CZ Says Blockchain Scalability Problem Already Largely Solved, but Vitalik Disagrees

Changpeng Zhao (aka "CZ"), Co-Founder and CEO of Binance, said on Wednesday (August 21) that although he likes Vitalik Buterin and Ethereum, blockchain scalability is "a largely solved problem for newer blockchains (for now). However, Vitalik disagrees with this view.

CZ's comments about blockchain scalability came in response to what Vitalik said on this subject in an interview with The Star, Canada's largest online news outlet, which was published on Monday (August 19).

During this interview, Vitalik was asked what are "the roadblocks to more widespread adoption of cryptocurrencies." He replied:

"Scalability is a big bottleneck because the Ethereum blockchain is almost full. If youre 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. Its already expensive and it will be even five times more expensive because of us. There is pressure keeping people from joining, but improvements in scalability can do a lot in improving that."

He then explained how scalability could be improved:

"The main problem with the current blockchain is this idea that every computer has to verify every transaction. If we can move to networks where every computer on average verifies only a small portion of transactions then it can be done better."

Then, on Wednesday, CZ sent out the following tweet:

I like Vitalik & ETH, but speed & capacity was a problem a year ago, but now a largely solved problem for newer blockchains (for now). We need to increase real applications that people actually use, so that we hit the new capacity issues/limits again. Focus on applications.

— CZ Binance (@cz_binance) August 21, 2019

Within a couple of hours, Vitalik replied to CZ's tweet, saying that he disagreed with this view:

It's not solved at all. Even the newer semi-centralized blockchains have TPS in the hundreds; AFAIK EOS has already had scalability bottleneck issues.

— Vitalik Non-giver of Ether (@VitalikButerin) August 21, 2019

Vitalik then went on to say that he was getting "more and more pessimistic" about layer 2 scalability solutions (such as Raiden Network):

I have been getting more and more pessimistic about off-chain-data L2s over time. @VladZamfir is right; they're just hard to build, require too much application-layer reasoning about incentives, and hard to generalize.

— Vitalik Non-giver of Ether (@VitalikButerin) August 21, 2019

Another person who replied to CZ's tweet was Larry Sermak, The Block's Director of Research and Analysis, who s ...

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Tags: Blockchain, Scalability, Vitalik, Changpeng Zhao, Vitalik Buterin, Binance, Ethereum