As of the spring of 2003 Perelman no longer works in the Steklov Institute. His friends are said to have stated that he currently finds mathematics a painful topic to discuss; some even say that he has abandoned mathematics entirely. According to a recent interview, Perelman is currently jobless, living with his mother in St Petersburg.

Although Perelman says in the New Yorker article that he is disappointed with the ethical standards of the field of mathematics, the article implies that Perelman refers particularly to Yau's efforts to downplay his role in the proof and play up the work of Cao and Zhu. Perelman has said that "I can’t say I’m outraged. Other people do worse. Of course, there are many mathematicians who are more or less honest. But almost all of them are conformists. They are more or less honest, but they tolerate those who are not honest." He has also said that "It is not people who break ethical standards who are regarded as aliens. It is people like me who are isolated."

This, combined with the possibility of being awarded a Fields medal, led him to quit professional mathematics. He has said that "As long as I was not conspicuous, I had a choice. Either to make some ugly thing" (a fuss about the mathematics community's lack of integrity) "or, if I didn’t do this kind of thing, to be treated as a pet. Now, when I become a very conspicuous person, I cannot stay a pet and say nothing. That is why I had to quit.”

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In November 2002, Perelman posted to the arXiv the first of a series of eprints in which he claimed to have outlined a proof of the geometrization conjecture, a result that includes the Poincaré conjecture as a particular case.

Perelman modifies Richard Hamilton's program for a proof of the conjecture, in which the central idea is the notion of the Ricci flow. Hamilton's basic idea is to formulate a "dynamical process" in which a given three-manifold is geometrically distorted, such that this distortion process is governed by a differential equation analogous to the heat equation. The heat equation describes the behavior of scalar quantities such as temperature; it ensures that concentrations of elevated temperature will spread out until a uniform temperature is achieved throughout an object. Similarly, the Ricci flow describes the behavior of a tensorial quantity, the Ricci curvature tensor. Hamilton's hope was that under the Ricci flow, concentrations of large curvature will spread out until a uniform curvature is achieved over the entire three-manifold. If so, if one starts with any three-manifold and lets the Ricci flow work its magic, eventually one should in principle obtain a kind of "normal form". According to William Thurston, this normal form must take one of a small number of possibilities, each having a different flavor of geometry, called Thurston model geometries.

This is similar to formulating a dynamical process which gradually "perturbs" a given square matrix, and which is guaranteed to result after a finite time in its rational canonical form.

Hamilton's idea had attracted a great deal of attention, but no-one could prove that the process would not "hang up" by developing "singularities", until Perelman's eprints sketched a program for overcoming these obstacles. According to Perelman, a modification of the standard Ricci flow, called Ricci flow with surgery, can systematically excise singular regions as they develop, in a controlled way.

It is known that singularities (including those which occur, roughly speaking, after the flow has continued for an infinite amount of time) must occur in many cases. However, mathematicians expect that, assuming that the geometrization conjecture is true, any singularity which develops in a finite time is essentially a "pinching" along certain spheres corresponding to the prime decomposition of the 3-manifold. If so, any "infinite time" singularities should result from certain collapsing pieces of the JSJ decomposition. Perelman's work apparently proves this claim and thus proves the geometrization conjecture.

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