This Is The Hardest Problem In Crypto According To Binance CZ.
Many huge event happened and is going to happen in September 2022. From the inflation report, to the Merge where Ethereum shift from PoW to PoS system, the Fed interest rate report and the Cardano Vasil Hard Fork. Slowly but surely, many changes are happening in the crypto space for the betterment of the ecosystem.
Although there are many changes, there are still many problems that are still need to be solved in the crypto world. One of the biggest analyst and news Youtube channel, Crypto Banter sat down with the CEO of Binance, CZ to talk about what other challenges there are right now.
Is Layer 1 Still A Huge Problem?
The base level of a blockchain is called Layer-1 which acts as the ecosystem main network. So the Layer-1 blockchains will validate and execute transactions without needing support from other network and use their own tokens as transaction fees.
Ethereum (ETH), Bitcoin (BTC), and Solana are examples of Layer-1 in the blockchain industry.
When asked if the Layer-1 problem has been solved or not, CZ stated that they are still far from solving it.
“No, I don’t think we solved the Layer-1 problem. It’s like the internet. It’s like the cable company, have we solve the cable company’s problem? I don’t think so, not even today. We can still get faster speed, we can get 10x faster… We still don’t have full 4K, 5K, 40K, 400K, Hi-Fidelity virtual environment. All these stuff we still don’t have. The capacity of the infrastructure can always increase.. In technology we are never done”
He then continued that, it will still take time for people to improve scalability and efficiency of the Layer-1 problems.
“I think today, I don’t see one blockchain solving all layer 1 problem. To be honest, if Layer 1 is really good, we shouldn’t need a Layer-2. We should be handling like 100 million transactions per second. Then we probably wouldn’t need Layer-2 for a while. And we are no where close to that, even the BNB chain, they are not there.”
Layer-2 refers to a network or technology that operates on top of the underlying blockchain protocol to increase its scalability and efficiency. One of the most common type of Layer-2 solutions is rollup.
Polygon and Immutable X are examples of layer-2 used on the Ethereum blockchain network.
The Hardest Problem In Crypto Right Now
CZ was also asked what is the hardest problem right now in crypto. He believes that it is the wallet because it is the main blocker for mass adoption of crypto. He explained the reasons why,
“I would chase the hardest problem which today I think is the wallet.. I think that is the main blocker for mass adoption, for DeFi adoptions. So today, DeFi protocols are fine. They are very easy to use. You connect your wallet for people who knows how to use their wallet. Then you just trade, it’s very simple, no KYC, very simple.”
He continued that, wallets are too technical for many people right now that is it hard for them to adopt it properly.
“But today most people cannot store their private keys securely. The wallets require them to be technical. Your computer cannot get a virus, if your computer gets a virus, there’s all kinds of problems that will happen. You will lose your money. If you lose your computer, you have to have a backup and that backup needs to be encrypted. Most people don’t know how to do that properly.”
These are the reasons why people still prefer the easier way of using email and password and calling customer support for help.
“For these reasons, most people today still prefer use email, password and call customer support. they still want to use a centralised exchange. If i have no financial pressure, I would want to solve the most difficult problem that is blocking adoption. That would be the problem I would try to solve”