According to Vitalik Buterin, the co-founder of Ethereum, the layer-2 rollups have shown that cryptocurrency payments will once more make sense because there will be a considerable reduction in transaction fees to fractions of a cent.
According to comments from the TBEN team who were present at the Korea Blockchain Week, Buterin also stated that data compression is fundamental to scaling transaction reduction down to fractions of a cent. Rollups today have a transaction cost of about $0.25; sometimes it drops to $0.10.
With the application of strategies needed to effectively lower transaction costs, the cost can drastically drop even further to $0.05; it can even drop as low as $0.02; this is a much more reasonable and inexpensive transaction rate.
Buterin went on to say that the primary goal of bitcoin when it was first introduced in its white paper in 2008 was to enable a "peer-to-peer" electronic payment system that could be made more affordable than conventional payment methods.
In 2013, it appeared like this wouldn't change until 2018.
The usage of blockchain increased, and so did the cost of transactions. It's a vision that, in his opinion, has largely been lost, and one of the reasons for this, according to him, is that it's been priced out of the market.
The co-founder of Ethereum claims that as scaling solutions, such as Bitcoin's lightning network, eventually drive down prices, BTC and other currencies will be able to serve this use case once more.
Crypto payment use cases
There are numerous sectors where transaction costs must be drastically cut or reduced. Buterin stated, "This would help enable inhabitants of the country access to vital payment structures over the internet." First, he pointed out, countries suffering from low income and an ineffective financial system. Even though it is expensive, foreign remittances are already widely used.
Furthermore, he pointed out that within the framework of Ethereum, affordable crypto exchanges would also accelerate acceptance for non-financial applications, including domain name system (DNS) servers. According to him, a transaction must be sent in order to generate a DNS name and to recover your account.
Sending a transaction is necessary to fulfill some of this necessary adjustment. People would be deterred from entering if all these necessary adjustments cost $11. Scalability, he continued, "is really not just this dull concept where you just want the costs to decrease in scalability; I think it actually allows and opens entirely new kinds of applications."
