Why Ethereum Is Not Metaverse-Ready
Ethereum is a disaster for Dapps, blockchain games, and the Metaverse.
It still works for large investments in DeFi and outrageous NFT valuation, but that’s about everything there is today in Ethereum.
Fees are consistently unreasonably high and ETH miners extract a huge part of the value created within this blockchain.
Proof of Work (PoW) is equally important. And the move to PoS and staking can also add to a serious decline in Ethereum userbase, adoption, and expansion.
The latest upgrades introducing an ETH burning process were simply last-minute patches that applied as a mechanism to support price but had nothing to do with utility.
Developments of “Metaverse” applications require efficient networks with low fees and lightning speed to accommodate millions (if not billions) of daily micro-transactions.
It is illogical to invest long-term in any Ethereum driven Metaverse project.
Dysfunctional Networks will Lose Appeal to Investors
This bull run is purely institutional, the retail investors joined in 2021 with Robinhood but the main volumes in crypto investments came from Grayscale, Tesla, Microstrategy, Square, some top funds, and more institutions that invested in various cryptocurrencies.
Grayscale and other institutional investors also bought huge amounts of ETH, reaching the valuation of Grayscale ETH reserves close to $15 Billion.
Ethereum suffers from high fees even when the network is not congested. The fact that as price rises, fees also increase is a vast issue of crippled networks.
The Dot-com bubble had a lot of similarities with stocks reaching unreasonable valuations since most companies offered almost nothing of real long-term value. Ethereum offers the bare minimum and extracts the maximum value from fees.
We have networks working today, scaling efficiently to meet universal demand. Ethereum “plans” to scale with sharding in the next 5 years, and judging by Ethereum delays in developments so far, I wouldn’t be surprised if this development finishes in 10 years or more. If Ethereum is still relevant in 5 years.
For Bitcoin (BTC), Ethereum’s downfall will be a perfect victory.
The BTC advocates and narratives explain that all other cryptocurrencies are scams or fake or a clone of Bitcoin.
Yet, BTC is equally crippled as Ethereum. Second layer solutions in BTC can only bring centralization and, as we observe with the enforcement of LN in El Salvador, it doesn’t seem to be implemented well.
DeFi is a unique technology that will reach higher recognition and adoption levels, but currently, in Ethereum, it is in a difficult state as well.
High fees will be destructive for Ethereum. There is a possibility it may lose its status and become obsolete as better alternatives are already there.
Defi and NFTs are still in a raw state within Ethereum, but expanding and finding use cases outside of a crippling network. Other blockchains are offering better terms for investors, collectors, artists, and traders.
Fees have grown into a systemic risk for Ethereum. The ETH community takes no action to solve this issue, as the short-term greed is in control of the narrative and any serious development discussion.
The cryptocurrency industry has a wrong approach in re-investing its huge profits. Top exchanges, Digital Currency Group, Galaxy Investments, Pantera Capital, all claim to have analysts performing research but it seems they all just employ juvenile and clueless amateurs, having no single clue what they are doing but following personal preferences instead.
In Conclusion — “Number go Up”
Price is not an argument; get over it.
Every time I write about the crippled blockchain of BTC and Ethereum, I keep finding comments reacting angrily and ALWAYS make a price argument.
“But, the price goes up!”
“But Ethereum keeps pushing new heights and being the dominant blockchain!”
Seriously is this a constructive counterargument? How do you expect to be treated by anyone when your whole point is about the price? Price does not reflect the critical problems Ethereum has.
For all the efficiency issues of Ethereum and the inaction of its development team to upgrade and create a robust network, the argument to counter a crippling network is the price is pushing to new heights?
I’ve been an Ethereum fan between 2017–2020, following all developments and kept buying the dips that were damaging me financially for years. Eventually, I profited from this investment, but by the end of 2020, I was certain Ethereum had nothing else to offer.
Maybe, Ethereum will grow into a network offering services to top financial institutions and accredited investors. As it always did, Ethereum moved forward, although, currently, it has evolved into a monstrous network without further potential.
The digital era will demand decentralized, efficient, and robust secure networks. If Ethereum becomes efficient one day again, maybe in five years it can compete under different circumstances.
Decentralization as we’ve correctly often been told is the vehicle to our freedom. Having to trust nobody else but the code itself is a move forward for transparent finance.
Every transaction has to be instant, though. More than a split of a second instantly puts cryptocurrency networks in a worse condition than banking. Fees, if possible, should be zero. Just a fraction of a penny does the trick today, but sadly many are not still convinced on the possibilities of the digital economy.
The digital economy today is not even 1% of what it will become in the next 25 years.
There are visionaries still among us in crypto, and understand how the future will unfold.
The rest can just keep looking for short-term potential and pay $250 in Ethereum fees rather than admitting they were wrong.
Notes:
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Originally published at https://read.cash.
