Vitalik Buterin Calls on Ethereum Community to Strengthen Its Ability to Handle Cashless Transactions

Vitalik Buterin, Ethereum's co-founder, called on the blockchain community to strengthen Ethereum's ability to handle cashless transactions and provide better privacy.

Vitalik Buterin, a co-founder of Ethereum, has called on the blockchain community to strengthen the cryptocurrency’s ability to handle cashless transactions and provide better privacy.

Buterin responded to a thread about Scandinavian countries backing away from a cashless society in a May 25, 2024 X post, attributing the weakness to their centralized system. He noted that Ethereum could serve as a backup for carrying out digital payments.

"We have the ability to build very strong solutions, but they either rely on hardware that can be trusted or later stages of development to prevent double-spending," Buterin said in a post on X.

His words highlight problems with the digital payment systems that led Sweden and Norway to halt plans for becoming completely cashless. As reported by The Guardian on October 30, 2024, attacks on the internet and other hybrid tactics by groups supporting Russia led to this decision. Now, the Nordic nations see cash as an important backup when digital solutions do not work.

Buterin pointed out that Ethereum should handle these problems. "We have the ability to create robust solutions, yet these depend on safe hardware or steps taken later to prevent double-spending," Buterin said in a post on X. His words point to Ethereum’s ability to help struggling digital payment systems.

The role of Ethereum in supporting digital payment stability

The Nordic countries are stepping away from cashless systems due to their dependence on a single digital system. According to the Guardian, the entire Swedish payment network could be halted by a targeted attack during disruptions in electricity or communication. Because of this, people are once again paying more attention to keeping cash as a safety net.

Buterin stated in his X thread that the decentralized nature of Ethereum was the answer. Because Ethereum is not centralized, it is able to process transactions reliably, ensuring cashless societies are protected. The work of individuals such as Rohan Grey, who investigate the impact that blockchain technology has on digital currency, were brought to the attention of lawmaker Vara.

When it comes to blockchain settlements, there is still an issue with duplicate spending. Investopedia’s web result explains that Bitcoin makes it impossible for someone to spend a coin twice by using timestamps, proof-of-work and a network of nodes. Buterin mentioned that, like Bitcoin, Ethereum also needs either strong hardware or rules to ensure transactions are secure.

"We also need better privacy if we want it to be a truly useful backup in times of crisis," Buterin added.

According to a response on Ethereum Stack Exchange, zero-knowledge blockchains like zkSync do not provide full privacy, as their data is still public. Buterin pointed out that Ethereum needs privacy features to stand as a reliable option to cash when there is a crisis.

Creating a Strong and Stable Blockchain Future

Buerin’s suggestion is in line with the wider discussions happening on the X thread. In his reply to Buterin, David Manheim wanted to know how private transfers without relying on the internet were developing. Buterin pointed out that possible solutions are restricted by issues like the need for hardware that can be trusted.

Nordic nations are currently investigating ways to combine digital and cash transactions. Sweden is looking into introducing an “e-krona” as a digital version of cash, but the government must decide on it. Ethereum may be part of this model because it offers a secure and decentralized way to handle digital transactions.

According to the Bank for International Settlements, Singapore and others are examining blockchain for digital currency purposes. Ethereum’s decentralized setup might solve issues found in cashless systems everywhere.

The issues of privacy and the ability to use these services remain. Writing for Money on the Left, Rohan Grey discusses the importance of making digital money systems accessible. Buterin’s goal with Ethereum is to simplify the blockchain technology to the point where it may be used by people living in a cashless society.

It is clear to see how Ethereum can help with weak digital systems. Buterin’s support, inspired by the Nordic model, makes Ethereum a crucial part of the future of robust, decentralized payment systems