Ethereum Has Already Won - The Daily Gwei #38
The only thing that can kill Ethereum is... Ethereum.
The “Ethereum killer” narrative seems to be heating up again due mostly to 1 reason - high gas fees. Obviously we all know that fees are really high on Ethereum so competitor chains are again trying to advertise themselves as “cheaper, faster, better” to lure developers and users over (which I don’t think is going to work). They’ve even pivoted their strategy to basically advertising themselves as Ethereum “sidechains” in an attempt to misdirect attention away from the fact that they are actually competitors.
Image source: https://ethereum.org/en/
“Ethereum killers” are nothing new - they’ve been around for years in the form of many different chains. In 2017, it was the likes of NEO (the “Chinese Ethereum”), TRON, VeChain, IOTA and of course the mother of them all, EOS. Where are these competitors today? They’re still around and their protocol tokens are traded on various exchanges but the chains themselves are basically dead - “ghost chains” as Evan Van Ness likes to call them. It’s also good to keep in mind things like the fact that EOS reportedly raised $4 billion in their year-long ICO during 2017/18 and still wasn’t even able to put a dent in Ethereum with all of that capital. This is a clear sign that you cannot buy your way into competing with Ethereum (or network effects in general). You also cannot buy a community.
Now in 2020, there’s a host of newer chains vying for Ethereum’s top spot including Polkadot, Cardano, Algorand, Zilliqa, Solana, NEAR and many more. The one thing that all of these chains have in common is that they are actually not currently fighting for Ethereum’s top spot - they are fighting each-other for the chance to fight Ethereum for the top spot. This leads to massive fragmentation across these different chains with the foundations responsible for developing them having to basically try to out-bid each-other for user acquisition, developers, community mindshare and more.
While the other chains have been fighting among themselves for 3+ years, Ethereum has continued to extend its lead over all other platforms - especially with the growth of DeFi (which didn’t even exist in 2017) and the development of layer 2 scaling technologies + eth2. The Ethereum network is even in higher demand than Bitcoin as fees on Ethereum have been higher than those on Bitcoin for almost 2 months now.
I’ve also been noticing lately that these chains recognize that they will all have to build bridges to Ethereum to tap into its ecosystem whether they like it or not. By doing so, they further reinforce the network and liquidity effect that Ethereum has. If I had to use a crude analogy, I’d say that Ethereum is a central hub like New York City or Silicon Valley that other cities “bridge into” in order to tap into their ecosystems.
You’ve probably been thinking while reading this that I sound like some “Ethereum maximalist” which I understand and you’re probably not wrong to think that. But a key point of difference here is that I don’t think any of the other chains are scams or completely useless - I just think the Ethereum has already won given the fact that it has such a massive lead over the competition (and hasn’t stopped innovating). Not only are these “Ethereum killers” competing with each-other, they are also competing with eth1 (base chain & layer 2) and eth2 while trying to build out an ecosystem of their own.
In the end, if Ethereum gets dethroned with such a massive head start, then it deserves to lose.
Have a great day everyone,
Anthony Sassano
All information presented above is for educational purposes only and should not be taken as investment advice.
Excellent article