(kitco news) ethereum co-founder vitalik buterin praised the benefits the merger would bring, including significantly lower transaction fees and a number of key updates.
Reading: Vitalik buterin fees new to ethereum
“Merger is coming. This effort we’ve been working on for the last eight years,” buterin told the crowd of avid cryptocurrency investors and developers at the futuristic blockchain conference in Toronto this week.
News about the Ethereum meltdown, likely to take place on September 19, has been fueling the late-summer rally in cryptocurrencies. the price of ether (eth) increased by 70% in the last 30 days. and the world’s second-largest cryptocurrency traded near two-month highs on Thursday, breaking above the $1,900 level.
The merger would see ethereum transition to the more efficient proof-of-stake consensus mechanism from the energy-intensive proof-of-work model, which also uses bitcoin. To read more about the merger, click here.
According to buterin, the first thing ethereum users will notice is that the cryptocurrency’s power consumption will be reduced by more than 99.9%. the latter would be much lower transaction fees.
“I know inflation is at 8.5%, gasoline prices are going up, but here, gasoline prices are going down,” he said Wednesday. “low transaction fees are the only thing that can make blockchain affordable for anyone.”
After the merger, ethereum’s transaction fee could be as low as $0.002, buterin said on Wednesday. this is key when looking at average daily earnings around the world.
“The median income per day in Canada is approximately US$113. In Poland, the median income per day is US$42. In Mongolia, it drops to US$16, and in Zambia [it is] US$4 very big differences,” buterin said. “average transaction fees on ethereum for the last two years…have been between $1 and $20.”
buterin also warned that if a new bull cycle begins, transaction costs will rise much higher. “If we see one of these bull cycles come back anytime soon, rates will go crazy again,” she said.
but even a $5 ethereum gas fee is too high for some countries. “And if we’re talking about blockchain being a global thing that’s supposed to empower people who are not empowered today in disadvantaged countries, then you can see how it’s starting to look less viable,” Buterin explained. p>
This is one of the critical things that the combination can fix. “Nowadays, with rollups, it’s already sometimes 25 cents, sometimes less than 25 cents. And if you look at what’s going to happen as a result of the upgrades, then we’re talking potential fees of maybe $0.05 cents, or maybe even as low as $0.002,” buterin said. “massively cheaper transactions to the point where on-chain transactions will become affordable to many people that they are not affordable to today.”
.@vitalikbuterin talks about the upcoming merger: while gas prices are rising in the us. uu. and #inflation is 8.5%, #ethereum gas rates are going down #futurist22 @futurist_conf #crypto pic.twitter.com/xbcqlih70h
buterin’s keynote address focused on the many opportunities the merger opens up for ethereum, including a number of new upgrades and projects.
“while it’s a shift from proof-of-work to proof-of-stake, it’s also an opportunity to take some of the ideas we’ve learned over the last eight years and use them to redesign the different parts of the ethereum chain” , he said.
An idea highlighted by buterin is to bring back crypto payments as a trend through lower energy and lower transaction fees. “In 2013, there was a huge social movement where people were really excited about trying to bring about a bitcoin economy in person. But a few years later, people just stopped talking about these things.”
See also: Mining | ethereum.org
The problem is the high fees. Back in 2013, the argument for bitcoin was low fees compared to paypal or visa. “Since then, that argument has become completely false. [But] now, if blockchains can scale, guess what? The argument is true again,” he said. “if we have much more scalable blockchains, can we recover crypto payments? that’s something worth trying.”
Another future development that buterin is excited about is a project called ethereum login, in which people can use their ethereum wallets to log into web services. “It’s basically like a Telegram clone, except you don’t have to give out your phone number to use it,” she said.
social recovery is another web3 concept that buterin is excited about. “you can say i will have five recovery contacts. two of them will be an institution. one of them can be my employer. one of them can be my dad. one of them can be a friend. and any three of those five can join and recover your accounts and reset your key to something else. and this is something you can put in the rules of a smart contract, put it on chain,” he described.
hype around nfts
Ethereum’s co-founder also criticized some of the hype around nfts, noting that in the 1990s, there was a lot of idealistic effort to try to create an ecosystem where everyone had their own crypto key.
“In the 1990s, I had these deep, philosophical arguments about this great foundational battle between the authority of the nation-state and the desire for individual freedom. Fast-forward 20 years, and it’s: ‘hey, look, it’s! a monkey!'”
This is the double-edged sword in cryptography, according to buterin. the pre-crypto space was an idealistic decentralized tech movement without enough incentives. and today’s crypto space is full of great incentives, but “sometimes you have incentives that go in very strange directions,” he noted.
The crowd is here for @vitalikbuterin and he’s talking about merging #ethereum, bringing back crypto #payments and much more! @futurist_conf #futurist22 pic.twitter.com/1pb0art3vd
buterin also talked at length about scalability and more complex concepts like proto-danksharding and danksharding, which can increase the amount of data the ethereum chain can hold. buterin sees the numbers hovering around 16 megabytes, while the average data block is only about 80 kilobytes.
“We’re talking about ethereum in the next two years being able to process a much larger number of transactions than before,” buterin said.
After the merger, buterin expects the ethereum identity ecosystem to really grow. “to me this is probably the best candidate for a sort of second main ethereum app besides the defi ecosystem,” buterin noted.