance would come from making FHE substantially cheaper. If achieved, this could enable confidential shared-state applications to become practical at scale. However, the obstacle is cost, with current benchmarks requiring multi-gigabyte cryptographic artifacts and several hours of encrypted computation.