Vitalik Buterin: Increasing Transaction Costs Risk Limiting Ethereum Adoption

The increased cost of transacting on the ethereum blockchain is hurting the software's adoption, says project creator Vitalik Buterin.

Speaking with the Toronto Star this week, Butertin suggested projects that are considering whether to build on the technology will likely be butted out as the blockchain is overloaded with transactions, or in his words "almost full." (While a blockchain cannot ever be technically 'full,' Buterin's comments indicate his current sentiment on the severity of the problem.)

Still, Buterin's comments 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.

He told the newspaper:

Ethereum's seven-day transaction fee average, a measure of demand on the network, actually sits at a 50-day low, falling since July 1 to sit around $0.11 ether per transaction currently.

Ethereum's seven day mean transaction fee image via Coinmetrics

Buterin, following past arguments and his current work, presented PoS as a potential solution to the problem, stating that altering transaction verification could lower fees by a factor of 100 per transaction, freeing space for organizations to build on the blockchain.

More broadly, the comments show how public adoption of ethereum is a growing concern.

Earlier this month, 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, Buterin said price volatility and cybersecurity remain leading issues as well. He concluded that the government has a role in regulating the space:

Buterin pointed toward low-risk uses of blockchain, such as identification of certifications, as adoption-leading technology.

Vitalik Buterin image via CoinDesk archives