Wu's Dialogue with Vitalik (I): Recalling the Story of Ethereum in China, How the Russia-Ukraine War Changed Me, Reflections on BCH's Large Blocks

Author: Colin Wu

This episode of the podcast features the first part of a conversation between Colin Wu, the founder of Wu Says, and Vitalik Buterin, the co-founder of Ethereum. They mainly discussed the following topics: reminiscing about the story of Ethereum's connection with China, emphasizing the "lifesaving" support from Wanxiang and memories of Bihu; discussing the reasons for the failure of BCH's large block; the cultural differences between Ethereum and Bitcoin; why recognizing Ethereum as a world computer is important; why blockchain is the only thing worth trusting; and how the Russia-Ukraine war has profoundly changed Vitalik himself.

It is worth noting that Vitalik was interviewed in Chinese, which is not his native language, so some expressions may not be entirely accurate. We appreciate the readers' understanding. The audio record was generated by GPT, so there may be some errors. Please listen to the complete podcast.

Xiaoyuzhou: https://www.xiaoyuzhoufm.com/episodes/674dc2b3c3b2a2f3342ba349

YouTube: https://youtu.be/zijS0z6FqV8

Reminiscing about China: Wanxiang May Have Saved Ethereum's Life, Deep Memories of Bihu

Colin: The first question is about your experience in China. In 2014-2015, can you recall that experience? At that time, you met many people in the Chinese crypto space, such as Wanxiang and Shen Bo, who are still one of the most supportive teams for Ethereum in China. I heard that many people rejected you back then, including some who are very famous now. Can you share your experiences from that time?

Vitalik: I first came to China in 2014, and I stayed for three weeks, visiting Beijing, Shanghai, Hangzhou, and Shenzhen. I met many Chinese teams, many exchanges, and many miners, as well as some projects. I remember visiting Huobi and OKCOIN and seeing that these companies were already very large, with more employees than Coinbase, Kraken, and other exchanges.

I found that China had a very developed ecosystem, with many large companies, while no one was doing these things abroad. I also noticed that there were already many miners in China at that time. In 2014, there weren't many applications, but by 2015, I had a lot of contact with teams like Wanxiang and Shen Bo. I stayed in Shanghai for almost two months, and they were working on some very interesting applications.

One company was digitizing part of the assets, putting a portion of the asset into a coin, where each coin might represent 1/1000 or 1/10000 of that asset. This way, different people could participate in investing in some very expensive assets.

In 2017, there were some very large projects in China, and I remember Bihu was one of them. At that time, they had already created a very interesting plan to support creators with digital currency, bringing revenue to content creators. What impressed me was that they were not just doing a demo; they were creating a real application that everyone could use, and they already had many users.

In 2014, I saw miners, and by 2015, I saw more practical applications. I felt that there were many particularly interesting people in this community, while the attention from abroad was relatively low. Therefore, I believe 2015 was a particularly important period for the Ethereum community.

After the Ethereum main chain was launched in 2015, the foundation had almost no funds. Our cash was nearly exhausted, and we were running low on Bitcoin, so we needed to sell Ether to support developers. Wanxiang purchased 410,000 Ether at a price of $1.20, spending a total of $500,000 to support our foundation. This was very important for the foundation and may have saved it, and for Wanxiang, it was also a very good investment.

Colin: Yes, Bihu was indeed an important supporter of Ethereum, and its founder was very influential in China at that time. Unfortunately, Bihu later shut down. However, in the past two years, decentralized social media has started to become more popular.

Vitalik: There are some regulatory situations in China, but I found that similar issues exist abroad as well. Many interesting projects started in 2015 and 2016, but by 2020, their development was still limited. A significant part of the reason is the issue of transaction fees. If these projects want to truly develop and become mainstream applications, they must have the required TPS. A successful application might need 100 to 1,000 TPS, but our chain could only support 4 to 5 TPS at that time.

Many applications were competing, all wanting to put their transactions on-chain, so transaction fees became very expensive. In this situation, it seemed that only DeFi could survive.

