Vitalik Buterin: Ethereum's scalability is the biggest obstacle to institutional adoption

In an interview on August 19th, Ethereum co-founder Vitalik Buterin reiterated that the Ethereum blockchain is facing challenges with low scalability and is currently seeking solutions to address this issue.

Scalability Barrier: Every Computer Must Verify Every Transaction

According to Vitalik:

The current issue with blockchain is that every computer must verify every transaction.

As previously reported by ABM, Ethereum is transitioning from the current Proof of Work (POW) to Proof of Stake (POS) to help address its scalability issues. Vitalik has also proposed another solution, suggesting that each computer only verifies a small portion of transactions in the system.

He noted that this approach comes with some security trade-offs, but would reduce transaction costs by 100 times.

Government to Play Key Role in Cryptocurrency Space

Unlike most cryptocurrency leaders, Vitalik is not against government oversight. In fact, he suggests that governments can help regulate certain Initial Coin Offerings (ICOs) and classify cryptocurrencies as securities when appropriate. He believes:

Governments typically focus on cryptocurrency exchanges, regulatory agencies are definitely struggling, they have not yet decided in many areas. Another key role is for governments to directly adopt the technology, central banks have been exploring issuing Central Bank Digital Currencies (CBDC) and using blockchain to handle different types of data records.

Vitalik also mentioned that he has been negotiating with companies and governments worldwide, noting that he can prove that governments are "increasingly enthusiastic about public blockchains."

According to a report, in April of this year, Vitalik spoke at the South Korean National Assembly, encouraging the South Korean government to relax regulations on blockchain and cryptocurrencies. He believes that governments cannot ban cryptocurrencies but should support blockchain, as the two can coexist and mutually benefit each other.

Blockchain is No Longer Just Synonymous with Bitcoin

Vitalik stated that in the past, blockchain was synonymous with Bitcoin, but now blockchain has evolved into "an independent space with many different visions." He added:

Bitcoin is a cryptocurrency that operates on the blockchain, free from the control of corporations and governments. They cannot influence Bitcoin, nor can they confiscate it.

For Ethereum, what we care about is adopting the blockchain technology behind Bitcoin, and the Ethereum blockchain has a wider range of practical applications, paving the way for decentralization of other things.

In the future, Ethereum 2.0 will take on more responsibilities, not only addressing the efficiency issues of transaction throughput but also overcoming regulatory challenges related to its asset properties, with the hope of realizing its vision of becoming the "world computer" in many years to come.

Further Reading

• Samsung Galaxy S10 and Note10 to Add Bitcoin Support
• Could Bitcoin Serve as a Hedge in Protests? Hong Kong Protesters Withdraw Assets from Banking System in Bulk

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