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Ethereum Will Match Visa In Scale In a 'Couple of Years,' Says Founder (techcrunch.com) 114

Posted by BeauHD from the matter-of-time dept.
Ethereum's founder, Vitalik Buterin, believes that his cryptocurrency has the potential to replace things like credit card networks and gaming servers. He even goes as far to say that Ethereum will replace Visa in "a couple of years," though he later clarified that "ethereum *will have Visa-scale tx capacity*, not that it will 'replace Visa.'" TechCrunch reports: "There's the average person who's already heard of bitcoin and the average person who hasn't," he said. His project itself builds upon that notion by adding more utility to the blockchain, thereby creating something everyone will want to hear about. "Where Ethereum comes from is basically you take the idea of crypto economics and the kinds of economic incentives that keeps things like bitcoin going to create decentralized networks with memory for a whole bunch of applications," he said. "A good blockchain application is something that needs decentralization and some kind of shared memory." That's what he's building and hopes others will build on the Ethereum network.

Right now the network is a bit too slow for most mainstream applications. "Bitcoin is processing a bit less than 3 transactions per second," he said. "Ethereum is doing five a second. Uber gives 12 rides a second. It will take a couple of years for the blockchain to replace Visa." Buterin doesn't think everything should run on the blockchain but many things can. As the technology expands it can grow to replace many services that require parallelization -- that is programs that should run at the same time.
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Ethereum Will Match Visa In Scale In a 'Couple of Years,' Says Founder More

Ethereum Will Match Visa In Scale In a 'Couple of Years,' Says Founder

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  • translation (Score:5, Insightful)

    by Anonymous Coward on Tuesday September 19, 2017 @03:03AM (#55223947)

    Founder is worried that his investment will become worthless if he can't convince people that it's the next big thing.

  • Let me get this straight.. (Score:5, Informative)

    by Anonymous Coward on Tuesday September 19, 2017 @03:21AM (#55223979)

    Ethereum currently does 5 transactions per second.

    Wikipedia tells me VISA can manage up to 56,000 per second - and that was "a couple of years" ago, so it can no doubt manage more than that now.

    So, in "a couple of years" the Ethereum processing is going to scale by a factor of (more than) 11,000?

    If you think that's true then I've got a wonderful Olympic stadium to sell you...

    • In a couple of years Ethereum will say as much bs as much as all the major banks combined.

    • Re: (Score:2)

      by mbkennel ( 97636 )
      Individual large banks do a few thousands of transactions per second (and need higher capacity for holiday and bulk payments hitting in a batch), and there are strict latency rules imposed by the networks (i.e. Visa & MC) for banks to run the transaction through authorization systems and fraud scoring, total latency is well under a second, any individual piece, maybe 25 to 50 ms.

      Some of it runs on z/OS mainframes, the rest, on-premise unix servers.

  • He did not say that (Score:5, Informative)

    by Interfacer ( 560564 ) on Tuesday September 19, 2017 @03:48AM (#55224043)

    He was misquoted, and in fact has explicitly said so on twitter that he was misquoted and provided his original quote:
    http://www.globalcryptopress.c... [globalcryptopress.com]

  • Vitalik Buterin is a modern age genius (Score:5, Funny)

    by Anonymous Coward on Tuesday September 19, 2017 @03:49AM (#55224045)

    Even though this sounds outlandish, there is no doubt in my mind that if he says it, it will be true. Vitalik is a genius comparable to the likes of Newton, Leibniz, Lagrange, and so on. Years ago when bitcoin was in its infancy slashdotters were very eager to shoot it down as a non-starter that will never be worth collectively more than a couple thousand dollars. If anything, there is a very strong trend indicating that if something is laughed at at slashdot, it will be a great success.

    • Re: (Score:2)

      by Bongo ( 13261 )

      Aren't there also technologies which had great promise but didn't live up to it because there was another innovation which was needed but which didn't appear for a few decades? So the big question isn't the "if" but the "when".

    • LOL - your post made me laugh so much I lost a bit of my lunch onto my monitor. You'll go far, son.

