Buterin: Layer 2 scaling solutions will make crypto payments make sense again

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While attending Korea Blockchain Week (KBW), Ethereum co-founder Vitalik Buterin stated that blockchain data compression is the final barrier to scaling transactions to fractions of a cent. He also claims that crypto payments will once again 'make sense.' This will occur as a result of layer-2 rollups, which are expected to reduce transaction costs to fractions of a cent in the near future. 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 also discussed the much-anticipated 'Merger.' Ethereum is undergoing continuous improvement. With this merger, Ethereum is ready to transition from the Proof-of-Work (PoW) mechanism to the Proof-of-Stake (PoS) mechanism. Buterin stated that there is currently "solid work happening" with rollups. Optimism's layer-2 scaling solution for Ethereum is included in the rollups. By rolling up batches of transactions and settling them on another blockchain using advanced data compression techniques, Optimism helps users save on gas fees. The task was completed successfully on Ethereum by implementing zero byte compression.

This is expected to improve Ethereum's expandability and enable more people to make crypto payments in their daily lives. Buterin stated earlier this year that all Layer 2 transaction fees must be less than $0.05 to be 'truly acceptable,' emphasising the importance of affordability. The 'high transaction fees' of Ethereum have made headlines. Buterin, on the other hand, pointed to another leading crypto, Bitcoin, and noted that the key use case of Bitcoin (BTC) presented in its white paper from 2008 was to provide a 'peer-to-peer electronic cash system.' The Bitcoin system was designed to be less expensive than traditional payment methods. Even though Bitcoin kept its promise until 2013, the picture had changed by 2018. As Bitcoin adoption grew in 2018, blockchain transactions became 'too 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," he said in a statement.