You can imagine, if you are an ordinary social media user and discover a novel social media application, but you have to pay $1, $5, or sometimes even $15 for every post or action, that is completely unfeasible. But for financial applications, this does not pose a problem. So I think it's a pity that many decentralized social and other projects did not survive during the DeFi Summer.

However, now we have many L2 solutions that have significantly reduced transaction fees. Many people are now paying more attention to topics related to L2. I am very much looking forward to decentralized social and many other projects becoming active in the future.

Colin: Maybe you can talk to the founder of Bihu and see if you can get him to restart Bihu; now is a good time.

Vitalik: Well, sure.

Recalling BCH: The Ideal of Large Blocks is Right, but Execution Capability is Insufficient

Colin: The next question I want to discuss with you is that I remember you were relatively supportive of large blocks in the Bitcoin block size debate. BCH was born in 2017, bringing this dispute to a peak. You recently wrote an article mentioning that you have had many new thoughts on this issue, believing that the failure of large blocks may be due to insufficient technical and execution capabilities, as well as the emergence of scammers like Craig Wright. Can you recall your interactions with Wu Jihan, Roger, and others at that time? What are your new thoughts on this matter now?

Vitalik: This is indeed an interesting question. Unfortunately, my Chinese was not good enough at that time, so I didn't have the opportunity to deeply understand Wu Jihan and other miners who supported large blocks. I didn't have the chance to truly understand their personalities, why they supported large blocks, and what their vision for Bitcoin was.

Roger Ver is relatively straightforward; he is not the type of "scholar" who reads a lot of books or writes articles. He is a more practical person who understands that the value of Bitcoin lies in its existence as a new currency. If a currency is to be used for payments, it needs enough block space to support a large number of transactions. Therefore, his viewpoint is quite simple and direct.

On the other hand, some people who lean more towards the "academic" side often think about longer-term issues and explore things that others are reluctant to consider. These thoughtful individuals can sometimes bring very important ideas to the world; without them, we might make bigger mistakes.

However, they can sometimes get lost in their own world and lack sufficient contact with external realities. This is similar to how some people criticize our Ethereum core developers, asking how many smart contracts they have participated in or how many DApps they have written. Similar situations arise in many fields, especially in blockchain and politics.

If these thoughtful individuals do not have enough contact with the real world, their viewpoints tend to be very "internally consistent," but they may overlook things that are crucial to people.

During the debate over small blocks and large blocks from 2015 to 2016, the Chinese community sometimes mentioned these issues. Supporters of large blocks often emphasized that they cared more about users and focused on the real world, while supporters of small blocks were more concerned with technical details, being more developers and researchers. This created a conflict.

In the article I later wrote, I mentioned that my current conclusion is that the ideal of large blocks is correct, but the execution capability of large block supporters is indeed insufficient. Many large block supporters made many mistakes when writing code, which is why the community eventually began to support small blocks.

However, we later found that supporters of small blocks also made significant mistakes. For example, they said that Bitcoin should be L1, as digital gold, while L2 could serve as the payment layer. The L2 they mentioned is the Lightning Network. The Lightning Network is a very interesting concept, and I personally appreciate this idea.

But the actual implementation of the Lightning Network has many problems; it is relatively unstable and also quite centralized. Roger Ver's book describes these issues as well.

So from an academic perspective, the concept of large blocks is very beautiful, but in the real world, there are many problems.

Supporters of small blocks did not truly focus on the importance of payments and applications. They believed that others were concerned about payment issues, while their task was to provide a technical solution to meet these needs. But they did not put in enough effort to think about whether this solution could truly be realized.

So now the development of the Lightning Network is relatively slow, although there have been some recent advancements, but most people in the Bitcoin community are still focused on Bitcoin's price, thinking more about when Bitcoin can reach the target of $1 million, with their biggest hero being Michael Saylor, because his company has purchased a large amount of Bitcoin.

Therefore, I am not optimistic about the technical development of the Bitcoin community now.

The price logic of Bitcoin and other currencies is much more complex; in fact, no one knows where the price of digital currencies comes from. This may be the biggest problem in our industry and an important issue in modern markets.

