Ethereum (ETH) Needs To Make Three ‘Crucial’ Transitions To Avoid Failure, According to Vitalik Buterin

Ethereum (ETH) needs to execute three “crucial transitions” to ensure its place in the future, according to Vitalik Buterin, the project’s founder.

Buterin says in a new blog post that it’s necessary for Ethereum to achieve scalability, wallet security and privacy.

“As Ethereum transitions from a young experimental technology into a mature tech stack that is capable of actually bringing an open, global and permissionless experience to average users, there are three major technical transitions that the stack needs to undergo, roughly simultaneously:

  • The L2 (layer-2) scaling transition – everyone moving to rollups
  • The wallet security transition – everyone moving to smart contract wallets
  • The privacy transition – making sure privacy-preserving funds transfers are available, and making sure all of the other gadgets that are being developed (social recovery, identity, reputation) are privacy-preserving”

Rollups are solutions that execute transactions outside of Ethereum’s blockchain but record the transactional data.

If Ethereum doesn’t achieve scaling, Buterin says the project will fail due to high transaction costs that will force products to opt for centralized solutions.

Without wallet security, the ETH founder says Ethereum users will move to centralized exchanges.

And if Ethereum continues to rely on public transactions, users will switch to centralized solutions to at least somewhat hide their data, according to Buterin.

“It is not just about technical feasibility but about actual accessibility for regular users. We need to rise to meet this challenge.”

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