Is Ethereum dead? Here's why ETH still has a bright future

22 Feb, 2019 | Updated: 22 Feb, 2019
by David Borman
Is Ethereum dead? Here's why ETH still has a bright future

Ethereum is very well known throughout the cryptocurrency sphere, currently in the number 2 spot on Coinmarketcap and one of the most recognized projects after Bitcoin. However, Ethereum has also seen some pretty hard times lately. Does Ethereum still have a future and what does that future look like? 

Though the same is true across the market, the price of Ether has dropped massively since the highs seen just over a year ago. Combined with disputes inside the community and tough competition, many are predicting that Ethereum is falling from grace. However, in this period the Constantinople hard fork should be released and with it major upgrades to the network. If the fork goes well and the project continues to see new developments, can Ethereum prove the doubters wrong and stay on top? Or is the project, in fact, already doomed? Let's dig in.

Read more:
What is Ethereum?

What are the detractors saying?

Among those who feel Ethereum's best days are already over, there are a handful of issues that continually pop up again and again. We'll take a look at the biggest and most common complaints to see if they hold any merit.

Lack of support and stiff competition.

One of the biggest claims thrown at Ethereum time and again is that other similar platforms, such as Tron and EOS, have larger numbers of users and faster transactions. Recently Tron founder Justin Sun himself took to Twitter to revel in the fact his platform was in the lead in terms of most dApp users.

It has also been often touted by Sun as well as other project heads that many of Ethereum's competitors have massively greater numbers of transactions per second, sometimes in the thousands. Currently Ethereum can only handle 20-30 tx/s on average. While this sounds damning, Vitalik Buterin has come out to defend his project by saying that these other platforms mainly achieve this through centralization, and Ethereum is dedicated to being decentralized.

Another claim is that Ethereum dApps simply aren't being used that much. Recent reports have shown that while EOS enjoys 50% of its dApps being used daily, Ethereum can only claim that 10% of it's dApps are used every day. That being said, almost 90% of EOS dApps have less than 1,000 users, making this claim a bit weak as far as proving relevance.

Another issue is that it seems Ethereum is losing some of its projects to the up-and-coming Binance Chain. For the time being Binance Chain does not support smart contracts however and so the two are only in partial competition. Nonetheless it looks like some projects based around token issuance have in fact jumped ship from Ethereum.

Cultural and Development Team Issues

Recently the Ethereum community suffered a bout of drama when Afri Schoedon, one of Ethereum's core developers, announced he would be leaving the project due to the constant attacks he was suffering through social media. This is obviously a blow to the development team, and also started a conversation about how much longer the community can deal with the constant stream of toxic comments that tend to permeate Twitter, Reddit and others. Some seem to be taking the issue very seriously:

While others apparently had no sympathy for those affected:

On the one hand, it should be noted that the Ethereum developers have been working on this highly technical project for years without a revenue stream that wasn't tied to the price of the coin. For many it has been a labor of love.

On the other hand, the team has had issues with transparency and there is merit to the claims that a small group of developers making decisions for the whole community perhaps goes against the notion of decentralization.

The Afri Schoedon situation highlights the fact that if the project is to survive it may need a better flow of communication between those developing and the rest of the community, but for it to work both sides will need to show a great deal of respect to each other.

Technical Issues

In its current form Ethereum still has a long way to go from being the true vision of founders Vitalik Buterin, Dr. Gavin Wood and Joseph Lubin, not to mention the countless others who helped along the way. As far as being a global computer it definitely works, but is not currently fast, versatile nor user-friendly enough for mass adoption. In a recent interview with BreakerMag, Samson Mow claimed he didn't feel the project was based upon sound principals:

"I like to say that their thesis is wrong. Their thesis is that you want to compute with the blockchain. And that’s just a dead end. That’s like making bigger blocks instead of a making a Layer 2 scaling solution. Whereas bitcoin—and Monero and Litecoin—[use it] just for verification. It’s like what I said before—the blockchain doesn’t really do anything if it’s just in isolation. What you really care about is having that sound money, that money that is uncensorable, that no one can stop you from sending."

It seems Mow feels that a global virtual machine, at least based on blockchain, is folly and that Ethereum should have focused on being money.