Differences in Culture Between Bitcoin and Ethereum: Tycoons and Developers?

Colin: You recently posted some interesting content that I shared the other day, which many people found intriguing. You generated a comparison between Bitcoin people and Ethereum people using GPT. The Bitcoin side is a tycoon, very wealthy, while the Ethereum side is a developer. It seems that the most important thing for Bitcoin holders is to make their coins more valuable and become richer.

But many supporters of Ethereum seem to care less about money, making many donations, perhaps focusing more on building better public goods. Is this also a cultural difference between Bitcoin and Ethereum?

Vitalik: This is indeed an interesting topic. In fact, from 2011 to 2013, the Bitcoin community was very diverse. I remember in 2011, when I entered the Bitcoin community, I found a section on the Bitcoin forum called "Politics and Society," which I particularly liked. There were some libertarians and socialists debating each other, discussing how to handle healthcare issues, whether the government should intervene in the healthcare industry, and other very interesting questions. The opinions on these issues were very different.

The debates on these topics were very civilized. If you know the debates on Twitter today, you would find that such civilized discussions are almost impossible. But in that forum, everyone could express their views very civilly, even though my viewpoint might be completely different from yours. Back then, if you wanted to reply to a post, it might involve writing a 300-word article where you needed to articulate your viewpoint carefully rather than just leaving a simple comment. This culture was very special.

The early Bitcoin community culture also had a lot of focus on public goods, the future of humanity, technology, and ideas. However, by 2014, the Bitcoin community began to split.

Why did it split? The reason is obvious. Before 2014, Bitcoin had almost no competitors. If you were interested in digital currency, your only choice was Bitcoin. But by 2014, the debate over large blocks and small blocks emerged; secondly, Ethereum appeared as the first currency that could compete with Bitcoin. To this day, Ethereum remains the only currency that can truly compete with Bitcoin.

So some people who preferred my way of thinking and the early Ethereum mindset chose Ethereum. If you preferred the Bitcoin community, you naturally stayed in the Bitcoin community.

By 2017, everyone had to make a choice: to support small block Bitcoin or to support large block Bitcoin. But in reality, people had already made their choices as early as 2015. So now, we can roughly see at least two, if not three, blockchain cultures existing. Now, there are even more other projects, such as BNB, Solana, TRON, etc., each with its unique characteristics and cultures different from Bitcoin and Ethereum. The current situation is somewhat like cultural differences between different countries, just like before the internet, there were huge cultural gaps between different countries.

I Prefer the Term and Concept of "World Computer"

Colin: If, as you said, the diversity of Bitcoin has become less, and people now may only see it as digital gold. Then if you were to describe Ethereum, what would you tell everyone you hope Ethereum to be? Is it a network nation, or is it the decentralized world computer that everyone often talks about? What kind of existence do you hope it to be?

Vitalik: I actually prefer the term and concept of "world computer" because to me, it represents many things. I hope Ethereum is not just a chain but also an ecosystem that can support a wide variety of applications.

This reminds me of an interesting point in the early Ethereum culture: when I started working on Ethereum, I thought of Ethereum as Bitcoin plus smart contracts. Because before that, I was part of the Bitcoin community and participated in some other projects, trying to add functionality to the blockchain. I had the idea, why not add a programming language that allows everyone to write various functionalities? So when I started working on Ethereum, my original intention was Bitcoin plus smart contracts. However, our core developer Gavin Wood had no interest in Bitcoin before joining Ethereum. He found Bitcoin very boring. His understanding of Ethereum was actually more direct; he wanted a combination of open-source technology and shared storage. I can explain this concept in more detail.

We can look back at the history of software. Initially, all our applications were open-source and free; everyone could download them, run them on their computers, and view and modify the source code at any time.

However, by the 1950s, some large companies began to get involved in this field, like Microsoft, which started releasing the Windows operating system and no longer made the source code public, claiming copyright over their code, which could not be copied freely. This phenomenon made many people unhappy because all software prior to this allowed users to fully own and modify it, just like owning a car, where you could modify any part and repair any damaged parts. When the computer field became controlled by large companies, many people could no longer freely control the applications and software they purchased; although the software was theirs, it did not fully belong to them. This led to the rise of the free software movement.

