Chris Skinner's blog

Shaping the future of finance

The future of money, according to Vitalik Buterin

Chris Skinner Author Avatar

What excites Vitalik Buterin (Mr. Ethereum)?

Vitalik Buterin is the leading thinker around smart contracts and blockchain, as well as being the inventor of ETH, the currency, and Ethereum, the platform. A really bright guy and always worth a listen. So, I was interested in his latest blog about the future of where all this is going, which he published on Monday.


What in the Ethereum application ecosystem excites me

It’s a lengthy piece which I could summarise, but it’s also quite complex … so I’ve just picked out a few select pieces.

Vitalik starts with …

Money: the first and still most important app

… and recounts how he managed to pay for coffee in Buenos Aires on Christmas Day using ETH. The issue however, was that it was costly and slow.

A year later, however, the calculus is different. As a side effect of the Merge –  [Ed: allowing Proof-of-Work and Proof-of-Stake] – transactions get included significantly more quickly and the chain has become more stable, making it safer to accept transactions after fewer confirmations. Scaling technology such as optimistic and ZK rollups* is proceeding quickly. Social recovery and multisig wallets are becoming more practical with account abstraction.

The gist of what Vitalik is getting at here is that all the issues of speed and scalability of cryptocurrency transactions are being addressed by the new developments of blockchain technologies through on- (Layer 1) and off- (Layer 2) chain services.


Cryptocurrency in wealthy countries

Here he takes a swipe at CBDCs (Central Bank Digital Currencies):

The transition to a "cashless society" is being taken advantage of by many governments as an opportunity to introduce levels of financial surveillance that would be unimaginable 100 years ago. Cryptocurrency is the only thing currently being developed that can realistically combine the benefits of digitalization with cash-like respect for personal privacy.

I understand this point, but think that most Joe’s and Jane’s do not. The person on the Clapham Omnibus – the reference to the general public in old school court language – probably is far happier using a government issued note than something Sam Bankman-Fried offers them to trade with. So, this is a difficult barrier to overcome although, as mentioned, I understand the sentiment of a DeFi system (decentralised financial system) over a CeFi one (centralised).



I see the stablecoin design space as basically being split into three different categories: centralized stablecoinsDAO-governed real-world-asset backed stablecoins and governance-minimized crypto-backed stablecoins.

This is an interesting one, and hits to the heart of my discussion of DeFi, CeFi or HyFi.

Going back to the previous point, will the person on main street want DeFi? Most today are happy with CeFi. But if you could combine DeFi with stablecoins that the general public recognise as being backed by real-world assets or, even more likely, real-world authorities, then I can see that working. So does Vitalik:

DAO-governed (DeFi) RWA-backed (real asset) stablecoins, if they can be made to work well, could be a happy medium.

Vitalik then goes deep into other areas like ...



DeFi “is now in the early stages of settling down into a stable medium, improving security and refocusing on a few applications that are particularly valuable. Decentralized stablecoins are, and probably forever will be, the most important DeFi product”.


Digital identities:

The big future challenge for this ecosystem is privacy. The status quo involves putting large amounts of information on-chain, which is something that is "fine until it's not", and eventually will become unpalatable if not outright risky to more and more people. There are ways to solve this problem by combining on-chain and off-chain information and making heavy use of ZK-SNARKs, but this is something that will actually need to be worked on


DAOs (Decentralised Autonomous Organisations):

There are two questions to answer: (1) What kinds of governance structures make sense, and for what use cases? (2) Does it make sense to implement those structures as a DAO, or through regular incorporation and legal contracts?

… and lots more.

It’s a fascinating piece and may well set the foundations of next generation financial services imho. Well worth the time to digest and read.



* ZK-Rollups are one of the options being developed for layer 2 construction that increases scalability through mass transfer processing rolled into a single transaction. Where Plasma creates one transaction per transfer, ZK-Rollups bundle hundreds of transfers into a single transaction. The smart contract will deconstruct and verify all of the transfers held in a single transaction. A "zero knowledge proof" approach is used to present and publicly record the validity of the block on the Ethereum blockchain. ZK reduces computing and storage resources for validating the block by reducing the amount of data held in a transaction; zero knowledge of the entire data is needed.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

Digital Transformation Programme

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Top 50 Global Thought Leaders and Influencers on FinTech 2022

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Best Financial Services Blogger

Chris’s latest book

Chris Skinner’s ‘Digital For Good’ Book Launch Event – CFTE

Global Awards

Best CEO of the Year UK 2022

Best Digital Finance Provider of the Year UK 2022

Best Financial Markets Adviser of the Year UK 2022

Portal to the Knowledge Base of the Financial Services Club UK 2022

Financial Markets Advisor of the Year UK 2022

Corporate America Today Annual Awards

Best Financial Markets Adviser of the Year UK 2022

Portal to the Knowledge Base of the Financial Services Club UK 2022

Financial Markets Advisor of the Year UK 2022

Nominee of MAD33 2021

Kids creating the future bank | TEDxAthens

Join me on Linkedin

Follow Me on Twitter!

UK’s most influential person in technology

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award


TheNextWeb – #tnw

Learn more about Chris

About Chris Skinner

Presentation at ZBP, September 2020, Warsaw, Poland

Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser