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31 July 2021
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Vitalik Buterin of Ethereum (ETH) on Seigniorage just 5 to 10% Government Revenue

Lex Fridman asked:  Proponents of Bitcoin say Bitcoin (BTC) fixes everything Versus like Bitcoin + Lightning network for Scalability. And, then using Bitcoin for Proof of Work for Security. It is a kind of strange question, but it is a high level question.  Why do we need another technology when it has a bunch of nice features? Doesn’t Bitcoin everything already.

Vitalik expressed:  So, the thing that always attracted me about bitcoin is these values of decentralization creating these open provisional systems that everyone participate in are principles that are valid and more than just money.

Ethereum is dealt from the start as a general purpose blockchain.  There is Ether an asset on Ethereum but then you can also make decentralized financial things what we call DeFi today. And we can make DNS, the decentralized Domain Name System.  You can put prediction markets on it, you can make totally non-financial systems that keep track of whether or not some certificate was signed or cryptographic key got revoked.  There is thing big long list of interesting things that you could do with blockchains. Basically, they are like the missing piece that is without the kinds of things that a decentralized computer can do on over a minute and once you have them all of those limitations end up going away.

Ethereum was like always from the beginning about that like it isn’t just money. There is so much more that you can if you could just go ahead and make infrastructure or digital institution or DAO or whatever you want to call it. Whereas the kind of the base layer will watch if it is executed in a transparent way, where everyone can see what is going on or if you like using your own proofs so that everyone can use proofs about what is going on. You don’t need to constantly keep trusting centralized actors.

And, has the smart contracts as the core technology of Ethereum.  Smart contracts are the computer programs that are running on Ethereum.  They are the core of what makes Ethereum general purpose.

I do think that there is a lot more wrong with the world than just money. I am not one of those people who think that if you get rid of Fiat currency and you replace it with cryptocurrency then suddenly wars are going to go away because seigniorage is only a small portion of government revenue – 5 to 10% something like that.

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