Ethereum's lifespan could be shorter than 10 years, as per the assertion of Charles Hoskinson.
Rewritten Article:
Cardano ADA Founder Predicts Tough Times for Ethereum ETH
In a candid "Ask Me Anything" session on April 23, Tuesday, Charles Hoskinson, the founder of Cardano, dropped a bomb shell about Ethereum's future. Here's a breakdown of his concerning comments.
Hoskinson, who was once a co-founder of Ethereum, believes that the king of smart-contract platforms may not survive the next 10-15 years. His reasoning? Three fundamental structural problems that, if left unresolved, could lead Ethereum to the same fate as Blackberry and Myspace.
Three Major Achilles Heels
Hoskinson went on to specify that Ethereum's woes stem from a fumble in accounting, a virtual machine stuck in the Stone Age, and a consensus model that puts the network at a disadvantage. He slammed Ethereum's economic model as a failure and took aim at layer-2 solutions, calling them parasites feasting on the network without resolving the core issues.
Speaking of layer-2 solutions, Hoskinson thinks they'll continue to erode Ethereum's alpha, causing a power struggle that might make it impossible for Vitalik Buterin to keep the network together. In the long run, Hoskinson predicts that users will migrate to other networks, leaving Ethereum's DeFi ecosystem in the shadow of Bitcoin's.
The Coming Shadows
Ethereum has had a rough year, with experts attributing its underperformance to a variety of factors: Arbitrum and Optimism (and other L2 solutions) siphoning value, high gas fees, regulatory uncertainties, and dwindling institutional interest.
On a brighter note, the Ethereum community is pinning their hopes on upcoming updates like Pectra and Fusaka, which they believe will address these issues later in the year. These updates could boost the network's scalability and usability, making big-time crypto transactions more practical.
Ethereum's Current Standing
At the time of writing, Ethereum is trading at $1,765, recording a 1.1% drop over the past 24 hours. Though its position as the second-largest cryptocurrency remains unchallenged, its ability to stay on top remains uncertain.
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Insights:
- Charles Hoskinson, co-founder of Ethereum and founder of Cardano, highlighted several significant structural flaws in Ethereum: the chosen accounting model, the virtual machine, and the consensus model.
- Hoskinson noted that Ethereum's account-based ledger system is less efficient than UTXO models, like Cardano's. He also criticized the Ethereum Virtual Machine (EVM) as outdated, and voiced governance-related concerns over the network's proof-of-stake implementation.
- Hoskinson argues that Ethereum's Layer-2 solutions, such as Arbitrum and Optimism, drain value from the main chain without addressing core scalability issues. He is concerned that this could lead to a "hostile divorce" as these networks gain dominance.
- Hoskinson expressed that Ethereum's off-chain governance lacks formal community voting mechanisms compared to Cardano's on-chain Project Catalyst, predicting this could lead to infighting and centralization.
- Hoskinson forecasts that Ethereum's structural flaws will enable competitors, such as Bitcoin's DeFi ecosystem, to eclipse it within 10-15 years.
- By 2025, the technology landscape may see Ethereum, the leading smart-contract platform, grappling with issues similar to those faced by companies like Blackberry, if its flawed accounting, outdated virtual machine, and disadvantaged consensus model remain unaddressed, as predicted by Charles Hoskinson, the founder of Cardano and a former co-founder of Ethereum.
- In the coming years, the innovative technology behind Bitcoin might overshadow Ethereum's DeFi ecosystem, according to Charles Hoskinson, due to the perceived failure of Ethereum's economic model and the continuing erosion of its alpha by layer-2 solutions that, instead of resolving core issues, are seen as parasites.
- Despite the ongoing concerns about Ethereum's structure, highlighted by Charles Hoskinson and others, the cryptocurrency maintains its position as the second-largest, currently trading at around $1,765, with its ability to stay on top uncertain as we move towards the next decade.