    • Even though this sounds outlandish, there is no doubt in my mind that if he says it, it will be true. Vitalik is a genius comparable to the likes of Newton, Leibniz, Lagrange, and so on. Years ago when bitcoin was in its infancy slashdotters were very eager to shoot it down as a non-starter that will never be worth collectively more than a couple thousand dollars. If anything, there is a very strong trend indicating that if something is laughed at at slashdot, it will be a great success.

      It'll blast off as soon as crypto currencies become widely used by common people for everyday transactions, like buying their groceries, paying their mortgage, or filling up their car. It'll take off so fast everyone's heads will never stop spinning. Until then, everything is speculation. Bitcoin, Etherium, and the like may be superseded by yet more superior crypto currencies, maybe governments will continue embracing, maybe they will become the most secure way of transacting business, or maybe they will

      • You appear to think that there is a need for cryptocurrency among common people. They're used to dealing in dollars or Euros or whatever, and their current systems work pretty well. Most people don't care about their financial transactions being traceable, and if they do wouldn't be convinced that cryptocurrencies will do a better job of providing privacy. Most people aren't going to know what to do with a private key. In the US, for example, I have to deal with the government in dollars, and if the co

  • Faster Blocks (Score:5, Interesting)

    by mentil ( 1748130 ) on Tuesday September 19, 2017 @04:46AM (#55224143)

    I was actually thinking about this the other day. I'm wondering, instead of a new block being generated every 10 minutes or so, with a 1-coin reward worth ~$3000 being given to each person who creates a new block, why aren't new blocks generated every couple seconds, with a say 0.0005-coin reward worth ~$1? Yeah I know the supply of coins determines the price so that 0.005 coins could be worth $3000... but it wouldn't, because a new block is made every few seconds. Regardless of block size, the issue is that more transactions per hour means more blockchain growth per hour. If the global economy were to run on a single blockchain... that'd be a lot of data, particularly to a computer not holding a rack of HDDs and connected to the internet via fiber, with serious monetary investments to keep up with growth. Either a way needs to be found to cull old/irrelevant data, or cryptocurrency maintainers will have to choose between two options: only large institutions will be able to afford to track the blockchain; or low transaction volume will keep cryptocurrencies a financial novelty like they are now. Increasing adoption and transaction volume also requires getting the transaction charge below what Visa etc. are charging.

    • Re:Faster Blocks (Score:5, Informative)

      by Anonymous Coward on Tuesday September 19, 2017 @07:02AM (#55224355)

      The 10 minute delay for new block creation is to prevent blockchain forking so work isn't done on orphaned blocks, it's partly to correct for network latency. It is mostly a matter of hashing efficiency and also preventing the larger pools from forking the chain constantly. Ethereum corrects for this by allowing these blocks to be part of the reward, they call these 'uncles'. I suspect in the long term the 'uncle' concept will be Ethereum's down fall.

    • Re: (Score:1)

      by Anonymous Coward

      The issue is block propagation. When a miner mines a block, it has to propagate through the network so that other miners can start working on mining the next block on top of that. If it doesn't propagate quickly, they'll finish their own block, so now you have two or even more "heads" of the chain. Sooner or later a miner will build a block on top of one of these heads, depending on which he received first. Now that is the longest chain, and the blockchain is reorganized, making all the other "orphan" block

    • > Either a way needs to be found to cull old/irrelevant data

      Which isn't terribly difficult. You choose a balance between history length and security. Periodically you have a checkpoint, and you accept the point-in-time state of the ledger as your new root state. Some people can keep several (or all) checkpoints if they wish, but so long as the majority agree on the most recent checkpoint, it's all good. 'Blockchain' people aren't interested in anything that doesn't go back to the genesis block, so it

  • Hype (Score:5, Interesting)

    by LightningBolt! ( 664763 ) <lightningboltlig ... NO@SPAMyahoo.com> on Tuesday September 19, 2017 @04:49AM (#55224153) Homepage

    It's really starting to feel like the year 2000 again with the kind of hubris, absurd valuation claims, etc. coming from the tech world in general. One of my favorites: https://www.wired.com/1999/09/... [wired.com]

    • Re:Hype (Score:4, Insightful)

      by geekmux ( 1040042 ) on Tuesday September 19, 2017 @07:35AM (#55224435)

      It's really starting to feel like the year 2000 again with the kind of hubris, absurd valuation claims, etc. coming from the tech world in general. One of my favorites: https://www.wired.com/1999/09/... [wired.com]

      It doesn't matter whether or not we learn about history.

