The announcement from Stripe regarding its launch of a new layer-1 blockchain called Tempo has sparked a considerable debate within the cryptocurrency community. Stripe CEO Patrick Collison revealed the decision in a post on X, stating that “existing blockchains are not optimized” to accommodate the burgeoning usage of stablecoins and cryptocurrency on the Stripe payment platform. This claim has drawn criticism from industry insiders questioning the necessity of creating another blockchain when the issues cited may already be addressed by existing solutions.
Joe Petrich, the head of engineering at the NFT platform Courtyard, voiced his skepticism, remarking, “No one wants another chain.” He emphasized that the challenges identified by Collison have been sufficiently tackled by current blockchain networks, rendering the launch of yet another chain redundant.
Collison defended his position by highlighting the transaction processing demands of Stripe, which can exceed 10,000 transactions per second (TPS) at peak times. In comparison, he pointed out that Bitcoin processes around five TPS and Ethereum approximately 20 TPS, while newer platforms like Base and Solana can reach around 1,000 TPS. However, this assertion did not sit well with some blockchain experts. Mert Mumtaz, CEO of Helius Labs and a staunch advocate of Solana, described Collison’s statement as “hilariously wrong on several dimensions,” asserting that Solana can handle significantly more TPS than the figures Collison provided, with real-time data from Solana Explorer indicating around 3,186 TPS at the time.
While many critics expressed doubts about taking this route, not all responses were negative. Fintopia’s CEO, Steve Milton, argued that Tempo could revolutionize high-scale on-chain payments, providing the essential infrastructure for apps like his to optimize speed, cost-efficiency, and user experience. Additionally, Max Segal, COO at Privy, offered a positive outlook on Tempo’s potential.
Other commentators raised pertinent questions about the choice of creating a layer-1 solution instead of pursuing development as a layer-2 network. Devansh Mehta from the Ethereum Foundation questioned the decision to build a proprietary validator set, arguing that a decentralized and diverse set of validators could be more efficiently outsourced. Leo Lanza, another crypto commentator, echoed this sentiment, proposing that Tempo could benefit from being an Ethereum layer-2 solution, allowing it to harness Ethereum’s advantages in terms of network effects, security, and cost efficiency.
In his response to these concerns, Collison made a case for the practicalities of using fiat-denominated fees for real-world financial applications, contrasting with the token-specific fee structures prevalent in existing blockchains. He expressed optimism that Tempo could facilitate various financial transactions, including payment acceptance, global payouts, remittances, microtransactions, and tokenized deposits.
As the debate continues, the cryptocurrency community watches closely to understand the implications of Stripe’s decision and the potential impact on the broader blockchain ecosystem.