By the late 1990s, open-source software became an important topic, and today, many software applications are open-source; for example, the operating system I am using to converse with you is a completely open-source example. Now, open-source software plays a significant role in our lives.

However, before the 2000s, most applications were standalone applications, used individually by users, similar to Microsoft Word or single-player games. After 2000, many collaborative applications emerged, like Google Docs, which allows multiple people to edit a document simultaneously, differing significantly from Microsoft Word. Games also changed dramatically, with large-scale multiplayer online games (MMORPGs) like World of Warcraft enabling players to interact in a virtual world.

This change brought about a problem: if many people are using an application together, then that application needs shared storage. For example, where is the file stored in a collaborative document? Where is user information stored in social networks? These questions usually can only be solved through centralized servers. The biggest problem with centralized servers is that users cannot fully control their digital lives.

For instance, the file format of Microsoft Word is proprietary, making it difficult to edit those files with other software. If all important information and operations are on a centralized server, it leads to a worse situation. A centralized company can change the rules, raise prices, or even shut down services at any time. This is similar to how some startups rely on Facebook or Twitter's API; if any of these applications succeed, Facebook or Twitter can easily compete by modifying the API, allowing them to quickly replace the business of other companies.

Gavin Wood thought about these issues; he believed that creating a decentralized shared storage system might solve these problems and could become the second version of free open-source software. He found this to be an interesting topic, and I also think this topic is meaningful because blockchain is not just a financial tool; it can also play a significant role in the software field. Now, decentralized social, decentralized document editing, and other applications have begun to emerge, like DDocs (a decentralized Google Docs).

This idea is very appealing, but some people might ask if Ethereum is a digital nation. I think this concept is somewhat exaggerated because the services provided by a nation are far more than what Ethereum can offer. Ethereum is just a collection of digital programs, while a normal nation addresses broader issues, including security, education, healthcare, and various public goods. If Ethereum starts to intervene in all these areas, it would no longer be neutral, which might reduce people's willingness to participate in the Ethereum ecosystem.

The Only Thing Worth Trusting is Blockchain

Colin: I want to discuss another politically related topic with you. Last year, the U.S. approved Ethereum's ETF, which was quite unexpected because Trump had not yet taken office at that time. What are your thoughts on this issue? From your perspective, do you intentionally keep some distance from countries like China and the U.S.? Because you have previously expressed that you believe blockchain and cryptocurrencies are best utilized in places where centralized powers are not so strong. Has the Russia-Ukraine war significantly impacted many of your thoughts? It seems you have been very actively involved since this event occurred.

Vitalik: First of all, I believe that blockchain belongs to the whole world. One very important advantage of blockchain is that it can solve trust issues. If you look at other industries, like AI, there may only be a few centers—Silicon Valley, London, or Beijing, Hangzhou, and Shenzhen in China. But blockchain is very decentralized. For example, in the U.S., some applications are concentrated in New York and Silicon Valley; there is also a very important center in Berlin; in Asia, places like Singapore and China have many applications. Therefore, the greatest advantage of blockchain is that it can operate in places where trust issues are particularly severe.

Argentina is an interesting example. The biggest problem Argentina faces is inflation, with an annual inflation rate of 30%. They have become accustomed to living in such an economic environment for a long time and have completely lost faith in fiat currency. Recently, some people in Argentina deposited dollars into local banks, only for the government to suddenly announce that all dollars in banks would be forcibly converted to fiat currency, and the value of this fiat currency changed by 2 to 3 times on the same day.

This situation has led everyone to completely lose trust in banks. Argentina also faces difficulties in integrating with the international financial system. While the financial systems in the U.S., China, and Europe are very developed, Argentina, like many African countries, has relatively few opportunities to engage with the global financial system. In these marginal areas, blockchain may play the most significant role because it addresses trust issues. This is a trust issue, especially the trust issue between nations.

Ten or fifteen years ago, most people in the world were using American services. At that time, no one paid special attention to these issues because the U.S. emphasized freedom of speech and openness, and the behavior on platforms was relatively tolerant, with accounts not easily shut down.

