While speaking at Korea Blockchain Week, Vitalik argued that crypto payments would make sense again as transaction costs will soon fall.
Crypto payment will “make sense” as the transaction costs will soon fall to fractions of a cent due to layer-2 roll-ups.
Layer 2 solutions are designed to increase the speed and efficiency of blockchains.
Vitalik Buterin said, “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 added, “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.”
Optimism’s layer-2 scaling solution for Ethereum, which has reduced the size and cost of data in blockchain transactions by adding zero byte compression, is one example of the “solid work happening” with current roll-ups, according to him.
Initially, Bitcoin’s use case was to provide a “peer-to-peer electronic cash system” cheaper than a traditional payment system.
However, that changed in 2013, when the adoption of blockchain increased, and the transaction cost became too expensive.
According to Vitalik Buterin, 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 provide this use case again.
Paving the Way for Crypto Payments Ahead
Buterin pointed out the payment use cases.
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, which is already implemented despite the cost of international remittances.
Additionally, cheap crypto transactions in the context of Ethereum will accelerate acceptance for non-financial applications, including DNS servers, human proof of attendance protocols, and Web3 account management systems.