Vitalik Buterin is Against Open-Source Ethereum Scaling Projects Conducting ICOs
Vitalik Buterin, the co-founder of Ethereum, recently declared that he will not be conducting a first coin offering (ICO) for Plasma, an open-source climbing alternative he’s developed in collaboration with Bitcoin’s Lightning Network co-author Joseph Poon.
As experts such as Coinbase co-founder and former Goldman Sachs trader Fred Ehrsam have noticed in earlier times Ethereum still has several challenges to address and resolve in regards to scalability. Ehrsam highlighted that the Ethereum network will need to improve by virtue of 100 to serve decentralized applications (dapps) with countless users.
“Large apps can’t run solely on series and likely never will. They want off-chain scaling solutions. While it’s tricky to make accurate estimates when combining scaling improvements, it is possible we can see a 100x improvement at the end of 2018, which would enable a 1–10m user program. Scaling is multidimensional. Different approaches address different items,” wrote Ehrsam.
Currently, as Ehrsam explained, many Ethereum scaling solutions and projects are addressing different issues and challenges. Plasma is one of the highly anticipated projects that is expected to scale the Ethereum network in the mid-term and improve privacy measures by using ZK-SNARKs, a cryptographic system employed by the anonymous cryptocurrency Zcash.
In open-source projects, core programmers have a tendency to accept pay cuts and salaries which are below industry standards for the benefit of their community, community, and business. Ethereum and Bitcoin programmers particularly are devoting the majority of their tools, intellectual capacity, and innovative energy in enhancing the Bitcoin and Ethereum networks so that programmers can build better software, users can experience scalability, and companies can work within a more elastic ecosystem.
The challenging part of open-source development jobs and sustaining scaling solutions is the lack of incentives for developers. Most core developers rely on the performance of the native elements of their blockchain networks as their main source of income. Hence, it may be said that many scaling solutions such as Plasma and Lightning in Bitcoin and Ethereum are being developed by developers which are not being directly incentivized for their efforts.
Buterin’s Response to the ICO of Raiden, an Open-Source Scaling Project For Ethereum
Some projects have begun to take the path of initial coin offerings (ICO) to raise funds in the short term to finance their projects. Raiden for example, an open-source Ethereum climbing solution, has announced its plans to run an ICO.
However, Raiden was criticized by Buterin and the Ethereum community which shared a similar belief in that Raiden doesn’t need its own unique native token to function, which defeats the intention of the ICO. In reaction to Raiden’s ICO, and recognizing that the lack of incentives for programmers creating scaling options, Buterin announced that he is going to be creating a personal fund to provide necessary capital for scaling jobs and open-source development projects.
“I’m declaring that 100 percent of my OmiseGo + Kyber Network advisor shares will be either donated to charity (AMF, GiveD, SENS etc) or utilized to privately fund Ethereum second-layer infrastructure (state channels, multisig pockets etc), or any combination of the two. [Rules for funding Ethereum infrastructures are projects] must be 100 percent open source, no baked-in gain scheme (incl ICO token), must be good,” stated Buterin.