‘Bitcoin [BTC]’s scaling problems are related to its software, just like Netscape,’ says Abra CEO
Several proponents of the cryptocurrency space have come out in support of digital assets, including Abra CEO Bill Barhydt, who gave his comments on the future of cryptocurrencies as well as its adoption.
Speaking to Fortune, Barhydt stated that 100 percent of all transactions happen on-chain. He also stated that the smart contracts and the trade platforms hedge away the risks in the crypto world. The CEO added that last year, Abra transacted over a billion dollars, while at the same time customers were not affected. This occurred at the same time when the valuation of the cryptocurrency market was falling by 85 percent.
During the discussion, Bill Barhydt touched upon the concept of stablecoins. In his words,
“We are also planning to launch a native Ether wallet to cater to users. Stablecoins are ERC20 tokens and we aim to support them. Some stablecoins can represent off ramps and on ramps, a marker in the field of cryptocurrencies.”
According to Barhydt, interest in cryptocurrencies has spread across India, Indonesia, Argentina, and Venezuela. Barhydt also drew parallels between Netscape’s scaling problems and the scaling problems that bitcoin currently suffers. He said,
“The challenges for bitcoin to scale are software problems.”
Barhydt went on to give his opinion on the recently launched JPM Coin, calling it a ‘complete waste of time”. The Abra official said,
“I think the press got coin reference wrong. The JP Morgan Coin is a misnomer and in my opinion it is just a ledger.”
This point was echoed earlier by Brad Garlinghouse, the CEO of Ripple, who stated that the JPM Coin missed the point. Garlinghouse claimed,
“A bank-issued digital asset can only really efficiently settle between the banks who issued it. Then, two scenarios can play out. Scenario one: all banks around the world put aside competitive and geopolitical differences, adopt the same digital asset, agree on its rules, and harmoniously govern its usage. Fat chance. Scenario two (the more likely scenario): banks not in the issuing group issue their own digital assets with their own sets of rules and governance.”
In an interview with bitcoin Magazine, Ethereum co-founder Vitalik Buterin discussed some of the scaling issues Ethereum is currently dealing with, the rising interest in Ethereum in Asia and his thoughts on the ICO ecosystem in general.
In late May, developers from the Ethereum-based job market platform Ethlance introduced an issue its freelancers were struggling to deal with. Twelve months ago, when the price of Ethereum’s token Ether was around $14, a smart contract to set up a freelancer profile on Ethlance cost less than $1.
As the price of Ether started to surge beyond $250, Ethlance freelancers were required to pay around $8 to set up their profiles. Issues of Ethereum-based decentralized applications (DApps) and the rising fees on Ethereum led the community and supporters of Ethereum to express their concerns over the platform’s scalability.
Discussions on Etheruem’s scaling issues intensified as Buterin’s , conducted in December of 2014, resurfaced, during which he characterized bitcoin’s $0.05 fee as “absurd.” Currently, Ethereum’s average fee is over $1 and its median fee is around $0.05, close to the level Buterin described as absurd.
bitcoin Magazine spoke to Buterin to address some of these scaling issues Ethereum applications are currently dealing with, the rising transaction fees on Ethereum and the ICO ecosystem.
Scaling Issues of Decentralized Applications and How They Can Be Resolved
In regards to the issues that Ethlance and other DApp developers are facing, Buterin explained, “There are a lot of applications and contracts even now that are being built inefficiently. One major example is that there are a lot of applications that make one separate contract for each user which means that for every single user, it adds several kilobytes of data that cost a few million gas.”
Instead, Buterin explained that the same logic or contract is not required to be copied onto each other and replicated tens of thousands of times. There are more efficient ways to process smart contracts that can significantly reduce gas costs for users. He noted that by implementing efficient smart contracts, users can save anywhere from 50 to 90 percent in gas costs.
According to Buterin, the Ethereum Foundation and its development team recently asked writers to reduce their gas prices and some of them have agreed to do so to ensure that users are not required to spend upwards of $8 per smart contract. However, these solutions can only last for the short and midterm. Buterin explained that, in the long run, the only way to maintain low gas or transaction fees is to scale the entire Ethereum network and blockchain proportionally as it grows in size.
