Ethereum Fixes What Bitcoin Can’t: A Game Changer?

Ethereum Fixes What Bitcoin Can’t: A Game Changer for Blockchain Scalability?

For years, explaining Bitcoin to newcomers involved emphasizing its foundational principles: simplicity, security, and immutability. Ten-minute block times, limited block size, universal verification – a bedrock of trust. However, this very design creates scalability challenges. As demand increases, block space tightens, fees surge, and users demand solutions beyond the base layer. Now, Ethereum is making a bold claim: it’s solving the blockchain trilemma. Vitalik Buterin argues that pairing PeerDAS on mainnet with increasingly performant zkEVMs, coupled with distributed block building, will unlock a new era of scalability and functionality. This isn’t just another upgrade; it’s a potential paradigm shift, and one that Bitcoiners should pay close attention to.

The Blockchain Trilemma and Ethereum’s Proposed Solution

The “blockchain trilemma” posits that a blockchain can only achieve two out of three desirable properties: decentralization, security, and scalability. Bitcoin prioritizes decentralization and security, often at the expense of scalability. Ethereum, historically, has struggled with all three, but its recent developments aim to address this head-on. Buterin’s roadmap centers around three key pillars:

• PeerDAS (Proportional Data Availability Sampling): A method for ensuring data availability without requiring every node to download every byte of data.
• zkEVMs (Zero-Knowledge Ethereum Virtual Machines): Allowing for the verification of transactions without re-executing them, significantly increasing throughput.
• Distributed Block Building: Preventing a small group of builders from controlling transaction inclusion, enhancing decentralization.

PeerDAS: Scaling Data Availability

Activated on December 3, 2025, with the Fusaka upgrade, PeerDAS tackles the data availability problem. Instead of every node downloading all rollup data, nodes subscribe to a small slice and verify enough random pieces to ensure the whole dataset is available. This utilizes erasure coding, reconstructing missing pieces from the existing data. Essentially, Ethereum is attempting to increase throughput without exponentially increasing the resource demands on regular nodes. Ethereum.org explains that a default node now receives roughly one-eighth of the original blob data, listening to eight of 128 subnets.

This is crucial because bandwidth is a silent killer of decentralization. High synchronization costs discourage home operators, leading to centralization. Fusaka also introduced blob parameter-only forks – preprogrammed mini-upgrades that adjust blob targets and maximums without full hard forks. This allows Ethereum to incrementally increase blob capacity as the network proves its ability to handle it. As of January 7, 2026, BPO2 is set to further raise the target and max blob sizes, treating blob throughput as a tunable parameter.

zkEVMs: The Future of Validation

While PeerDAS is live, the zkEVM claim is about what’s coming next. The Ethereum Foundation’s December 2025 update signaled a shift in priorities: security is now paramount. Milestones are set for 2026, targeting 100-bit provable security by May and 128-bit by the end of the year, alongside proof-size caps. This is a fundamental difference from Bitcoin’s validation process.

Bitcoin relies on miners hashing and nodes verifying, rejecting invalid blocks. Ethereum is moving towards a system where validators verify succinct proofs instead of replaying every transaction. This shifts the trust model, relying more on cryptography, implementation correctness, and the economics of proof production. Buterin envisions 2026 as a year of significant gas limit increases driven by these upgrades, with the first opportunities to run zkEVM nodes. He anticipates 2027-2030 as the period where zkEVM validation becomes the primary method for block validation.

Why Bitcoin Should Care

Bitcoin doesn’t need to compete on throughput. Its strength lies in its decentralization, conservative design, and resistance to change. However, Ethereum’s advancements challenge Bitcoin’s position as the only “credibly neutral” settlement layer. If Ethereum can successfully scale data availability while maintaining reasonable node requirements and secure proof-based validation, it presents a viable alternative.

This impacts Bitcoin in three key ways:

1. Narrative Premium on Block Space: Bitcoin fees spike with demand, a natural market signal. Ethereum aims for a more stable, affordable experience through expanded blob capacity. If successful, Bitcoin’s block space will remain premium, potentially narrowing its use cases to high-value transfers and long-term custody.
2. Decentralized Rails for Everything Else: Many crypto applications – tokenized dollars, on-chain equity, supply chain settlement – depend on cost and throughput. Ethereum’s scaling solutions, like Base, are already demonstrating significant fee reductions. This could attract capital and developers away from Bitcoin for general-purpose applications.
3. New Centralization Battleground: Bitcoin’s risks center on mining pools and ASIC supply chains. Ethereum’s risks are shifting to prover markets and block building, as acknowledged by Buterin’s emphasis on distributed block building and inclusion lists. Scaling often shifts power dynamics, and maintaining neutrality is a constant challenge.

Ethereum’s Roadmap: Potential Scenarios

The impact on Bitcoin depends on how Ethereum’s roadmap unfolds. Here are three potential scenarios:

• Scenario 1: Slow and Careful: PeerDAS expands incrementally, zkEVM security takes time, and proof-based validation remains optional. Ethereum improves the rollup experience, becoming a scalable settlement network outside of Bitcoin. Bitcoin remains the conservative monetary base, with competition remaining ideological.
• Scenario 2: Demand-Driven Growth: Rollups rapidly consume blob capacity, usage remains high after each BPO step, and Ethereum aggressively increases capacity. Ethereum consolidates the “cheap crypto UX” narrative, becoming the preferred settlement network. Bitcoin’s L2 ecosystem faces pressure to offer a similar experience while maintaining its core principles.
• Scenario 3: zk-Proofs Become Standard: Ethereum hits its security targets, proof verification becomes the default, and higher gas limits become feasible. Ethereum’s claim to high-bandwidth decentralization becomes harder to dismiss. Bitcoin’s differentiation focuses on simplicity, immutability, and monetary policy. The conversation shifts to two distinct base layers with different philosophies.

What Users Actually Feel

Most users don’t care about the technical details of data availability sampling. They want affordable, reliable transactions. Ethereum’s promise is a decentralized base layer with a user experience comparable to traditional app fees, not settlement fees. This doesn’t kill Bitcoin; it clarifies its role. Bitcoin becomes the trusted exit point from the broader crypto ecosystem, while Ethereum aims to scale the ecosystem itself.

However, Ethereum’s path is more complex, requiring sophisticated cryptography, markets for block building and proving, and constant vigilance against centralization. Bitcoin’s risk remains its inherent limitations – slow, scarce, and expensive during peak demand. The industry continues to build layers on top of Bitcoin, seeking to overcome these limitations.

Bottom Line

Buterin’s “trilemma solved” claim is a headline, but the substance is a concrete roadmap with deployed code and a strong focus on security. Bitcoin should care because a scalable, decentralized Ethereum weakens the argument for Bitcoin as the only credible neutral settlement layer. However, Bitcoin should remain calm. Its value proposition isn’t throughput; it’s restraint, predictability, and a base layer that remains understandable under stress. The more Ethereum evolves into a high-bandwidth settlement fabric, the more Bitcoin’s role as a conservative monetary anchor appears intentional and valuable. This competition is healthy, forcing both networks to define and defend their respective visions of trust and decentralization.

Mentioned in this article

Ethereum Bitcoin Vitalik Buterin