Jez San is CEO of FunFair Technologies, an ethereum-powered casino platform. A vocal supporter and critic of blockchain technologies, San was also a pioneer in real-time, 3D games.
The following article is an exclusive contribution to CoinDesk's 2017 in Review series.
As a long time investor in bitcoin and cryptocurrencies, 2017 has been remarkable. But it's important to remember, this is really just the beginning.
Despite the valuations, major protocols remain deficient in delivering value to users. Bitcoin with it's high fees and slow transaction times is hardly suitable for payments – spending the same fee whether you buy a coffee or send $100,000 is a joke and the promise of scaling solutions such as the Lightning Network hasn’t been fulfilled.
Suffice to say, its new positioning as a store of value is precarious, even if, judging by the huge uptick in bitcoin price, the store of value narrative is winning for now.
While there's no shortage of old and new believers to keep the party going, along with plenty of developers working to create better, forked versions of bitcoin, I’m betting my chips on a more flexible alternative.
The door is wide open for blockchains that use smart contracts, like ethereum, and I believe their potential market dwarfs that of "store of value" chains. Platforms like ethereum are an operating system for decentralized finance and commerce.
They power applications – lots of them.
A comparison
Think of bitcoin as DOS and ethereum as Windows or Mac OS. There is nothing wrong with DOS. It came first and was an essential part of the computer's success.
Us geeks grew up on DOS, but computers only went mainstream when Windows and Mac OS appeared. DOS is difficult to learn, tricky to program and few applications ever ran on it. Windows and Mac OS support and encourage applications to be built and are ultimately easier for people to use.
Ethereum is like Windows and Mac OS, and as a result, developers are creating applications in the thousands.
It feels like the internet boom in 2000. Thousands of new companies are sprouting up with highly innovative business models and bleeding edge compliance with regulation, and new methods are being found to finance them. Most, like Pets.com and Webvan, will fail. But some will be the next Amazon, eBay, or Google of the blockchain generation.
But with its proven stability and exceptional immutability, don’t bitcoin’s developers deserve the reverence that the rocketing price implies?
I wouldn't be quick to yes to this. They are so resistant to change that they’d rather give up all hope of serving the common man. Let's face it, bitcoin today is a product for an elitist few that can afford the high transaction fees. They have chosen a path to a technical dead end.
A better way
Last month’s DevCon3, an ethereum developer conference, may be evidence of a contrasting approach.
With 2,000 developers in attendance, each paying $1,000 plus expenses to collectively push the boundaries of blockchain innovation, ethereum’s future seems secure. But what of other smart contract-enabling technologies?
Sure, there are a few new pretenders out there claiming to be ethereum 2.0. None have yet demonstrated anything like the innovation or rapid improvement of ethereum, nor do they have the developer mindset.
You can’t write any of them off just yet, but ethereum has shown a dedication to innovation at all costs and an effectiveness that leaves no doubt that it will be the main platform for blockchain application development for years to come.
Those guys are already working on privacy and scaling, the likes of which the other blockchains can only dream. To me, you must evolve or die. In 2018 and beyond, ethereum and other technologies will continue to evolve and power applications will drive the next technology age.
Disclosure: Jez San is a current investor in ethereum and bitcoin as well as a handful of other cryptocurrencies such as EOS and AION.
Think a different blockchain will dominate? CoinDesk is accepting submissions for its 2017 in Review series. Email news@coindesk.com to tell us your thoughts on the year ahead.
Ethereum image via Shutterstock.