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Ethereum<a href="https://yellow.com/asset/eth" rel="noopener noreferrer nofollow">(ETH)</a> co-founder Vitalik Buterin has backed a Bitcoin<a href="https://yellow.com/asset/btc" rel="noopener noreferrer nofollow">(BTC)</a>-inspired scaling design that could shrink persistent payment state and bundle large transaction batches into 128 kB proofs.
<h2 id="key-points">Key Points:</h2>
<blockquote>
 <ul>
 <li>Buterin backed a Bitcoin-inspired UTXO approach for simple Ethereum payments.</li>
 <li>The design could cut persistent storage from 150 gigabytes per billion accounts to about 300 megabytes per billion spent outputs.</li>
 <li>Neither proposal has a launch date, and Ethereum client teams have not committed to implementation.</li>
 </ul>
</blockquote>
<h2 id="ethereum-utxo-design">Ethereum UTXO Design</h2>
Buterin <a href="https://beincrypto.com/ethereum-hyperscale-bitcoin-design-buterin-bitcoiners/" rel="noopener noreferrer nofollow">endorsed</a> the direction in an Aug. 16 X post, crediting Bitcoin developers for Utreexo and describing the approach as part of Ethereum's proposed scaling strategy. The issue is state growth.
Ethereum nodes keep every account record, with each entry using about 100 to 150 bytes and remaining stored even after activity stops. One billion accounts could require up to 150 gigabytes. Inactive accounts still add weight.
Ethereum Foundation researcher Toni Wahrstatter proposed in July using UTXO-style tracking for simple payments, replacing persistent balances with outputs removed after spending. At roughly one-third byte per spent output, one billion would require about 300 megabytes; payments could also cover their own fees.
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<h2 id="vitalik-buterin-outlook">Vitalik Buterin Outlook</h2>
Developer conall.gwei combined that idea with a January Buterin proposal to batch transaction checks into compact proofs, suggesting block builders could publish one 128 kB summary for a large payment batch. Buterin replied, “Bitcoiners deserve a lot of credit for pioneering many of these ideas (see Utreexo).”
Buterin wants Ethereum to support UTXO-style and dynamic account state without forcing every node to carry the same expanding burden. Utreexo verifies coins without retaining the full set, while STARK-based proofs already feature in his Lean Ethereum roadmap. Neither proposal has a launch date.
Criticism came from Cardano<a href="https://yellow.com/asset/ada" rel="noopener noreferrer nofollow">(ADA)</a> co-founder Charles Hoskinson, who said Ethereum was copying Cardano's coin-tracking model after the July proposal. The dispute is secondary. Lower state requirements could help preserve decentralization as payment volume grows.
Markets showed little immediate reaction, with ETH near $1,903, up 1.28% on the day and still below $2,000 after several weeks. Implementation remains the main test. If client teams adopt both ideas, Ethereum could reduce permanent account-state growth without abandoning its flexible account model.
Throughout 2026, Buterin has argued that Ethereum's deeper bottleneck is state and data storage, not only layer-2 capacity. The Foundation also set protocol priorities in February and changed core cryptography this month for quantum resilience.
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Vitalik Buterin Backs Bitcoin Model For 128 KB Ethereum Payment Proofs

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