Crypto Payments to "Make Sense" with Layer 2 Growth
The co-founder of Ethereum, Vitalik Buterin, claims that layer 2 rollups will soon cause transaction prices to drop to fractions of a cent, making cryptocurrency payments "make sense" once more.
The Cointelegraph team reported on Buterin at Korea Blockchain Week (KBW) saying that blockchain data compression is the last obstacle to scaling down transactions to fractions of a cent.
KBW, Asia's largest blockchain event, started yesterday and runs until August 14 at the Grand Intercontinental, Seoul.
He said an example of the "solid work happening" is Optimism's layer 2 scaling solution for Ethereum. It has demonstrated results lowering the amount and cost of data in blockchain transactions by introducing zero-byte compression.
Buterin added that, although serving mainly as a speculative store of value, the primary use of Bitcoin (BTC) described in its white paper from 2008 was to offer a "peer-to-peer electronic cash system" that was less expensive than conventional payment methods.
He said that although this remained true until 2013, it was no longer the case by 2018 as usage grew and blockchain transactions became prohibitively costly.
According to the co-founder of Ethereum, scaling solutions, like the Lightning network in the case of BTC, will eventually lower the prices to fractions of a cent, allowing BTC and other currencies to serve this use case once again.
Use Cases for Cryptocurrency Transactions
Buterin gave examples of where inexpensive crypto transactions will be beneficial.
He pointed to "lower income nations or regions where the present financial system is not very successful", saying it would provide residents with access to crucial payment structures via the internet, which is already being used despite the expense of international remittances.
In the context of Ethereum, he noted that inexpensive crypto transactions would aid in developing Web3 account management systems, non-financial applications such as domain name system (DNS) servers, and humanity proof of attendance protocols.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.