Whether or not that has merit, others are claiming that even if the idea is sound, the execution is still lacking. Recently Tuur Demeester went on an epic Twitter rant to point out all of the flaws he saw in the project. While at times technical, many of Demeester's points center around the overall slow pace of development and lack of realistic on or off-chain scaling solutions. Along the way he argues against Proof of Stake, which Ethereum will be implementing, as well as the lack of a meaningful equivalent to the Bitcoin Lightning Network. Eventually Vitalik Buterin stepped in to contest many of the points made, though ultimately nothing was settled.

So just what is Ethereum doing about scaling, increasing efficency and improving adoption?

It turns out, quite a lot. Many of the problems have solutions in the works, and hence most often the technical criticisms covered here boil down to "it's not here yet," or "that won't work," but we must remember Rome wasn't built in a day.

Read more: What to know about Ethereum's Constantinople hard fork

As for scaling, there are multiple solutions being proposed to help speed up transactions on the network. For one, Ethereum in fact does have an answer to Lightning Network, called the Raiden Network. While not as far along as Lightning, it is based around similar principles.

Ethereum will also soon be implementing a process called "Sharding," which works by breaking the data up into "Shards," which will be easier and more efficient to transmit through the network. Recently a developer claimed to have a working proof of concept of this code with hopes for it to be integrated in a future update. In theory, the combination of sharding as well as the Raiden Network could improve the transaction speed of Ethereum thousands of times.

As mentioned, another upgrade coming to Ethereum will be a switch from Proof of Work to Proof of Stake. Whereas Proof of Work, which is also the system that powers Bitcoin, requires energy intensive mining rigs in order to create blocks, Proof of Stake is massively more efficient, possibly as much as 99%.

Read more: Is Bitcoin dead? 8 reasons why it is NOT

But what of general adoption? There are many new partnerships sprouting up which use Ethereum to revolutionize industry. One such partnership is between ConsenSys, Harvard and Levi Strauss and aims to see Ethereum used in a system to enhance workplace safety in Levi's factories. Ethereum powered gaming is on the rise as well, with the first such title for the PS4, Plague Hunters, already in the works.

It also never hurts to have celebrity endorsements, especially when unsolicited. William Shatner, for example, has repeatedly proven his awareness and fondness for Ethereum on twitter, even giving a personal thumbs up to Vitalik Buterin:

Also ex-CEO of Google, Eric Schmidt, recently had the following to say concerning Ethereum:

"...if Ethereum can manage to figure out a way to do global synchronization of that activity, that’s a pretty powerful platform. That’s a really new invention."

While these endorsements are small, it shows that people you may not expect are paying attention to the platform.

So does all this mean that Ethereum is going to be okay?

As mentioned, many of the criticisms against it come from a culture that is often hyper-critical, impatient and unforgiving. It is not uncommon for tribal mentality to form around projects, which leads to intense animosity towards any other project which threatens their own. Still, many rational and educated people have also pointed out that there are technical hurdles with Ethereum that no one has sufficiently solved yet. Other projects abound that suprass Ethereum in one or another aspect, but no other project has proven it can stand head and shoulders above Ethereum either. The decentralized platform wars are still very much alive and no clear winner is in sight.

As of today, there is no reason to call Ethereum a dead project. Progress is moving forward and the coin is still #2 on Coinmarketcap. Around this time the Constantinople hard fork will once again attempt to be launched, and how this moment goes could prove critical. Another major issue could deal a blow to community confidence, but even so would not constitute a final nail in the coffin.

On the other hand, if the fork goes well and competing projects don't see any notable development to eclipse Ethereum, then we could one day laugh at ourselves for doubting the idea of this global computer. 

Read more: 9 Ethereum price predictions for 2019 by crypto experts

Perhaps, Ethereum's best bet still lies in its community finding a way to be more united. Like any conflict, this isn't an easy fix. However, faith and optimism around a project do seem to do wonders for its acceleration. It may boil down to this:

If you want to see Ethereum succeed, find a way to meet eye to eye with others that feel the same. If you can't find a way to do that, maybe go find a different project to support, where you can.

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