The fate of cryptocurrencies is dynamic, the roadblocks to ETH are considerable. Last year we loved to speculate about Bitcoin, this year we are talking about Ethereum a bit more, it’s only natural. This is also since decentralized app platforms and their interactions with cryptocurrencies and altcoins are more intimately tied to the evolution of public blockchains than niche coins such as privacy, stable or crypto assets.
Ethereum is like a promise to the future that decentralization will one day actually matter.
There’s been talk lately that ETH the asset will inevitably be worth nothing one day, that its collapse is inevitable. That’s an amusing dialogue since it forces us to consider just how fast things are moving. ETH has problems to mass adoption:
- Scalability
- Transactions are too expensive
- The technology is getting old
- Newer more scalable blockchains will eclipse it
- Developers will migrate to more “shiny” ecosystems
It’s feasible in 2018 to talk about how many of the things Ethereum set out to do, others will do better. Ethereum has a massive community and is decentralization-orientated in a way that feels much more genuine than many other projects; however that’s not to say that its value as ETH is eternal.
It doesn’t run unstoppable applications. It’s created a shared global infrastructure for ICOs, something we must admit has damaged the reputation of crypto to be synonymous with fraud and scams, in dire ways. Bitcoin purists have many valid points for being critical of Ethereum. It’s scaled “mistrust”, probably more than it’s scaled trust and used blockchain to create a new world.
As TechCrunch points out, there’s no future for GAS in its current state. It’s expensive AF. ETH fees are not a sustainable model as they work circa 2018. The Gas metaphor is legit but an ugly model as the same time:
The Ethereum network is like a shared car. When a contract wants to be driven by the shared car, the car uses up fuel, which you have to pay the driver for. How much gas money you owe depends on how far you had to be driven and how much trash you left in the car. — TechCrunch
But we need blockchain platforms and dApps with the equivalent of self-driving and electric cars. We need clean energy. Is Ethereum ever going to be that model? In 2018 as dominant a position as ETH has, relative to other cryptocurrencies, we can’t say it’s so, or will be so. The ERC-20 won’t be relevant forever, that’s a given.
Crypto has a regulation problem, there’s a lot of manipulation in the space. Smart contracts are just in their infancy. Ethereum is the first-mover, not the end-game of this stuff. It’s inspiring, rather than a delightful product. That’s okay, that’s how technology works and how innovation happens.
But is Etheruem the solution to cryptoeconomics and economic abstraction obstacles?
- Lack of software support for economic abstraction
- Difficulty in pricing many tokens
- Existence of contracts not tied to tokens (speculative)
- Need for ETH for Proof-of-Stake
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