The increased cost of transacting on the Ethereum blockchain is having a negative impact on the adoption of the software according to the creator of the project, Vitalik Buterin.
The co-founder of Ethereum spoke to the Toronto Star earlier this week where he suggested that projects are considering whether to build technology will more than likely be butted out as the blockchain is overflowing with transactions, as it stands.
Even so, Buterin’s words speak to his understanding of the difficulties ahead for the project, with major planned upgrades including Ethereum 2.0 and a switch to proof-of-stake consensus ahead.
“If you’re a bigger organization, the calculus is that if we join, it will not only be more 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.”
According to CoinDesk, the seven-day transaction fee average for Ethereum is currently sat at a 50-day low, falling since 1st July to sit around 0.11 ether per transaction currently.
Buterin showed of PoS as a potential solution to the problem, stating that altering transaction volume could lower fees by around 100x per transaction, freeing up space for firms to build on the blockchain.
Earlier this month, we saw “the Enterprise Ethereum Alliance (EEA) appointed the Ethereum Foundation’s Aya Miyaguchi head of its Mainnet Initiative, a working group to connect enterprises with ethereum’s services.”
Discussing governance and adoption, the co-founder said price volatility and cybersecurity remain leading issues too. He finished off saying that even the government has a key role in regulating the ecosystem.
“Governments do have a role and one of the roles in regulation. The usual concerns are about cryptocurrency exchanges where the basic idea is to do fundraising for a new project by directly selling tokens on the blockchains. There are debates whether specific kinds of ICOs [initial coin offerings] are legally categorized as securities.”
It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!