The Turning Point of Vitalik Buterin

Ethereum Co-Founder Vitalik Buterin is one of the most transparent people in the world. Almost his entire fortune is on-chain for everyone to see, and his transactions often reflect what he is passionate about.

It must be quite uncomfortable to be Vitalik Buterin, the famous co-founder of Ethereum, who is both a driving force and the mascot of the second-largest cryptocurrency. Vitalik Buterin is incredibly wealthy and famous – but the entire world can look into his wallet.

Spot onchain displays eight of Vitalik’s wallets, which together contain a total of $746 million, the vast majority of which is in Ether ($729 million), followed by USDC ($16 million). Surely, he has other wallets, but it is equally certain that these public wallets hold a large portion of his wealth, if not the largest. Every move he makes is closely watched by speculators hoping for a quick profit and journalists looking for gossip.

We can see what Vitalik does with his wealth – and we can track on-chain what he is engaged in. Rarely do transactions and idealism go hand in hand like this; Vitalik’s wallet is not just a financial account – it is a book, a manifesto.

Vitalik’s Turning Point

Just a few days ago, Vitalik transferred 400 Ether (ETH) – approximately one million dollars – to the Railgun protocol. This is not the first time, as he sent a similar amount to Railgun nearly a year ago.

Railgun is a privacy protocol on Ethereum, a smart contract that helps users anonymize their tokens, similar to the now-sanctioned mixer Tornado Cash. Users burn tokens and mint new ones, proving through a Zero-Knowledge Proof that they have burned tokens without revealing which ones. There are differences from Tornado Cash, but the basic concept is the same, and the details are not the focus here.

Vitalik Buterin has long advocated for more privacy on a blockchain. He of all people knows what it means to have a transparent wallet and the whole world watching where he sends his funds.

In a long, autobiographical blog post, he talks about the „end of my childhood.“ February 23, 2022, was a key date. „I still remember being filled with dread as I watched the TV in my hotel room in Denver at 7:20 AM local time.“ Russia crossed the border with tanks and sent bombers to Kyiv. The start of state-organized Russian mass murder on foreign soil marked a turning point not only for Chancellor Scholz but also for Vitalik Buterin.

The next morning, he learned that the Ukrainian government was seeking crypto donations on Twitter. He first thought it must be a scam, possibly by the Russians, but quickly found out it was real and posted it on Twitter. What happened next would change everything: „An hour later, a relative sent me a message that for my own safety, I should no longer travel to Russia.“

Vitalik Buterin experienced firsthand how uncomfortable financial transparency can be. He began using anonymization protocols to donate anonymously, first Tornado Cash, then Railgun. Privacy is, emphasizes Vitalik, „normal,“ meaning it should be the standard, not the exception. He started focusing more on technologies that make Ethereum more private, such as Stealth Addresses, and brought prominence to them through the weight of his name.

A Second Vision for Crypto

But the turning point for the Ethereum co-founder doesn’t stop there. He also realized that his previously neutral, morally detached actions, which were solely focused on crypto, had a cost.

„Most of my decisions in Ethereum involved responding to the pressure and wishes of other people. When I met Vladimir Putin in 2017, I did not contribute to arranging the meeting; someone else suggested it and I said ‚ok‘.“ Ok because it was good for Ethereum, even if one is critical of Putin; ok because Ethereum was more likely to change Putin than the other way around. Now, five years later, „I finally realized that (i) I had made myself an accomplice in legitimizing a genocidal dictatorship, and (ii) I no longer had the luxury of leaning back in the crypto space and letting mystical ‚other people‘ run the show.“

Instead of being a mascot of his own creation, Vitalik seeks and formulates „a second vision for how the crypto space can evolve to better meet the needs and demands of the 21st century.“ He no longer wants to be driven around by others in the success of his creation but rather to shape it himself; no compromises with what helps success in the market, but back to the roots, to the ideals.

Blockchains are supposed to protect people’s freedom. They should grant autonomy and privacy, resolve the unholy dichotomy of „anonymous and not trustworthy“ or „fully verified,“ create financial independence, and so forth. Blockchains should live up to these ideals; they should promote the utopia of a better world instead of risking the descent into a dystopia.

Defensive Acceleration

But Vitalik Buterin’s wallets currently reveal not only his interest in privacy but also in „d/acc.“ When he contemplates, it can sometimes be traced in his wallet.

Recently, Vitalik purchased the ENS address „dacc.eth“ for around $500. This happened just a few days before he described the concept of „defensive accelerationism“ (d/acc) on a Twitter Space (now X). The privacy that Railgun and other technologies provide is, in Vitalik’s world, part of the larger picture – of d/acc. He introduced the concept last November in a thoughtful but long post titled „My techno-optimism.“

The basis is „effective accelerationism“ (e/acc), the optimistic tech philosophy of „effective acceleration“: Technological progress has advantages, always more than disadvantages; thus, the faster and more, the better, hence it is moral to accelerate it unconditionally as much as possible.

In many areas, Vitalik sympathizes with this viewpoint, such as in medicine. The increase in life expectancy over the past 100 years alone is a shining example of the success of medical technology. However, he is more skeptical of other technologies, such as AI or military.

„In the current context of 2023, where this technology is made by the United States and immediately used to defend Ukraine, it is easy to see how it can be a force for good. But from another perspective, enthusiasm for military technologies demands the belief that the dominant technological power will reliably be on the right side in most conflicts, today and in the future.“

Advocates of unrestricted acceleration of military technology, Vitalik says, are betting everything on America remaining the most powerful country in the world – and staying a democratic, freedom-loving America.

A World of Defense

Vitalik distinguishes between defensive and offensive technologies. The former make it easier to defend, in a broad sense, not just physical-military; the latter make it easier to attack.

„A world that promotes defense is better for many reasons,“ concludes Vitalik, because „fewer people die, fewer economic values are destroyed, less is wasted on conflicts.“ In a world that promotes defense, „it is easier for healthy, open, and free government forms to survive,“ like Switzerland, which gains a natural defensive advantage through the Alps.

This statement may be partially true, as in the case of Switzerland, but it is absolutely naive. For example, the Middle Ages were a time of defense before the progressive cannons led to an era of offense. Yet within their castles, barons could oppress the people; in feuds, fields, not castles, were laid waste, and cities were not stormed but worn down in excruciating sieges. It was not necessarily a „better world.“

The core of Vitalik’s theory is to accelerate defensive technologies as quickly as possible to be prepared when the acceleration of offense makes it necessary. The better the digital defense, the less need there is to hunt down hackers and spy on users. The better one can block other accounts on Twitter, identify fraud in browser apps, or do so collectively, the less need there is for censorship. The faster vaccines can be developed, the less need there is to monitor superspreaders and enforce lockdowns. It doesn’t always work, but strong defensive technologies often make the offensive unnecessary; often, they are exactly what preserves freedoms.

Strengthening the defensive often comes at a price, though. The fight against spam, for instance, has led to an oligopoly of email providers; many apps, like Twitter, block internet addresses from VPNs or Tor, and so on. The fight against abuse, as with double-spending before Bitcoin, requires a central intermediary to exert control.

Blockchains, Vitalik argues, provide security without relying „on a centralized actor.“ Therefore, every effort should be made to develop decentralized, defensive technologies based on the blockchain to meet the offensive threats of the present. Vitalik may argue somewhat naively, but he articulates an honorable and broad goal.