Buterin: Layer-2 scaling will allow cryptocurrency payments to make sense again

Buterin: Layer-2 scaling will allow cryptocurrency payments to make sense again

Ethereum (ETH) co-founder Vitalik Buterin has argued that the Cryptocurrency payments will “make sense,” once again as transaction fees will soon fall to fractions of a cent due to layer-2 rollups.

 

The Cointelegraph team currently on the ground at South Korea Blockchain Week (KBW) quoted Vitalik Buterin as affirming that the final obstacle to getting transactions down to fractions of a cent at scale is blockchain technology data compression. 

 

He pointed towards “solid work happening” with rollups currently such as Optimisms layer-2 scaling solution for Ethereum blockchain technology, which has worked to get the size and cost of data in Blockchain Technology transactions down by introducing zero-byte compression:

 

“So today with roll ups, transaction costs are generally somewhere between $0.25, sometimes $0.10, and in the future with roll ups with all of the improvements to efficiency that I talked about. The transaction fees could go down to $0.05, or even maybe as low as $0.02. So much cheaper, much more affordable, and will be a complete game changer.”

 

Despite primarily operative as a speculative store of value, Vitalik Buterin emphasized the key use case of Bitcoin (BTC) presented in its white paper from 2008 was to provide a “peer-to-peer electronic cash system” that was economical than traditional payment methods.

 

 

While that was true up until 2013, according to Vitalik Buterin, however, this became no longer the case in 2018 when its adoption increased and blockchain technology transactions became too expensive.

 

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“Its a vision that has been, I think, overlooked a little bit and I think one of the explanations why it has been overlooked is basically because it got priced out of the market,” he said.

 

 

In the Ethereum co-founder is view, Bitcoin and other Digital Assets will soon be able to provide this use case once again as scaling solutions — just like the Lightning Network in the case of Bitcoin — gradually bring the fees down to fractions of a cent.

 

Crypto payment uses cases

 

Vitalik Buterin drew a couple of different areas that cheap Cryptocurrency transactions will be particularly significant. Firstly, he pointed to “lower income countries or places where the existing financial system is not very effective,” as it will give residents access to dynamic payments structure over the internet, something which is already accepted despite the cost of international remittances.

 

Also Read: Coinbase Exchange Is Rapid Rise Left It Exposed In Crypto Winter

 

Secondly, he noted that in the context of Ethereum, cheap cryptocurrency transactions will also help ramp up acceptance for non-financial applications such as domain name system (DNS) servers, humanity proof-of-attendance protocols and Web3 account management services:

 

“You need to actually send a transaction to create a DNS name, you need to actually send the transaction to recover your account, you need to actually send a transaction to meet some of these adaptations. If doing each of those operations costs like $11, then people are not going into it.”

 

“Scalability is not just like some boring thing where you just need like cost numbers go down scalability, I think actually enables and unlocks entirely new classes of applications,” he added.