Vitalik Buterin: Ethereum’s Scalability Issue Is Proving To Be A Formidable Impediment To Adoption By Institutions
In a recent interview with The Star on August 19, #VitalikButerin, #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”.
Consensys Lays Off Additional 14% of Staff
Blockchain software company Consensys let go of an additional chunk of its staff while splitting its focus in two separate directions. Consensys cut its employee base down by roughly 14%, the company announced on Feb. 4 in a press release. Headquartered in New York, Consensys has also decided to split the company. Part of the operation will continue in the software sector while the other part pursues investment endeavors, the press release said.
Job cuts are nothing new to Consensys as the company previously headlined multiple stories regarding staff reductions. Rumors circulated in December 2018 surrounding a possible 60% staff cut. January 2019, however, only yielded a 13% staff cut. With its roots in the Ethereum blockchain, Consensys has multiple associated projects, including Ethereum wallet Metamask and Consensys Codefi.
Consensys now has two divisions — one to continue in software building, and the other to work on the venture side of the table, the release explained. With its 14% job cuts, Consensys is “restructuring teams to be better aligned with the needs of a focused software development company,” the statement said.
Insolar Launches Mainnet, Changes Ethereum-Based Token To A Native Coin
Enterprise blockchain platform Insolar is launching its own mainnet, debuting its native Insolar Coin (XNS) to replace its formerly used Ethereum-based token INS. After successfully piloting the testnet in 2019, Insolar will be rolling out the commercial launch of Insolar MainNet on Feb. 3, the firm said in a press release.
According to the firm, holders of the Ethereum-based ERC-20 token INS will be able to swap their tokens for XNS on the first day of the mainnet launch. Insolar users will be able to store their XNS tokens on Insolar’s new native cryptocurrency wallet, Insolar Wallet, the firm noted. As part of the token swap, some crypto exchanges announced that they will be temporarily closing INS deposit and withdrawal services in order to support the token swap.
As detailed in the Insolar Economic Paper issued in June 2019, the XNS token serves as a medium of exchange and a store of value and can be used for payments and staking. Fueled by XNS token, the Insolar MainNet is the primary public network based on the Insolar Blockchain Platform that is designed to build a blockchain-driven application marketplace.
Founded in 2017 as INS Ecosystem, the project initially was an Ethereum-based app connecting consumer goods and customers. As of June 2019, Insolar was positioning itself as a “company building a horizontally scalable hybrid blockchain platform with interoperability between public and private networks.” The launch of Insolar Mainnet comes after the company successfully launched its testnet last year.
In March 2019, Insolar released an updated iteration of the testnet that reportedly demonstrated a throughput of over 19,000 transactions per second. In order to ensure a stable mainnet launch, Insolar partnered with major global cybersecurity company Kaspersky Lab for an extensive testing and code audit. Additionally, Insolar has been collaborating with major global tech platforms such as tech giant Microsoft and computer technology corporation Oracle. Other purported partners include the Swiss Innovation Promotion Agency, Innosuisse, as well as the United Kingdom Energy Innovation Centre and the German Energy Agency. In conjunction with the mainnet launch, Insolar also announced that it will be offering bounties through bug bounty platform HackerOne in order to improve the network’s security. Insolar’s mainnet bug bounty program will initially only be available to a select group of specialists before a public rollout.
ETH Creator Vitalik Buterin Says “Bitcoin Cash Is Not Bitcoin”
In a recent tweet, Ethereum network co-founder Vitalik Buterin said Bitcoin (BTC) and Bitcoin Cash (BCH) are not the same.
“Bitcoin Cash is not Bitcoin,” Buterin said in a Feb 1 tweet responding to Brad Mills’ accusation of Buterin as Bitcoin Cash promoter. Several tweets exist that might suggest Buterin is not 100% against BCH, although he clearly made the distinction that BCH is not BTC, even back in 2017.
Several months after a 2017 hard fork divided BTC into two coins, BTC and BCH, Buterin tweeted a seemingly positive comment toward BCH. “I consider BCH a legitimate contender for the Bitcoin name,” Buterin tweeted on Nov. 13, 2017. “I consider bitcoin’s *failure* to raise block sizes to keep fees reasonable to be a large (non-consensual) change to the ‘original plan’, morally tantamount to a hard fork.” Although one might possibly interpret this tweet as support for BCH, Buterin’s additional tweet on the same day clearly shows distinction. “That said, *right now*, I think trying to claim ‘BCH = bitcoin’ is a bad idea, as it *is* a minority opinion in the ‘greater bitcoin community,’” he said in a follow-up tweet.
Almost one year later, in August 2018, Buterin again responded to BCH tweet with a comment consistent with his previous thoughts. Twitter user Meni Rosenfeld tweeted, “It has been one year since BCH split off from Bitcoin, and it is now clear that it has failed to gain traction as ‘the’ Bitcoin.” Rosenfeld added, “It was given its chance but now it should cease confusing the market with the inappropriate name ‘Bitcoin Cash.’” Buterin responded:
“I disagree. ‘Bitcoin Cash is Bitcoin’ is at this point unrealistic, but the name Bitcoin Cash by itself is totally fine.”
According to Buterin’s comments, it seems like the Ethereum co-founder has not always been negative toward Bitcoin Cash, but he has clearly signified a difference between BTC and BCH through the years. In his most recent note on the subject, commenting on a BCH development fund Twitter post, Buterin said:
“In case you’re wondering what side I’m on in all of this, I’m on the side of taking public goods challenges seriously and being open to adjusting ideological preconceptions while maintaining a commitment to core values of decentralization in order to meet them.”
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