Ethereum Is Not The Future
As controversial and seemingly unlikely as my opinion may be, I truly believe that Ethereum will not end up being the "supercomputer" for the world, its founders wanted it to be. After its recent transition from being a Proof-Of-Work blockchain to becoming one based on Proof-Of-Stake, Ethereum lost the only thing that kept it from being compared to other and better Proof-Of-Stake blockchains out there. Whereas Bitcoin was the first cryptocurrency, has a fixed supply, and is one of the only Proof-Of-Work projects still left, it's #1 altcoin Ethereum can now say none of those things. In my humble opinion, I believe that-
Ethereum's days as the #2 cryptocurrency are numbered.
While many people are of the mindset that Ethereum will one-day flip bitcoin as the #1 cryptocurrency, I view it a little differently. A while back in my research of different altcoins, I came across two cryptocurrencies with origin stories I didn't quite understand. Those two were Polkadot and Flow. Flow is a layer 1 blockchain put together by Dapper Labs, who themselves created a popular game series on the Ethereum blockchain called Cryptokitties. The Cryptokitties game brought on so many transactions to Ethereum, that Ethereum blockchain’s transaction speeds fell and transaction costs went sky-high. The game literally brought Ethereum to its knees...and that is exactly why Dapper Labs decided to leave the Ethereum ecosystem and start Flow instead.
Gavin Wood, the creator of Polkadot, was a genius who thought up Solidity, the programming language coders use to write for Ethereum. For a time, he was even the chief technology officer for the Ethereum blockchain when it first began. But then he left. Why? Why leave a project to which you've dedicated so much time and effort? There could be many reasons for a person to do this, but for Gavin Wood specifically, one of the reasons was because he didn't agree with releasing an unfinished product.
As chief technology officer, Gavin saw that more work was needed to make Ethereum a blockchain that could easily evolve and adapt to anything it needed from day 1 (much like how Tezos can upgrade itself with new features without too much trouble). However, the issues he saw were instead chosen to be fixed by sharding (who knows when that will actually be?), rollups, and layer 2 solutions, some of which we know today as Optimism and Polygon. It’s this decision here that created ETH's fatal flaw.
Ethereum's Fatal Flaw
High fees and poor scalability. Then I finally understood. This is what Flow/Dapper Labs didn't like and what Gavin Wood of Polkadot saw. Recently, I tried to withdraw some SPOT from Publish0x to see how it would work. Suffice it to say, I had an interesting experience. The $1.00 in SPOT I withdrew, got sent to a Metamask wallet running Ethereum. Transferring that $1 in SPOT on the Ethereum network to a personal storage device of mine, would cost about $3.00. This would be in the middle of a bear market where transaction numbers are low and the transaction costs should be small. To put that into perspective, in May during the bull market of 2021, the transaction cost on the Ethereum network hit $71.00. Let that sink in for a moment. To transfer $1.00 of SPOT to a personal device back in May 2021, would have cost a whopping $71.00.
Okay. Then I tried something else. Would it be cheaper to send ETH directly to my personal device? Yes, it would. But guess what? I would need to swap my $1.00 of SPOT into Ethereum and that would still cost me that same $3.00. Wow.
What about Layer 2s like Polygon or Optimism you might ask? The SPOT token was given to me on the Ethereum network. So I would need to swap it for Polygon (which would still cost $3.00), bridge it to the Polygon Network (which would cost me another $2.30), then finally send it to my personal device for a small $0.03 cents. Remember, this is during a bear market where Ethereum's price is low, with very few transactions. As more people use Ethereum and its price goes up, so will the transaction fees for ETH as well as all its Layer 2 options. Why? Because the Layer 2 transaction price, will always follow the Ethereum transaction price.
If you are a reader who could not follow or understand any of what I just said, you are not alone. Ethereum and its Layer 2 solutions are going to be very hard for the average person who knows nothing about crypto to understand. Ethereum and its Layer 2 solutions will not bring mass adoption. It is too hard to grasp. There is NO WAY a majority of the population is going to take the time to understand bridges, what wrapped tokens are and try to navigate transferring assets between six different Layer 2 solutions (Optimism, Polygon, Arbitrum, ZKSync, StarkNet, Loopring).
The Rise of Layer 0s
Which brings me to my next point. While Ethereum was the blockchain that did it first, it will not be the blockchain that does it best. The network that handles every blockchain and will help usher in that era of mass adoption will not be Ethereum. Its system just can't handle that. For Ethereum to process and hold all of the world's transactions, the fees would rise so high the blockchain would be unusable. And the Layer 2s that work on Ethereum wouldn't be able to cut down the transaction costs enough to be of any help.
The answer would be to have one cheap blockchain full of projects that people will actually use (like Solana is trying to do) or have one large blockchain whose job is to connect with the other blockchains inside of it. The funny thing is something like that exists already and it's called a Layer 0. Two famous Layer 0 blockchains come to mind and wouldn't you know it, the very same Gavin Wood that left Ethereum, is the co-founder of one of them: Polkadot.
This is not an endorsement of Polkadot (DOT) or the other Layer 0 blockchain Cosmos (ATOM), but if there were anything else that’d finish what Ethereum started, in my opinion, it would have to be one of those. Ethereum is a blockchain that lifted the crypto industry and was a great help to Bitcoin; further showing people what things blockchain and cryptocurrency could do. While it was an important part of the past and certainly an important part of our present, I don't see how Ethereum will be part of our future.
For those who disagree or have no opinion, I encourage you to not just listen to what YouTubers, big companies, or the media say about Ethereum but actually use it. See how easy it is to transfer crypto on its network. See how long those transactions take. See how much you pay in fees. See how easy or hard it is to send crypto from the Ethereum blockchain to another. Remember how that feels like. Then try it again when the next bull market comes and decide for yourself if Ethereum is indeed the future.
