This article is based on a tweets of Tuur Demeester where he strongly criticised Ethereum founders and in particular Vitalik Buterin. I added my own views and experience from programmers. Recently lots of coders complain about the malfunction of the once famous and meant-to-be-wonderful Ethereum blockchain.
Several influencers published critical views which I summarise below and which also express my personal views.
Ethereum is considered a crypto blue chip, which it is definitely NOT. Vitalik Buterin´s startup is – like himself – VERY young. It is full of bugs, transaction are way too expensive and it is definitely too slow for real world applications. Let me share some own findings and major ones of Tuur:
First, contrary to its marketing, ETH is at best a scientific experiment. It’s now valued at $15,6 B, which is very high compared to an intrinsic value and given the weaknesses and unpromising outlook.
Second, I had to deal with applications for smart grids and energy network. It was very clear that Ethereum is not suitable for energy applications: too expensive, too slow. For a single house the price for transactions would be US$ 300.000 Ethereum.
Third, Ethereum developer Vlad Zamfir even tweeted that it’s not money, not safe, and not scalable. And Vlad is one of the core developers of Ethereum. Interesting!
Fourth, there were often posed questions to Ethereum founders about how they were going to scale the network. Sharding was a topic by then and we’re now 4 years later, and sharding is still a dream.
Fifth, despite strong optimism that on-chain scaling of Ethereum was around the corner (just another engineering job), this promise hasn’t been delivered on to date.
Blog entry of November 2015 by Michael Ilg:
Sixth, Muneeb Ali cited a team of reputable developers decided to peer review a widely anticipated Casper and sharding white paper, concluding that it does not live up to its own claims.
The review claims that “the authors do NOT prove that the CBC Casper family of protocols is Byzantine fault tolerant in either practice or theory”.
Seventh, on the 2nd layer front, devs are now trying to scale Ethereum via scale via state channels (ETH’s version of Lightning), but it is unclear whether main-chain issued ERC20 type tokens will be portable to this environment.
Eighth, I consider the Bitcoin Lightning Network still a misconcept, which I criticised in previous articles. However, contrary to 2nd layer front of ETH Bitcoin managed to release the first public code in January 2016, Alpha in January 2017, Beta in March 2018. Which is far better than ETH ever managed. And Bitcoin’s Lightning Network is now live, and is growing rapidly, of course still full of bugs, but at least it´s running!
Ninth, in 2017, more Ethereum scaling buzz was created, this time it was called “Plasma”. Buterin & Poon published a new scaling proposal for Ethereum, “strongly complementary to base-layer PoS and sharding”: plasma.io
Peter Todd came to the conclusion that upon closer examination “…these ideas were all considered in the Treechain design process, and ultimately rejected as insecure.”
Tenth, the transition to proof-of-stake, an “environmentally friendly” way to secure the chain. If this was the plan all along, why create a proof-of-work chain first asks Tuur Demeester.
The consensus mechanism Proof of Stake (PoS) is not a new concept at all. Proof-of-Work actually was one of the big innovations that made Bitcoin possible, after PoS was deemed impractical because of censorship vulnerability.
Proof-of-Stake based private currency designs date at least back to 1998 and has been part of the CypherPunk movements early concepts. See Medium article
Eleventh, over the years, it became a pattern in Ethereum’s culture to recycle old ideas while not properly referring to past research and having poor peer review standards. This is not how science progresses!
Vitalik Buterin has been repeatedly criticised for not crediting prior state-of-the-art. Once again with plasma: see the tweet
One of the concerns of Tuur Demeester –an important critical voice when it comes to Ethereum – is that “…sophistry and marketing hype is a serious part of Ethereum’s success so far, and that overly inflated expectations have lead to an inflated market cap.”. That´s a thing!
Twelfth, A few more inconvenient truths: In order to “guarantee” the transition to PoS’ utopia of perpetual income (staking coins earns interest), a “difficulty bomb” was embedded in the protocol, which supposedly would force miners to accept the transition.
Of course, nothing came of this, because anything in the ETH protocol can be hard-forked away. Another broken promise.
Looks like an Ethereum hard-fork is going to remove the “Ice Age” which is the difficulty increase meant to incentivise transition to PoS.
After Tuur tweeted even true ETH-evangelists on Twitter started criticising Ethereum founders and said things like:
“It is a rant. Still informative. Covers key points and provides great articles. Hard to find criticism of Ethereum written by its own community. That’s were competitors come in handy. Bitcoin is for many a religion. So is Ethereum. All extremists are as unpalatable as it gets.”
Tuur´s criticism is similar to what I have seen over the last year: broken promises, postponed implementations, lots of visions and dreams, and a blockchain full of bugs, slow, expensive transaction. With blockchains of the third generation like EOS, 0BSnetwork,Stellar, Cardano, IOTA the blockchain 2.0 Ethereum has to work hard to fulfil its promises.
Source: Tweet of Tuur Demester