2) What is Vitalik Buterin’s role within Ethereum?

Vitalik Buterin gave an opening speech about his current role at Ethereum and where he invests his time. Buterin is mainly focusing on research problems and holds the title of “Chief Scientist” with Ethereum. Together with 15 other researchers, he is answering the great question, “What will Ethereum look like in the future?” He is working on various advancements including Proof-of-Stake, scalability solutions, sharding and privacy solutions. In his own words, these are the technology upgrades that will take Ethereum from its current state into a platform which could run a decentralized application that can be used by millions of people.

3) Ethereum’s vision was to build the “smartphone” of blockchain

When Buterin wrote the Ethereum Whitepaper in 2013, his vision was to make something comparable to a smartphone of blockchain applications — a general purpose computation platform where developers could build different use cases upon.

4) Byzantium Hard Fork was smooth

A Hard Fork was conducted by the miners on October 16th, 2017 activating the Byzantium protocol upgrade on the Ethereum blockchain. Among many smaller improvements Byzantium introduced a bunch of new privacy features which we’ll hear more about in the coming months:

Ring signatures

ZK-Snarks

Big numbers exponentiation

Even though Byzantium was the largest upgrade to Ethereum to date, there is still a lot that needs to be done to address the scalability issues with Ethereum.

5) Proof-of-Stake is coming to Ethereum

Proof-of-Stake (PoS) is a category of consensus algorithms for public blockchains that depend on a validator’s economic stake in the network. In Proof-of-Work (PoW) based public blockchains (e.g. Bitcoin and the current implementation of Ethereum), the algorithm rewards participants who solve cryptographic puzzles to validate transactions and create new blocks (i.e. mining). In PoS-based public blockchains, a set of validators take turns proposing and voting on the next block, and the weight of each validator’s vote depends on the size of its deposit (i.e. stake). Significant advantages of PoS include security, reduced risk of centralization, and energy efficiency.

Casper is the much-anticipated Proof-of-Stake protocol that Ethereum will be using. With Casper, validators can deposit ETH and vote for blocks that they see as finalized. Unfortunately, we still didn’t get a timeframe of when Casper is being implemented.

6) Scaling Ethereum using sharding

Sharding is a way of partitioning data into subset nodes where each will store just a small chunk of the total network. Even though the network is being split up, the mechanisms of sharding could hold the system accountable, and if necessary, individual nodes could still rely on other nodes for data.

The proposal revealed by Buterin is for Ethereum to be split into different types of shards. There will be a main shard, which would include today’s Ethereum network. Then there would be other shards, called “universes”, where new technology upgrades could be rolled out significantly faster, while the main shard experience makes more cautious changes. Thus, Ethereum could remain its platform stability while giving developers quicker access to new technologies. Buterin thinks that sharding is going to be a solid solution to Ethereum’s scalability problems.

7) Addressing regulatory and compliance issues

There are three major legal issues being discussed in the Ethereum ecosystem and blockchain in general:

Tax

As the end of 2017 is nearing, taxation is going to be a hot topic in the cryptocurrency space. At the moment, every transaction that is being conducted using cryptocurrencies or tokens is suspect to taxation. Luckily, Coin Center is actively dealing with this and has worked out a bill which they are proposing to the congress. According to this bill, transactions under $600 dollars don’t have to be reported or taxed. Coin Center claims to be very optimistic that the bill gets passed as law.

Securities

There has long been uncertainty about whether digital currencies and tokens are being classified as a security and therefore need to comply with the strict securities regulations. Different jurisdictions have since come up with different approaches to this problem, most notably the US with The DAO report by the SEC.

The best approximation to define the boundaries between utility and security tokens is the well-known Howey Test. Established in 1946, it determines whether certain transactions qualify as an “investment contract”.

The Howey Test can be broken down (in the context of cryptocurrencies) to two questions to qualify a security token:

Is the token being sold as an investment? (In other words: Is the token issued a usage token or is the primary reason the token is being sold because of expected price increase / profit?)

Is there a central entity upon whom investors rely? (In other words: Is there a fully decentralized network (i.e. Bitcoin) that creates value for the investors/buyers or is it a centralized institution?)

More details about security regulation.

AML regulation

A final topic in blockchain regulation is whether Anti money laundering (AML) regulation applies to a specific token.

This boils down to whether a token is being used as a currency substitute. Important to note is, that it’s critical whether the token is being used as a currency substitute not whether it was designed as such.

If this is the case and If there’s a centralized issuer, they are required to guarantee compliance to AML laws as well as report suspicious activity. Otherwise, if it’s a fully decentralized cryptocurrency (i.e. Bitcoin), the exchanges are responsible to ensure AML compliance.

More details about AML regulation.

8) Wait there’s more?

Finally, there were also some hints for other improvements to the Ethereum platform that might be coming in the future. These include planned upgrades to the Ethereum virtual machine (EVM), the technology that compiles smart contract code and communicates it to the network. Other projects are eWASM, which enables Ethereum to run in a web browser, and so-called “stateless clients”, a proposal for how clients could sync with the network more quickly.