The future of Ethereum: Is it still worth investing in?

Source: Daoshuo Blockchain

In the comments at the end of the article these days, many readers have talked about their disappointment with Ethereum's performance in this round.

In fact, not only these readers, I have also expressed my disappointment in the article many times.

But disappointment is disappointment, we still need to rationally analyze the reasons behind it:

Is it a problem with Ethereum itself? Or a problem with the entire ecosystem?

If it is a problem with Ethereum itself, have these problems been solved in other blockchain projects?

First, let me say my conclusion:

I still hold Ethereum positions, which have not changed at all, and I have not exchanged Ethereum for other smart contract blockchain tokens; and I am still optimistic about Ethereum in the long term.

I remember that in previous articles, I talked about my three criteria for evaluating layer-one blockchain projects more than once:

How decentralized is its operation?

How is its community?

How is its team?

Today, my evaluation criteria remain unchanged.

According to these three criteria, the answer I came up with couldn't be simpler.

Among all the first-layer blockchains that support Turing-complete smart contracts:

Ethereum has the best degree of decentralization in terms of operation, and Vitalik is still doing his best to promote its further decentralization.

Its community is still the strongest and most cohesive.

Its team is still committed to inheriting Satoshi Nakamoto's ideas and is still advancing the project in an orderly manner, although this is becoming more and more difficult and the pace is getting more and more staggering.

Ethereum is not perfect at all, and there are many problems (such as being criticized for the opacity of the foundation and becoming more and more bureaucratic...). If you study it carefully, you may find 100 or even 1,000 shortcomings. But I still have to say that looking around the entire crypto ecosystem, I really can't find a second smart contract public chain that surpasses Ethereum in these three aspects.

Some of the "problems" of Ethereum criticized in many articles are not Ethereum's problems at all in my opinion, such as some people criticize the Ethereum team for not focusing on application construction.

Application construction should not be the focus of Ethereum. The focus of the Ethereum team should be to build the most decentralized, neutral, and censorship-resistant infrastructure, to build a "good nest" so that any phoenix (application) can live and work in peace and contentment.

As for what phoenix (application) this "nest" can attract, it is up to the hackers and geeks with infinite creativity around the world.

For another example, some articles criticize that Ethereum's value capture is taken away by the second-layer expansion.

There is no need to worry about this.

The second-layer expansion is still the Ethereum ecosystem, and its security ultimately depends on Ethereum, which determines that the value of the entire ecosystem will eventually return to Ethereum. It's just that the value will first go to the second-layer expansion, and then spill over to Ethereum. This will only make the entire Ethereum ecosystem stronger and the threshold higher.

Many readers have talked about the fact that Ethereum's coin price performance is not as good as some other blockchains, and they think that those blockchains may have long-term potential that exceeds Ethereum.

I have never used short-term price performance to measure the long-term potential of a project.

If we look back at the growth of Ethereum, we can appreciate the hardships and tribulations it has gone through to become the "king of smart contract public chains".

How many accidents, conflicts, and attacks has it experienced?

It has always been under the spotlight, and any of its problems cannot escape scrutiny.

Without this kind of purgatory-like tempering, it would not have achieved its current status.

This purgatory-like tempering is not only a challenge to the project itself, but also a challenge to the project team, project community, and especially the spiritual leader.

When we think about whether a project has the potential to overthrow Ethereum's position, we might as well think about this:

When that project sits on the "throne", can it withstand the tests that Ethereum has endured? Can its team, community, and spiritual leaders withstand the torment that Ethereum has experienced?

It is not so easy to sit on the "throne".

If you must ask why the price of Ethereum cannot compare with some other blockchain tokens in this cycle?

I thought about it seriously. If we only look at applications, it seems that apart from the active performance of MEME coins in some other blockchains, I can't think of other new applications.

But can MEME coins be considered an innovation in applications? Even if it is, can it last for a long time?

If the price increase of a project's token does not come from an application innovation that can last for a long time, then I will regard this price increase as a short-term market fluctuation rather than as a fundamental factor that changes the long-term potential of the project.

So I will ignore this short-term price comparison.

In fact, in this cycle, what amazed me most was the innovation of Bitcoin, especially the innovation of a group of protocols headed by Inscription. But it is a pity that after the innovation of the protocol, the Bitcoin ecosystem has almost stopped in terms of application innovation.

Looking at the entire crypto ecosystem, in this cycle, there is little to say about application innovation.

Back to the questions I raised at the beginning of the article:

Is it a problem with Ethereum itself? Or is it a problem with the entire ecosystem?

My answer is: The fundamental reason for the sluggish price of Ethereum in this cycle is the lack of application innovation, but this problem is not only a problem of the Ethereum ecosystem, but also a problem faced by the entire crypto ecosystem.

If it is a problem with Ethereum itself, have these problems been solved in other blockchain projects?

My answer is: This problem has not been solved in other blockchain ecosystems either.

In fact, when it comes to price performance comparison, I think more about why the price of Ethereum relative to Bitcoin has been falling in this bear market----------from 1 Bitcoin in the last bull market to about 15 Ethereums to now 1 Bitcoin can be exchanged for more than 20 Ethereums.

I think the reason here is probably because of the lack of application innovation.

After the US government loosened its restrictions on institutional investors in this cycle, institutional investors began to eye this ecosystem with eager eyes.

But when they find that the entire ecosystem is poor in applications, users are scarce, and they can hardly find "application value" that they can understand, how much can they invest?

You can't let institutions like BlackRock buy MEME coins? They probably won't be interested in DeFi tokens that have no value empowerment.

In this case, the only thing they can buy that has controllable risks, good liquidity, and high consensus is Bitcoin.

According to this logic, the rapid rise of Bitcoin prices relative to other tokens is much easier to understand.

But I think this is definitely not the norm, because the crypto ecosystem cannot always rely on Bitcoin. In the future, if the crypto ecosystem is to be able to substantially change our lives, there must be real application innovation and new business models. And I still think these innovations are most likely to happen in the Ethereum ecosystem.