Dr. Gavin Wood, co-founder of Ethereum, creator of Polkadot, and the man who coined "Web3," recently appeared on Kevin Follonier's When Shift Happens Podcast. The episode offered a dive into Wood’s journey as a developer, critiques of Ethereum, and his vision for the future of blockchain technology. Here’s what went down. 

‍

The Birth of Ethereum

To begin the interview, Gavin recounted the early days of Ethereum, a project he joined with just £500 to his name and an uncertain path forward. Despite considering a bank job at the time, an offer to work on Ethereum's white paper transformed his future as a developer. Wood not only co-authored the Ethereum Yellow Paper but also invented the Ethereum Virtual Machine (EVM), the popular engine behind Ethereum’s smart contracts. This invention helped lead to Ethereum’s expansive decentralized finance (DeFi) ecosystem as well as other projects creating smart contracts as well. 

‍

"Ethereum is Going Nowhere Without Change"

Despite his initial work on the project, a controversial claim from Wood in the podcast was his belief that Ethereum has not fully realized its potential. While it has made significant financial impacts, “creating more millionaires than any other blockchain project”, Wood emphasized that true success should focus on utility. To Wood, Ethereum's biggest challenge lies in scaling and decentralization—areas he believes need more work. 

For context, Ethereum's current scaling issues come from its reliance on a single-layer architecture, where all transactions and smart contracts are processed sequentially by every node in the network. This design, while ensuring high security, often leads to network congestion and expensive gas fees during periods of high activity. This makes Ethereum less practical for widespread use, particularly for applications requiring high transaction throughput, such as gaming and decentralized finance (DeFi).

Moreover, Wood critiques Ethereum for becoming too dependent on centralized entities like major staking providers and infrastructure companies. This reliance dilutes the original vision of a fully decentralized and trustless ecosystem. Additionally, the transition to Ethereum 2.0 and its proof-of-stake consensus mechanism have raised concerns about potential centralization risks. This is because larger entities with significant resources can dominate the staking process, creating power imbalances in the network's governance. 

Wood argues that without addressing these core issues, Ethereum may struggle to achieve its vision of “being the foundation for a decentralized, global web”. 

‍

‍

Polkadot: A Vision for Interoperability

After leaving Ethereum, Wood founded Polkadot, a multi-chain blockchain designed to improve scalability and interoperability. Polkadot introduces unique solutions like shared security for connected chains and asynchronous communication through its Cross-Consensus Messaging (XCM) protocol. Wood highlighted that while Polkadot has made strides, its sharded architecture also presents challenges. 

Sharding, which involves splitting the network into smaller, more manageable segments called "shards," allows multiple transactions to be processed in parallel. This approach significantly enhances throughput compared to traditional monolithic blockchains.

However, Wood pointed out that sharded systems introduce problems, particularly in ensuring seamless communication between shards. For example, smart contracts or applications distributed across multiple shards often struggle with real-time interactions. Additionally, sharding creates persistent divisions within the network, requiring substantial computational resources and careful management to maintain security.

To address these challenges, Polkadot has introduced Cross-Consensus Messaging (XCM) for efficient communication between shards. Wood also described Polkadot's current transformation through "Jam," a new concept aiming to address inefficiencies in sharded systems. He envisions Polkadot as a "big shared computer" capable of scaling while maintaining the agility needed for complex interactions among smart contracts.

‍

What is Web3?

Gavin Wood coined the term "Web3" in 2014, defining it as the "Post-Snowden Web." Web3 prioritizes decentralization, privacy, and trustless interactions, providing users with guarantees that centralized Web2 platforms cannot. During the podcast, Wood explained how Web3 removes reliance on intermediaries, ensuring control and security. He also noted how sticking to the core principles of Web3 was necessary in moving blockchain forward. 

‍

Personal Reflections and Life Philosophy

Beyond blockchain, Wood shared personal insights on his journey, including overcoming childhood challenges and pursuing happiness. He reflected on the importance of individuality and curiosity, values that have driven his achievements in blockchain technology. His approach to problem-solving involves analyzing existing components and recombining them to create something entirely new.

‍

Key Takeaways from the Podcast:

1. Utility Over Speculation: Wood stresses the need to focus on building useful technologies rather than chasing speculative investments.
2. Scaling Web3: Polkadot aims to solve blockchain's scalability issues while ensuring seamless interaction between smart contracts.
3. Web3’s Promise: Web3 is designed to provide trustless and decentralized solutions to replace reliance on centralized institutions.
4. Philosophical Insights: Wood believes that intellectual curiosity and the pursuit of meaningful goals outweigh financial success.

‍

Overall, the podcast highlights Gavin Wood's dual identity as a technologist and philosopher. The episode offers deep insights into blockchain’s potential as well as its current limitations and even delves into current advancements like artificial intelligence (AI). Wood emphasizes not only what blockchain technology can become but also how to use it properly. Watch the full interview on YouTube here.

‍