Blockstream Co-founder Adam Back: Vitalik Buterin's Statement This Year Acknowledges Bitcoin's Path is Correct
Blockstream co-founder Adam Back stated that in 2014, before Ethereum had written any code, he advised them to use unspent transaction outputs instead of a balance-based, stateful model with active code. He also mentioned that Vitalik Buterin's statement this year equates to an acknowledgment that Bitcoin's path is correct, although he did not cite his advice from back then. Proof of work was also included in his remarks, which he claimed was similarly suggested to them.
This statement arose in the context of discussions on address reuse. The discussion in the same thread suggested that Ethereum was built on address reuse, where static addresses retain complete transaction history, and named addresses could expose the identity of holders. Back previously summarized this architecture as repeated use of addresses combined with self-exposure. The post did not include the original letter or meeting records from 2014.
In a public post on August 16, Vitalik Buterin credited Bitcoin developers, specifically mentioning Utreexo, and stated that Ethereum's current scaling strategy is a realization of these ideas. He wrote that the goal is not to dismantle accounts but to simultaneously retain unspent transaction output state and dynamic state, allowing most activities to scale significantly without sacrificing decentralization, node operability, and censorship resistance.
A research proposal in July incorporated native unspent transaction outputs into Ethereum. Once outputs are spent, the protocol primarily records that the output has been consumed, and transactions from output to output do not need to change account states. Complex decentralized finance contracts can still use dynamic storage. Secondary reports indicated that permanent payment states could reduce by 99.8%, compressing one billion records to about 300MB. Ethereum's active state continues to grow at approximately 100GB per year. Buterin also wrote in February that the execution layer is expected to scale by about 1000 times with zero-knowledge virtual machines, while the data layer could scale by about 500 times with PeerDAS and blobs, with state being another hurdle.
Back's position brings this debate back to the company level. He is the proposer of hashcash and also the co-founder and CEO of Blockstream. Blockstream sells infrastructure and sidechains related to Bitcoin, not Ethereum's account model. He tied unspent transaction outputs and early proof of work together, equating this year's research shift to a delayed confirmation of his 2014 advice.
The buyers are Ethereum researchers aiming to reduce node burdens and applications still accumulating state. The sellers are existing call paths that charge based on balance and contract storage. The driving force behind the event is the annual expansion of state by about 100GB, not a rewritten protocol. If funding and development time shift towards native outputs, the beneficiaries will be payment-type states and Bitcoin-side model narratives. Those under pressure are applications relying on permanent account balances, authorization records, and contract storage, as well as wallets designed around address reuse.
Source: Public Information
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Adam Back's records can be verified on the Bitcoin side, but the original text cannot be traced back to the 2014 conversation. Hashcash is the precursor to proof of work he proposed in 1997, which was directly cited in the Bitcoin white paper. Blockstream was founded in 2014, subsequently creating the Liquid sidechain and satellite transmission, maintaining a route that does not alter Bitcoin's main chain settlement, placing functionality on sidechains. Ethereum had proof of concept and a draft yellow paper in 2014, with the account model written as balance plus storage in the frontend phase. His claim that "the code was not yet written" does not completely align with the public timeline, and the post itself lacks citations.
This year, Vitalik Buterin is mobilizing Ethereum's own research budget, not Back's company. On August 16, he specifically mentioned Utreexo, which is a Bitcoin unspent output accumulator developed by Tadge Dryja and others, allowing nodes not to store the full set of outputs. The native output proposal in July allows payments to exit account storage while leaving complex contracts intact. The state increases by about 100GB annually, and zero-knowledge execution and data expansion cannot resolve this issue, so resources have shifted from re-proposing gas targets to transforming payment states into provable, deletable outputs.
In contrast, Ethereum itself wrote the DAO fork in 2016 as a balance rollback, and during the merge in 2022, it retained accounts while only replacing proof of work. The Bitcoin side's counterpart is that Taproot, activated in 2021, still does not alter unspent outputs. The industry's position is in a control phase: the account model has already supported decentralized finance and authorization, and the research goal is to extract payments from this state rather than starting over. Back's shift is framed as a delayed admission of error, while the proposal text describes a hybrid approach, not a migration.
Structurally, this represents a transfer of pricing power. The account model defines the unit of valuation as balance and storage slots, requiring nodes to pay for each permanent authorization in disk space. Unspent outputs define the unit of valuation as one-time consumption, exiting the active set once spent. Whoever defines the active state defines the threshold for full nodes. The mechanism is that citation rights follow the proposal: Utreexo has papers and implementations, while the 2014 verbal suggestion lacks citations, thus the scaling narrative references Bitcoin research but does not cite the recollections of Blockstream's CEO.
ABAB News · Cognitive Law
Predictions without citations cannot be treated as priorities
Hybrid proposals are not admissions of error; they are cost breakdowns
The way state is valued determines how nodes concentrate