While the growing institutional adoption of Ethereum might be music to the ears of ETH holders, the protocol’s co-founder, Vitalik Buterin, is not entirely amused. Buterin highlighted two key threats that could emerge as asset manager BlackRock grows its influence on ETH.
Vitalik on BlackRock – not entirely bullish
Speaking at a side event at the DevConnect conference in Buenos Aires, Argentina, Buterin remarked that if BlackRock continues to accumulate Ethereum’s native currency, ETH, at its current pace, it could run into two major problems.
Sharing the stage with Roger Dingledine, the co-founder of privacy-focused Tor Project, Buterin said institutions like BlackRock buying ETH could run against the very ethos that forms the mantle of the Ethereum project.
Buterin stressed how too much influence by institutions like BlackRock could negatively impact Ethereum’s decentralization narrative. The Ethereum co-founder said that it could drive those individuals away who made Ethereum what it is today.
Buterin went on to say that the people who have contributed to ETH since its inception did not develop the protocol’s infrastructure for Wall Street. Rather, their efforts were aimed toward developing open-source, transparent, permissionless systems.
He cautioned that if Ethereum becomes just another platform for institutional finance, then it could discourage the privacy-oriented developers, forcing them to leave the project. Consequently, ETH may lose the bulk of its technical talent, deteriorating its future outlook.
Ethereum could become Wall Street’s project
The other, more imminent threat outlined by Buterin refers to the institutional pressure on the platform that, in effect, destroys ETH’s accessibility. He added that the presence of institutions like BlackRock could culminate in execution of wrong decisions at the base layer.
He gave the example of 150 milliseconds block times, which although might provide high-frequency trading for institutional applications, but would make it mandatory for node operators to only operate from expensive areas like Manhattan, with ultra-low latency connections to validators.
Concluding, Buterin reiterated that Ethereum’s priority should be to pursue becoming a truly global system that can be accessed by anyone, anywhere, without any hurdles.
