According to a well-known crypto analyst, layer-2 projects built on Ethereum (ETH) will likely dominate the crypto payments space by 2023.
Guy, the pseudonymous Coin Bureau host, tells his 2.19 million YouTube subscribers in a new strategy session that using cryptocurrency for payments will become more popular this year.
“My fifth crypto prediction for 2023… that’s that crypto payments will become more common. This will be due to a combination of improved frontends, increased liquidity, and, most importantly, increased scalability, which will allow crypto payments to become a reality.”
Guy believes layer-2s will be critical in increasing the adoption of crypto payments. Layer-2s are cryptocurrency projects that aim to boost the number of transactions per second (TPS) that a smart contract platform can handle.
“This prediction is based on a series of headlines I saw over the summer about Ethereum founder Vitalik Buterin stating that layer-2s on Ethereum will power crypto payments. This makes sense given that, aside from Bitcoin, Ethereum is the most secure base layer for a payment system.”
He believes that an upcoming upgrade to the smart contract platform Ethereum will increase the likelihood of layer-2 dominance in crypto payments. The Ethereum Improvement Proposal 4844 (EIP 4844) is intended to improve blockchain scalability through the use of “shard blob transactions.”
“Furthermore, Ethereum improvement proposal, or EIP-4844, will be implemented sometime next summer. EIP 4844, for those who are unfamiliar, will increase the scalability of Layer-2s on Ethereum by 10x to 100x. Given that most Layer-2s already process thousands of TPS, an increase of this magnitude will put them on par with Visa.”
At the time of writing, the price of Ethereum is $1,212.