The challenge of credibility according to Vitalik Buterin – 4th Global Blockchain Summit in Shanghai
On September 11 and 12, the 4th Global Blockchain Summit was held in Shanghai, organized by China’s Wanxiang Blockchain Labs. Vitalik Buterin, founder of the Ethereum Foundation and chief scientist at Wanxiang, took to the stage again this year to discuss the possibilities and challenges associated with the blockchain from the perspective of mechanism design in a speech entitled “New Development of Blockchain Technology”. The following is an overview of his talk. Resource allocation and system design through mathematical research Mechanism design is a field of economics that considers resource allocation rules and social system design. According to Buterin, mechanisms can be used for “incentivizing the production of things that are very valuable to not one person but to entire communities. They can be used for coordinating behavior in different ways.” Because of advances in mathematical research in recent years, opportunities to apply mechanisms to society more broadly are mounting. “I think that there are a lot of interesting synergies between [mechanisms and blockchains] and how blockchains as a technology can help implement many kinds of mechanisms, be a testing ground for many kinds of mechanisms, and what the limits of blockchain technology are in this area,” he said. As examples, Buterin gave established mechanisms such as voting, auctions, and markets as well as recent focuses of discussion such as currency exchanges, including decentralized exchanges (DEX), and the Ethereum Name Service (ENS), a replacement for the Internet’s Domain Name System (DNS). ENS uses auctions, incorporating many economic and game theoretic components. As an example of new ideas emerging outside of the blockchain, he introduced the concept of radical liberalism as found in Eric Glen Weyl’s book Radical Markets. Quadratic voting, also from the book, is an idea to reduce bias in voting, which is useful for optimizing fundraising…