      Our timeless ability to be ignorant and stupid all but guarantees we will repeat it.

  • Iota's Tangle already scales (Score:1)

    by Anonymous Coward

    Iota's quantum-proof protocol known as the Tangle already has the scalability that Vitalik is hopelessly pursuing with a blockchain protocol.

    Iota also happens to have zero transaction fees, which is something Ethereum will never be able to achieve.

    While I don't think blockchains will ever go completely extinct, I do believe that they will be outmoded and viewed as a curious relic of the past, reserved only for very specific use-cases.

  • ... are more realistic:

    "Ethereum isn't safe or scalable. It is immature experimental tech. Don't rely on it for mission critical apps unless absolutely necessary!"

    https://medium.com/@Vlad_Zamfi... [medium.com]

  • Challenges Beyond the Technical (Score:5, Interesting)

    by ytene ( 4376651 ) on Tuesday September 19, 2017 @07:15AM (#55224395)
    There is absolutely no doubt that use of blockchain technologies will continue to expand as more and more people develop solutions that use it. However, there is a world of difference between having the technical means to handle transactions in the volumes discussed, but this is entirely distinct from actually being able to compete with an institution like VISA, for non-technical reasons...

    The global card payment processing infrastructure generates literally billions and billions of dollars of revenues for Mastercard, VISA, plus all banks. The resultant and incredible profits are further enhanced by insane "transaction processing fees" when purchases are made in any currency other than the card's default.

    Do we think for a moment that the vast, established financial services industry will simply roll over and allow Bitcoin or Ethereum to displace it? No. This is why we see all of these grossly exaggerated claims regarding crypto-currencies - that it is used only by drug dealers, paedophiles and terrorists. Of course, these arguments conveniently forget the fact that actual paper cash is even more anonymous than crypto-currency will ever be, yet we don't hear [most] of these organisations clamouring for cash to be withdrawn. [ Most: VISA have been pushing this for a while now].

    As a crypto-currency becomes established and generates the infrastructure to actually make a dent on the current cartel of big banks, expect to see horror stories regarding the criminal use of it, expect to see all sorts of legislation to outlaw it being proposed. Expect to see scandals and stories like the Mt Gox exchange hack being trumpeted as reasons that cryptocurrency should be doomed.

    On balance, I think the distributed ledger concept has a lot to commend it - it makes the financial infrastructure of the world much more robust - but the biggest challenge it faces will come from the entrenched players in this market - the big banks. Which, by the way, are already developing their own, proprietary and "closed" blockchain technologies... Fancy that...

    • ...and indeed national banks are doing the same development. Having a Bank of England backed crypto-currency is pretty much going to be the same as having pounds in your pocket, or pounds lodged in a retail bank + a plastic card. If Ethereum became the technology of choice for any national bank, it could indeed see vast transaction volumes.

      However... and there's a big but here. The reason current crypto currencies are working is because they're decentralised and international. Once they become centralised,

    • Unless a crypto-currency is created to let you borrow money you don't yet have, it will never replace credit cards.

      • Re: (Score:2)

        by ytene ( 4376651 )
        Agreed, but I think we're maybe looking at this from two very different perspectives...

        First, you rightly point out that both traditional banks and credit card companies offer credit. In order to do this, those companies need to have either a full banking licence, or something very similar to one, or they will simply not be permitted to operate in any major, well-developed economy.

        On the other hand, we're also talking about a simple transaction in which funds from one currency are translated in to ano

  • standard procedure (Score:4, Interesting)

    by v1 ( 525388 ) on Tuesday September 19, 2017 @08:04AM (#55224497) Homepage Journal

    Name a business that doesn't tell their investors that the business is growing and that there's a big boom in growth right around the corner?

