Ethereum co-founder Vitalik Buterin believes the blockchain-based platform has the potential to rival financial institutions like Visa in scale. Before it can, however, it needs to increase the speed with which it can process transactions.
TAKING ON FINANCIAL INSTITUTIONS
Ethereum co-founder Vitalik Buterin is optimistic about the future of his blockchain platform, sharing his predictions during a talk with AngelList founder Naval Ravikant at TechCrunch’s Disrupt SF 2017 event on September 18.
Despite the growing popularity of Ethereum and other technologies like it, a large majority of people still don’t know what blockchain is or what it does. However, once the technology does reach the mainstream, Buterin believes it will be able to take business away from major credit card companies. He sees this shift potentially taking place in the next “couple of years.”
Before Ethereum can compete with the likes of Visa and MasterCard, though, the platform will need to speed up. “Bitcoin is processing a bit less than 3 transactions per second,” Buterin explained to Ravikant. “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.”
According to Business Insider, the co-founder said he expects to see low-security financial prototypes revealed within the next year, which may signal the beginning of Ethereum’s ability to disrupt mainstream finance. That said, a few more years will be needed before their effectiveness can be proven.
FROM FINANCE TO CLOUD COMPUTING
Buterin’s thoughts on the capabilities of blockchain extend beyond finance and into the world of cloud computing. While he believes Ethereum has a solid chance at changing the financial world, Buterin is less optimistic about its effect on cloud services, such as Amazon Web Services (AWS).
Those services are often used by private companies to host proprietary content (think Netflix’s data), and convincing them of the security of Ethereum’s decentralized network could be difficult. “In general, there’s always going to be this large set of applications where decentralized approaches don’t work that well,” Buterin said.
Expect Ethereum to continue to be embraced by other corporations, however. In the last two months alone, a Russian airline used Ethereum to issue tickets, and Microsoft released their own Ethereum-based protocol. The platform may not impact every aspect of society, but it’s certainly checking quite a few off the list.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.