My bearish thesis on Ethereum revolves around the fact that they shot themselves in the foot by over marketing their platform before figuring out the tech.
If you haven't heard already, the big craze in crypto over the weekend was the emergence of a popular DApp (decentralized application), CryptoKitties (kill me now).
All the ETH fanboys were out and about on Twitter taking a victory lap as they had discovered "Ethereum's first killer DApp". There was a slight hiccup however, the DApp's popularity led to historic congestion on the Ethereum network and pushed fees up considerably higher as lame excuses for grown men + women bid against each other to acquire securitized cats. It pains me to write this, but someone paid $112k in $ETH to acquire one of the cats (*cough* money laundering *cough*).
The instant popularity of the DApp highlighted some of the inherent functions of blockchains and the problems Ethereum faces as it attempts to scale. One inherent function of a blockchain is that the more popular it becomes, the more expensive it is to transact on the network as users compete via fees to get their transactions included in a block in a timely matter. Ethereum, a project that is promising a world computer to... the world, plans to run all sorts of applications at the protocol level. Applications that will make the world a much better, fairer place to live. If this weekend was any indication, Ethereum has a lot of things to figure out before it even comes close to a semblance of a fully functional world computer. Unfortunately for them, the overwhelming success of their stupid cat DApp may force their hand when it comes to scaling.
This tweet should scare the shit out of Ethereum developers. My bearish thesis on Ethereum revolves around the fact that they shot themselves in the foot by over marketing their platform before figuring out the tech. We may now find ourselves in a spot where the people who are attempting to use the world computer will pressure Ethereum devs to rush scaling solutions, which could (will) lead to disastrous consequences.
The DAO code was "diligently" audited by some of the most respected devs in Ethereum and Parity was founded by one of the founding members of the Ethereum team and the man who helped design + create Solidity. Yet, both of these projects proved to have buggy code that led to massive losses. I can only imagine the shit show that will unfold if the Ethereum team's hand is forced to push untested/unproven scaling solutions on the network due to its own "success". It's not apparent that this will be the case, but if a few more DApps pop onto the scene and exacerbate this problem, we could be in store for a show.
Who knows, I could be a complete asshole who has no idea what he's talking about. We'll see.
Going into an office to work for the first time in a LONG time today. Wish the kid some luck.