Transaction costs are influencing Ethereum

1 min reading

Vitalik Buterin is afraid of the increase in transaction costs on the Ethereum blockchain. This situation can have considerable consequences for his project.

Difficulties for new projects

The head of the Ethereum project gave an interview to the Canadian Toronto Star, in which he talks about projects that are going to appear on the market. Currently, however, the blockchain is overloaded with the number of transactions. It means that the price of each operation is gradually getting higher. Buterin adds:
If you have a large company, you have to decide: if you join a blockchain, it will not only be full, but you will also have to compete with other existing projects. It will make this fight - already pretty expensive - even more costly. This can cause many companies to refrain from activities.

What about Ethereum?

Buterin believes that the solution to the problem is the Proof-of-stake (PoS) algorithm, which selects the owner of a new block basing on his assets. Nevertheless, there is a fear that the adoption of Ethereum into public life will become much more difficult with all this going on. This is only one of the problems. Buterin is well aware of the market volatility, especially recently. That and network security are the main problems for the cryptocurrency industry to overcome. Politicians also have a lot to do in this area:
Governments have a role to play in the subject of legal regulations. The main concerns are cryptocurrency exchanges, as the idea is fundraising by selling tokens. There are ongoing discussions as to whether specific types of ICOs are legally qualified as securities.