Another long-term solution or development plan the Ethereum Foundation is looking into is the possibility of switching the consensus protocol of Ethereum from Proof of Work (PoW) to Proof of Stake (PoS).
As it did after the execution of the DAO hard fork, which resulted in the creation of Ethereum Classic, another major hard fork could lead to another network split. Ethereum Classic is currently the fifth largest cryptocurrency in the world.
Buterin recognized that there are some members of the community that are concerned over the possibility of a split chain.
“I feel like recently, most of the people that are really against PoS have moved over to Ethereum Classic, so I’m not really sure if that substantial of a community will want to make another fork or split of Ethereum once the Casper switch happens. That’s just my instinct,” said Buterin.
In terms of development of the overall Ethereum ecosystem, progress has been slow but steady. “A lot of the things that we’ve wanted to do around Metropolis, privacy, proof of stake, Serenity, scaling, sharding, all of those things have been taking more time that we had expected,” Buterin admitted, “but I also think that the results that we’ve been moving towards are much better than we thought that we would get.”
He mentioned, as an example, that over the past two or three years, there have been improvements in protocol security that they hadn’t foreseen and that are of great benefit. “I think the end result of a lot of our work and a lot of our research is much stronger than it would have been two years ago.”
Ethereum Demand on the Rise in Asia
South Korea has become the largest Ethereum exchange market in the world with a 19 percent market share, surpassing the U.S. and China in terms of daily trading volume. China, within a few days of its exchanges for Ethereum, became a contender for top spot in market share.
Ethereum is being actively developed by educational institutions such as universities and government agencies including the Chinese Royal Mint. Recently, the People’s Bank of China stated that Ethereum is heading in the right direction, validating the network and project. As bitcoin Magazine’s China-based journalist Bradley Fink previously , some of the largest companies in China, including Alipay and Peking University, are actively investing in the potential of the Ethereum protocol.
Furthermore, the Enterprise Ethereum Alliance (EEA), connecting Fortune 500 enterprises, startups, academics and technology vendors with Ethereum, recently announced its expansion into China with a new office in Hangzhou. It will focus on providing Ethereum-based infrastructure to ensure Chinese enterprise can meet domestic market needs.
“There definitely is a fairly large Chinese Ethereum community and there are several companies based in Shanghai and Hangzhou that have been working on Ethereum applications for a couple of years. There has been increasing amount of interest in the technology and the platform. In general, it is continuing to grow,” said Buterin.
He noted that while the Chinese community used to concentrate its interest solely on bitcoin, that has changed. “But more recently, it does seem like more people are starting to look at both bitcoin and Ethereum. The one thing that’s made me feel optimistic over the last year is that there is a lot of interest, not just on the cryptocurrency side and buying ether and holding it, but actually using it to build applications.”
Buterin also explained that developers of Ethereum are trying to match the rising demands and expectations from its investors. In the past week, Ethereum has surged exponentially in market cap, accounting for around 50 percent of bitcoin’s market cap. He noted that the Ethereum Foundation and its developers are working to live up to the expectations of investors and rising demand in regions such as Asia.
“I think the success that Ethereum has seen is definitely putting a lot of pressure on the core developers of the actual protocol of the platform to step up and deliver on the admittedly high expectations that the community has of us,” he said. “That’s an expectation that we’re eager to see if we can match.”
Ethereum-based companies are also coming to the forefront at a time when , creating new opportunities for startups and investors alike.
Buterin was recently appointed as an advisor to the board of , a startup that is aiming to tokenize a WeWork or Regus-type co-working space provider and grant micro-ownership to its investors.
“I’m definitely very interested in all these applications, particularly the semi-financial ones with some components of finance and monetary value but also some components outside of it” said Buterin. “The general idea that we can create this economy where we micro-tokenize and let people have their own micro-ownership, I think that is definitely a very interesting and promising idea.”
Hong kong photo credit: By Diliff – Own work, CC BY 3.0,
Vitalik Buterin photo credit: By Romanpoet – Own work, CC BY-SA 4.0,
Okay bitcoin, is it going to be 4200 or 5200? Part 6 At the moment still bouncing in the 3680/3840 range for more than 2 days now. For the rest there is not much that […]
