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WAX ON: What is the biggest threat to Ethereum? The answer may surprise you.

Feb 7, 2020
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Video Transcript:

I want to make a short, but I think important comment about Ethereum. Specifically, where Ethereum is headed, and why, I don’t think it’s going to get there.

A lot of you have probably heard about the BIG changes coming to Ethereum. The BIG big news is that it’s “transitioning” to a Proof of Stake chain. So migrating off the ‘ol Proof of Work approach, that’s gotten Ethereum to where it is today. This is going to happen in phases, starting with a test environment called Beacon. And eventually, the final phase of ‘new and improved Ethereum 2.0’, which will be called, Serenity.

Now Serenity is going to do all this Proof of Stake stuff, while ‘presenting’ as its former, Proof of Work self. The target targeted transition date is 2022. But that won’t happen. Expect 2024. 4 years from now. But even if they do move remarkably fast, and get it done in 3 years, it’s still too long.

SOMETIMES when you try to do a re-model, it has a way of getting away from you and transforming, into a complete rebuild. And ALWAYS in retrospect, someone says “we probably should have just constructed a brand new house”.

Here is my controversial point. I BELIEVE, Ethereum should stay, pretty much, as it is. It’s come a long way. From the whitepaper in 2013, the crowd sale in 2014, the launch in 2015.

Ethereum began life, as a Proof of Work chain. And I think, it should stay that way. Not because I think Proof of Work is the future. In fact, for bringing Blockchain to commercial scale, Proof of Work is a technological dead end. Even Vitalik, the chief designer of Ethereum, understands that. That’s why he ADMITTED that Ethereum “is like a smart phone from 1999 that can process 15 transactions a second, and play snake.”

So if we know Ethereum can’t scale, it takes too long to process transactions, it’s too expensive, and has a lot of other shortcomings - Why am I suggesting that Ethereum stay the course, as a Proof of Work chain?

I am saying that because, in my experience in conceiving, launching and ramping new technologies and companies - you start out with a certain purpose and a set of goals. You can adjust those over time, but with every passing year the degree a technology platform can shift, to meet the changing market conditions, becomes more and more limited. And eventually, it’s like the platform becomes set in CONCRETE. This happens for a bunch of reasons, not the LEAST of which is, a bunch of people are using it. And they get stuck in THEIR ways. They’ve accepted the platform for what it is, and they’re for the most part, content.

All technologies reach an EVOLUTIONARY end. And then you need to jump to a new project, where you can adopt, a brand new approach.

Ethereum can be re-built into a Proof of Stake chain. It can fix, what in retrospect, are design shortcomings. But it’s the wrong place for this talented team, to put its energy. Let Ethereum remain as a monument, a first generation smart contract platform, that ushered in a massive amount of experimentation, and excitement. SURE, keep maintaining it, but don’t try to FORCE FIT a dated design to meet tomorrow’s challenges in blockchain. Challenges we can see now much more clearly, than we could when Ethereum was conceived, 6 years ago.

Ethereum is the Yahoo of the blockchain era. It had a great run. It will always be famous for what it accomplished. Many NEW ideas were spawned, because of it. But when the team tells you, that they have to do the equivalent of a blockchain sex change - going from Proof of Work to Proof of Stake- to get where they need to go, its time to say “let’s start over.” Don’t take on the problems of an installed base, thousands of Dapps and other layer 2 chains, that may not even want to migrate over to Serenity. Think about it. How many of the existing PoW Dapps and layer 2 chains, using Ethereum today, will want to do that? The biggest competition that Serentity (“Ethereum 2.0”), will face, is probably, Ethereum 1.0. I think a lot of the existing Dapps, and layer 2 chains on Ethereum 1.0 today, ARE GOING TO STAY THERE. And if you aren’t going to get, the benefit of that installed base on your blockchain, you might as well free yourselves from the design limitations that INSTALLED BASE, imposes on you. And just start fresh.

Those are my thoughts on Ethereum’s transition to Proof of Stake.

If you liked what you heard on this video, please hit subscribe, or post a comment,and I will talk to you next time.

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