    This is just SOP for any startup, and should be ignored. Judging future performance of any product should be done by careful examination of the product's history and of current and developing market conditions. There will be sudden surges here and there from time to time, but unexpected plunges will occur just as often, (if not moreso) and so should never be expected and only very carefully anticipated. And definitely not on the word of someone with a hugely vested interest in your investing further.

    This has no more merit than those random spam emails most of us have received from someone with a "market tip" about some stock that's going to explode in the next few days and you're advised to rush out and buy some.

  • He's Appealing to the Greater Fool (Score:1)

    by Anonymous Coward

    https://en.wikipedia.org/wiki/Greater_fool_theory

    "The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants.[1] A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.[2][3][4] In other words, one may pay a price that seems "foolishly" high because one may rationally have the expectation that the item can be resold to a "greater

  • VISA doesn't have to wait for a transaction to propagate in order to do the next one. Blockchains do.

    VISA allows you to overdraw your account because inherently that's what they want you to do (Credit) while with Blockchains, you can't spend money you don't have (Debit).

    If all VISA transactions were distributed (they somewhat are but are geographically centralized) and converted to direct Debit and eat the transactions that would put a customer in an overdrawn account, they would have nowhere the capacity t

    • > That takes about 2-3 days to "propagate" so a VISA card would allow you to make 1 transaction every 2-3 days. Blockchains allow you to do 1 transaction every ~10 minutes.

      That's comparing apples to oranges.

      Under those circumstances, VISA would allow you to do multiple transactions based on your queried bank balance with a 2-3 day delay on use of newly deposited funds. Per person.

      Bitcoin, the most famous blockchain, is limited to a few TPS for ALL users.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      If all VISA transactions were distributed (they somewhat are but are geographically centralized) and converted to direct Debit and eat the transactions that would put a customer in an overdrawn account, they would have nowhere the capacity they do today. Every time you do a transaction, they would have to query your bank whether you have enough money, then they would allow your transaction and post it to your bank account as if you wrote a check. That takes about 2-3 days to "propagate" so a VISA card would

      • Re: (Score:2)

        by guruevi ( 827432 )

        Yes, I understand that, I was pointing out that with Blockchains, the entire transaction including settlement has to happen at the same time. If VISA were to settle at every transaction AND eat the transactions that would put you in overdraft, it wouldn't be nearly as fast and efficient.

        With VISA, a bank basically tells VISA you have the money or credit, but if you don't, they simply give you a negative balance and the merchant is guaranteed to get the money. It's very evident when you do overseas transacti

        • "With VISA, a bank basically tells VISA you have the money or credit, but if you don't, they simply give you a negative balance and the merchant is guaranteed to get the money."

          That would depend on how the bank has implemented authorisation processing. Maybe U.S. banks aren't able to do real-time accurate authorisations, but that isn't a limitation in Visa/Mastercard's side. My bank seems to do it real-time. For example I recently had a transaction declined (while filling up at a gas/petrol station), Itrans

  • It's not possible unless they fix the things that prevents it from being a serious contender as a payment system: the value of the coins needs to be a lot less variable, and there needs to be some sort of recourse if a transaction goes wrong.

  • Why do none of these stories contain any information about the real reason he's so confident in his assertions?
    https://www.coindesk.com/ether... [coindesk.com]
    https://www.coindesk.com/ether... [coindesk.com]
    https://github.com/ethereum/wi... [github.com]

    Etherium is going to move to a whole new way of handling transactions (proof of stake) that will blow the current methods out of the water...if it works safely. Proof of work is not particularly scalable, but proof of stake is.

    As you can see from these coindesk news stories, this planned transition is

  • Give the number of people in China, and that China is #2 in GDP and #1 in GDP PPP, AND that China is blocking cryptocurrency... the assertion "Ethereum will replace Visa in "a couple of years," is not possible. Ok, so he modified the statement to mean transaction capacity.
    So what? If the largest economy in the World won't use it, and the Largest Bank in the US won't use is (see Jamie Dimon's quote: https://www.cnbc.com/2017/09/1... [cnbc.com] ), "founder" statements are just hot air.

  • How the heck are credit card networks and gaming servers related?

  • Kellyanne has amazing insights on how to effectively communicate the administration's message, and Ethereum will rival Visa.
    -Sean Spicer
  • Nice try.

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