Or is it already dead?
The once-promising blockchain and beloved smart contract project seemed to be at the top of the world. From a high of $1431 in January 2018 to its current low of $126, it seems whatever hopes people have for Ethereum have faded quite a bit.
Despite the fact that Ethereum still holds the number two spot on Coin Market Cap Ethereum has fallen out of the limelight somewhat with developers. On State of The DApps, Ethereum accounts for only three of the top ten applications. Klaytn accounts for four of them, Steem accounts for two and NEO just one. In the top five, Ethereum only has one DApp.
Vanity metrics aside, given Ethereum was one of the first smart contract platforms and holds the coveted #2 spot, you would expect more popular applications to be using it. However, over the last two or so years, many projects and exchanges have moved away from Ethereum to their own solutions.
Ethereum used to be ICO blockchain. Almost every ICO in 2017 was an ERC20 token. Fast forward to 2019 and the projects that are still alive, quite a few of them have moved away from Ethereum. Crypto.com (formerly known as Monaco Card) previously used Ethereum, until they created their own blockchain called Crypto.com Chain (CRO). In early 2019, Binance famously ditched Ethereum for their own solution as well Binance Chain.
Tron and EOS are also two other blockchains which received their funding through Ethereum and then subsequently created their own competing blockchain. It seems Ethereum has become the gateway to other blockchains.
One of Ethereum’s biggest problems is that it has serious scaling issues. I am sure you all remember CryptoKitties which famously crippled Ethereum a couple of years ago. It also turns out that Tether may also be to blame for Ethereum’s high network usage and problems.
Having said that, many blockchains have the same scaling problems. Bitcoin is also quite full, EOS recently experienced some serious problems with their network as well.
While the anticipated Ethereum 2.0 release will alleviate some of the problems by moving away from proof-of-work to proof-of-stake, nobody can agree on anything. There has been a tonne of infighting within the Ethereum team and associated entities contributing to the blockchain.
Allegedly the first upgrade will be happening in January 2020, but given the turbulence, Ethereum has experienced with nobody seemingly able to agree on anything, I would actually be surprised if that happens. People are afraid of Ethereum 2.0 and the changes being proposed.
Even one of the co-founders of Ethereum recently sold off 90,000 ETH worth $11 million US dollars. Another nail in the coffin of an already fractured and turbulent cryptocurrency project.
Given Ethereum was one of the first general-purpose smart contract blockchains, perhaps it was inevitable that it would eventually lose some of its popularity in favour of other more modern solutions who have the luxury of beginning from scratch without having to worry about an entire legacy ecosystem built around them.
I don’t think Ethereum will truly die, but there are so many better options out there now ranging from Steem to EOS, to Stellar, Tron and Klaytn that make Ethereum look antiquated and clunky. Ethereum is no longer the first choice that comes to mind for many DApp developers.
Fast forward to today…?
Well, the price certainly recovered. Still, Ethereum 2.0 isn’t out just yet and who knows how that will go. Ethereum still has the glaring issue of Gas and the volatile nature of pricing depending on the network load. I am actually more bullish on Cardano taking away some of Ethereum’s 2.0 buzz when they launch their smart contracts functionality in March 2021.
I still don’t think Ethereum is the number one option for dApp developers any more. It’s still big and many dApps run on it, but until they sort out the issues with Gas and other problems, it’s a deterrent to me and other developers wanting to build large-scale crypto apps.