Ethereum will have transaction chops of Visa in ‘a couple of years’, founder claims

Blockchains might be a bit slow today, but one of Ethereum’s founders predicts that in “a couple of years” the popular network will have the same transaction capacity scale as Visa.

Speaking at TechCrunch’s Disrupt San Francisco on Monday, Vitalik Buterin said Bitcoin can process less than three transactions per second, Ethereum five and Uber 12, but in a “couple of years” his brainchild will match Visa’s speed.

Clarifying, he said Ethereum could complement Visa for certain applications that would benefit from decentralisation and a shared memory. He gave the example of running StarCraft one day.

Jacob Eberhardt, a computer science PhD student studying the scalability of blockchains at the Technical University of Berlin, told The Register that the likelihood of scaling was much worse last year, but progress on new projects since, indeed makes it seem possible… some day.

“I just don’t know when it will happen,” he said.

Imagine that you want to make ten £10 transfers to a second party. The problem with Ethereum is that when two parties make a transaction on the network, all the other nodes have to validate it. Depending on the number of nodes, that process can be really, really slow.

There are ongoing initiatives such as zk-SNARK, Plasma and Raiden Network that are making strides tackling scalability, Eberhardt said.

The “off-chain” payment channel Raiden Network, for example, launched a testnet and developer preview last week. Instead of all nodes validating every single transaction on Ethereum, nodes would only have to validate two transactions, as the Raiden Network could handle the rest of the work.

Users would lock funds into Ethereum and set up up an intermediary to handle all their off-chain Raiden transactions. When they were ready for Ethereum funds to be distributed, the two parties would give their digital signatures as approval of the Raiden transactions. The blockchain nodes would only need to validate these single signatures.

It brings “almost the same” security as computing all the intermediate transactions on the blockchain, Eberhardt said, but the real tradeoff is you have to sacrifice the liquidity of your funds by locking them in. ®

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