In a recent interview with The Star on August 19, Vitalik Buterin, Ethereum co-founder has reiterated that Ethereum blockchain faces a major scalability barrier. He explained that the blockchain is “almost full” but dealing with this issue would not only foster more adoption but also reduce transaction costs.
According to Buterin:
“Scalability is a big bottleneck because Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join it will not only be full but we will be competing with everyone for transaction space. It’s already expensive and it will be even five times more expensive because of us. There is pressure keeping people from joining, but improvements in scalability can do a lot in improving that.”
Ethereum’s Scalability Barrier: Every Computer Has To Verify Every Transaction
As per Buterin:
“The problem with the current blockchain is this idea that every computer has to verify every transaction.”
While plans to transition from the present Proof of Work (PoW) consensus mechanism to Proof of Stake (PoS) are still underway and could assist with its scalability issue, Vitalik also suggests shifting to a network where every computer verifies only a small portion of transactions in the system.
He, however, notes that this be accompanied by a modest security sacrifice. He then alludes that improving ethereum’s scalability would reduce transaction costs “by a factor of over 100 for every transaction”.
Governments Have An Important Role To Play In The Cryptocurrency Space
Unlike most cryptocurrency leaders, Vitalik is not opposed to government regulation. In fact, he suggests that the government can help regulate certain Initial Coin Offerings (ICO) and also classify digital currencies as securities where applicable.
He cites that governments can also boost adoption by using the blockchain technology for everyday activities and in cases where central banks are issuing their own digital currencies.
He mentioned that he has been in talks with companies and governments worldwide and he can attest to the fact that they’re “increasingly warming up to public chains.”
In April, Vitalik spoke before the South Korean National Assembly where he encouraged the South Korean government to loosen their noose on blockchain and cryptocurrency regulation. He explained that they could not ban cryptocurrencies but support blockchain as these two are interdependent.
Blockchain Is Diverse
Buterin stated that in the past, blockchain was synonymous with bitcoin but currently, blockchain has “split off into separate spaces that have a lot of different visions”.
“For bitcoin, the idea is that you have decentralized cryptocurrency running on blockchain and protected from corporate and state control that’s not going to deflate on you and it’s not going to get confiscated. The blockchain is just a tool to make that specific thing happen,” he said.
He then indicates that the Ethereum blockchain, on the other hand, has a far wider user case to pave the way for the decentralization of other things.
Notably, Vitalik is known to be a supporter of other cryptocurrencies besides Ethereum. In July, Buterin suggested using Bitcoin Cash (BCH) to solve the scalability barrier in the short-term as they figure out a more permanent solution. Additionally, early this month, he supported the idea of integrating Bitcoin Lightning Network into the Ethereum smart contracts asserting that the “future of cryptocurrencies is diverse and pluralist”.
Credit: Source link