But in the past decade, the situation has changed, especially after the Snowden incident in 2013 and the account shutdowns for political reasons in 2020. Now, there is no decentralized platform that is trusted globally; perhaps the only thing that can achieve this is blockchain. Because blockchain is the foundation of trust, it ensures that platforms do not arbitrarily shut down accounts, steal user funds, or leak personal information.

Therefore, in this ever-changing world, I believe that blockchain and related technologies have significant advantages. In recent years, I have spent a lot of time in marginal areas, such as Argentina, Thailand, Montenegro, and Turkey, because I believe that blockchain should be an international thing. We should not let it become an increasingly centralized technology. So I have a recent thought that if a blockchain is theoretically decentralized and free, but if most teams are concentrated in one place, sharing the same values, then when the next crisis occurs, they may make mistakes and ultimately lose global trust. So I care about this point.

The Russia-Ukraine War Completely Changed Me; Returning to Russia May Result in a Sentence

Vitalik: The outbreak of the Russia-Ukraine war really surprised me. A month after it happened, I saw information saying that Russian troops were near Ukraine, beginning to mobilize troops and tanks. I never expected such a significant event to occur; I thought Russia was only concerned about some issues, like NATO's expansion, and they just wanted to express that they were strong, deserving of respect, and did not want others to do things they disliked. But I did not expect them to completely invade a country, or if they did invade, it would happen gradually like in 2014.

But by early February, when I communicated with some Russians, they also felt that nothing significant would happen. Until February 24, I remember I was in Denver, and in the evening, I watched the news; at that time, everyone basically knew that a major conflict was about to occur. When this event actually happened, my thoughts underwent a significant change, and I was completely at a loss for words.

Let me first explain what happened. Around 6 PM on February 23, all my activities for the day had ended, and I was sitting in my hotel room communicating with my father. We knew that Russia might take some significant actions. Around 7 PM, my dad sent me a message saying that Russian rockets had started striking buildings in eastern Ukraine. At that moment, I realized that something truly significant was beginning to happen.

After that, I couldn't sleep for three to four hours. Normally, I would rest at the hotel, but that night I hardly slept until midnight, constantly checking for updates. Then I posted my first tweet, expressing my complete opposition to this event, updating information almost every minute, completely shocked and stunned.

The next morning when I woke up, I was shocked again. Why? Because the official Twitter account of Ukraine published an Ethereum address. My first reaction was, how could a national government directly publish a transaction address on Twitter? I suspected that Russian hackers had hacked into Ukraine's Twitter account and published an address controlled by Russia.

So I warned everyone on Twitter to be cautious, as this might be a hacker's action, and not to trade casually. At the same time, I began to contact some people I knew, especially those connected to major cities, to confirm the authenticity of this address.

Later, I confirmed through a person close to the U.S. government and a Ukrainian team that this address was real, and people could donate. I posted a second tweet clarifying my previous mistake.

An hour later, my family sent me a message saying, "You know, by making this decision, you might not be able to return to Russia in the future."

At that moment, I realized that I was not just a witness to this war; I had deeply involved myself in it. Now, for me, returning to my country of birth might mean facing significant risks, even a sentence of 10 to 15 years.

At that moment, I felt that I was no longer a child.

I was facing a significant historical event, and I had clearly chosen a side—not just my stance on the war, but also who I supported and who I opposed. This brought about tremendous changes in my personal life. I began to feel uncertain about how to think.

Initially, I donated some money to Ukraine, and a month later, I saw the news that Russia had occupied a city, and innocent Ukrainians were being killed—possibly 500 to 1,000 people. That situation made me extremely angry.

So I decided to donate again, this time $5 million. This decision further solidified my stance, and my feelings were almost the same as on February 24.

War is common in history, but in our personal lives, such large-scale wars are completely abnormal. This is the first time we are facing such a serious conflict. So in this situation, although I was initially a bit confused about what to do, I knew that at such moments, those who need help should receive help. If good people do nothing, bad people will prevail. So I did my best to help Ukraine, as much as I could.