The Problems with Ethereum

More than any other blockchain, Ethereum was the poster child Blockchain of 2017.

During all of 2017, the growth in all ETH metrics was exponential. Look at the number of Ethereum unique addresses for example:

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From Feb1 2017, when ETH really found it’s killer app (ICOs), the number of unique ETH addresses pretty much doubled every 2 months.

1.6MM April 30.
3.2MM June 18
6.4MM Aug 25
12.8MM Dec 4 (slight slowdown)
25.2MM Feb 2 (and back..)

Things have slowed considerably since then. It might be another data glitch, but it now seems ETH addresses are only growing linearly, and that overall transactions have stopped growing.

As I have mentioned several times, at current throughput max of 20 tps, the 1.3MM daily transactions of ETH is a hard cap. So until ETH goes to proof of stake (Caspar)

But why the slowdown? Three fundamental reasons:

1. ICOs were hit with increased regulation in March.

Since the killer app of ETH was ICOs, the slowdown of the ICO market starting really in march has slowed down all other metrics of ETH.

2. Realization that ETH based dApps are very unfriendly

There were a lot of interesting ideas hatched in 2017, but many of the ETH based ideas simply turned into apps that are hard to use. I like the premise of Augur, but the ETH app is literally not downloadable on my machine. Just as one example.

3. EOS emerging as a real competitor.

EOS has now been live for 2 months. It is far from perfect. But sending EOS from A to B on EOS LYNX is a fundamentally different experience than sending ETH on any other app. With accounts and no direct gas fees, you can build something on EOS that you absolutely cannot on ETH.

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Every single day now EOS is doing 10x the transactions of ETH. This is NOT a fluke. This is the power of a fast blockchain.

Next? Caspar

We are still early days. Caspar will probably exist within 6 months and ETH will get fast, possibly comparable to EOS. It’s not game over for ETH by any means. They still have far more developers than EOS. But tech can change quickly, and with just a few more tweaks, EOS could have the same growth curve as ETH in early 2017.

It really feels like Blockchain will start to get mainstream in next 12 months. Not just in terms of investment but actual applications.

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