Ethereum may have a bloating problem without a solution. Vitalik Buterin, the co-founder of the Bitcoin Coin (BTC) alternative, made the revelation last week, stating that the cost of processing transactions might soon be too expensive for most users. Samson Mow, always a controversial cryptocurrency figure, has responded to what’s happening, calling the Ethereum blockchain “a technological dead-end.” With capacity almost full and transaction costs at all-time highs, Ethereum is not becoming the BTC alternative it expected to be.
Ether’s network utilization has increased to more than 90%, which results in higher transaction costs. For example, Tether paid $26,000 in fees last month to miners who use the Ethereum blockchain to process transactions. For companies that have previously turned to the distributed ledger technology (DLT) based on previous hype and who have launched their projects on the blockchain, they may now begin to regret their decision.
Mow, who isn’t afraid to admit his distaste for Ethereum, has publically criticized the solution almost since its inception. Because of Buterin’s latest comments, he was forced to reiterate his position, stating, “Ethereum is a technological dead end. The more it’s used, the faster it dies. Fortunately, USDT is also available on the #LiquidNetwork which is more scalable and later will allow Lightning Networks to be created for assets like Tether.” Mow expects the blockchain to literally disintegrate in a single day.
The Blockstream chief strategy officer may be opinionated, but he isn’t wrong. Ethereum came in at a good time and promised to build a better blockchain, but it is now becoming apparent that its efforts have come up short. Talk of moving from a proof-of work to a proof-of-stake model only exacerbates the issues and shows desperation on the part of Ethereum’s developers as they consider a Hail Mary approach to solving the DLT’s integrated limitations.
Even some investment experts are weighing in and have shown a certain lack of optimism about Ethereum’s future. One, Arca Chief Investment Officer Jeff Dorman, told Bloomberg, “So the biggest implication today is simply that developers may be incentivized to wait until this transition happens before fully committing to building on Ethereum. Tether isn’t helping.”
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