Vitalik Buterin Scalability and Usability Biggest issues facing blockchain
Vitalik Buterin, the 25-year-old co-founder of Ethereum talked to Star Business in Canada during the Blockchain Futurist Conference in Port Lands.
Vitalik talks about how Ethereum was created to make decentralization possible for other things than just Bitcoin. He gives examples of DMS a decentralized alternative to the domain name system , basically decentralizing the URL [web address] phone book. Another example is this project called OpenCerts. They take records of university degrees and other sorts of certificates, and save them on Ethereum blockchains so if you want to verify someone’s certificate you can scan blockchain, and check that it exists and that it has not yet been revoked. A third example is the DAO [decentralized autonomous organization, a form of a smart contract where the bylaws of an the decentralized organization are embedded into code, bitcoin and Ethereum].
He also mentions private Blockchains being used by institutions as good because it brings in the reluctant.
Vitalik also talked about regulation. He states, “Governments do have a role and one of the roles is regulation. The usual concerns are about cryptocurrency exchanges where the basic idea is to do fundraising for a new project by directly selling tokens on the blockchains. There are debates whether specific kinds of ICOs [initial coin offerings] are legally categorized as securities. The regulators are definitely grappling. They are undecided in many ways. The other area is governments as users of the technology. There has been exploration into central banks issuing digital currencies and using Blockchains for different kinds of government records.”
As for the biggest issues facing Blockchain today, Vitalik believes it is scalability and usability. He explains, “Scalability is a big bottleneck because the Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join, it will not only be more full but we will be competing with everyone for transaction space. It’s already expensive and it will be even five times more expensive because of us. There are pressures keeping people from joining, but improvements in scalability can do a lot in improving that.”
Vitalik proposes moving to networks where every computer on average verifies only a small portion of transactions then it can be done better which would have a modest sacrifice in security.”
He adds, “Scalability would bring costs down by a factor of over 100 for every transaction.”
Security for users is improving. Vitalik states, “There has been a lot of work in tracking. Instead of having a wallet that you hold in a cryptocurrency app with the app being controlled by one computer key — which is risky — you have a smart program using more complicated mechanisms, using multiple keys so a lot of things would have to be hacked at the same time for you to lose your account. There is also the fear that the price will drop to zero, but that’s not a technical issue. I believe people will gain confidence over time.”