Layer-2 scaling will make crypto payments make sense again according to a recent statement by Vitalik. The co-founder of Ethereum Vitalik Buterin has stated that layer-2 rollups will soon cause transaction prices to drop to a few hundredths of a cent, making cryptocurrency payments “make sense” once more.
Blockchain data compression, according to Buterin, is the last obstacle to scaling up the ability to perform transactions for just a few hundredths of a cent.
Optimism‘s layer-2 scaling solution for Ethereum, which has worked to reduce the size and cost of data in blockchain transactions by adding zero byte compression, is one example of the “solid work happening” with roll-ups at the present, according to him.
“So today with roll ups, transaction fees 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 costs could go down to $0.05, or even maybe as low as $0.02. So much cheaper, much more affordable, and a complete game changer.”
Buterin underlined that, although serving largely as a speculative store of value, the main application of Bitcoin (BTC) described in its white paper from 2008 was to offer a “peer-to-peer electronic currency system” that was less expensive than conventional payment methods.
Buterin claims that although that was true up until 2013, it was no longer the case in 2018 as adoption grew and blockchain transactions became prohibitively expensive.
“It’s a vision that has been, I think, forgotten a little bit and I think one of the reasons why it has been forgotten is basically because it got priced out of the market,” Vitalik Buterin said.
According to the co-founder of Ethereum, scaling solutions, like the lightning network in the case of BTC, will eventually lower the prices down to fractions of a cent, allowing BTC and other currencies to once again provide this use case, or in other words, layer-2 scaling will make crypto payments make sense again by reducing transaction price.
Uses for cryptocurrency payments
Buterin identified a few situations where inexpensive crypto transactions will be crucial. He began by emphasizing “lower income countries or regions where the existing financial system is not very successful,” as it will provide citizens with access to crucial payment structures via the internet, something that is already implemented despite the cost of international remittances.
Second, he noted that in the context of Ethereum, inexpensive crypto transactions will also aid in accelerating the adoption of non-financial applications like domain name system (DNS) servers, humanism proof of attendance protocols, and Web3 account management services.
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