Ethereum’s Struggle to Stay True to Its Original Vision
Since its launch in 2015, Ethereum has evolved from a groundbreaking concept to the foundational layer for thousands of decentralized applications (dApps). Yet, with competition intensifying from blockchains like Solana and Bitcoin, the network seems to be faltering, losing sight of its grand vision of becoming the “World Computer.”
It was never designed to be the fastest or cheapest blockchain. Instead, it was envisioned as a universal platform for decentralized apps and smart contracts, accessible to anyone, anywhere. However, amid the industry’s changing landscape, it appears to be stretched in multiple directions, chasing various trends instead of focusing on its core ambition. This raises a critical question: Has Ethereum lost its way?
The Price Problem and Market Distraction
The network’s token, ETH, remains far from reclaiming its all-time high of $4,700 set in 2021. As of now, ETH hovers below $2,500, which has led many to wonder if the network’s underperformance is tied to its shift away from its original goals. Ethereum’s value has become intertwined with fleeting market trends, ranging from NFTs to the hype surrounding Layer 2 solutions, which has diverted attention from the network’s foundational purpose.
Péter Szilágyi, the company’s team lead, summarized the situation succinctly: “Ethereum is losing the plot.” The blockchain has tried to juggle various priorities, from competing with Bitcoin’s “ultrasound money” narrative to keeping pace with Solana’s faster execution speeds. While these objectives might have some merit, Ethereum was never meant to be defined by them.
Moreover, the deflationary status, achieved through ETH burning mechanisms, has been called into question as its inflation rate reaches 0.74%. While some advocate for maintaining Ethereum’s deflationary nature, the original intent was not to become a “hard money” alternative to Bitcoin. The company’s true purpose has always been much larger: to create an open, decentralized network that powers a vast array of applications, not just currency transfers.
Also read: MicroStrategy Seeks Bitcoin Advocate to Champion Corporate Crypto Adoption
The Need to Return to Infrastructure
At its core, it was built to be a decentralized infrastructure, not a short-term solution for transactional efficiency or low fees. Vitalik Buterin, the co-founder, envisioned the network as a “World Computer”—a platform where decentralized applications could be built and operated globally. The shift toward trendy narratives like competing with Solana or focusing too much on token economics is sidetracking Ethereum from its real strength: its infrastructure.
Despite the current slowdown, the network’s infrastructure continues to show signs of progress. Secondary and tertiary networks are being developed to feed into the Ethereum ecosystem, suggesting that the backbone of the network is becoming stronger. Even large enterprises are now leaning toward permissionless networks like Ethereum, as developing on public blockchains has become more cost-effective and secure.
However, Ethereum’s growth is being slowed down by its focus on applications with limited usability and clunky user interfaces. Many dApps on Ethereum, while generating initial excitement, struggle with long-term adoption, often siloed within various Layer 2 networks. Ethereum cannot realize its ambition of becoming the World Computer without practical, user-friendly applications that attract a broader audience beyond crypto enthusiasts.
Overcoming the “Scaling Roadmap” Hurdle
The network’s current challenges are largely tied to its slow progress on scaling solutions. The network is in a transitional phase, where technologies like zkSTARKs, account abstraction, and the unification of Layer 2s are still in development. This period, while less exciting than Ethereum’s early days, is essential for the network’s long-term success.
Ethereum is essentially having its “Lightning moment,” similar to Bitcoin’s struggle before the Lightning Network enabled faster transactions. Ethereum must focus on its infrastructure and scaling solutions rather than chasing market trends. One promising upgrade, “The Purge,” is set to roll out in late 2024. This upgrade aims to reduce technical debt by clearing Ethereum’s historical state, potentially lowering network costs and streamlining participation.
However, there’s a tradeoff. Simplifying the company’s state may leave the network more reliant on centralized entities for data storage, which undermines its decentralized ethos. Decentralized long-term data availability solutions will be crucial to avoid turning Ethereum into a more centralized, data-driven chain.
A Path Forward: Infrastructure Over Trends
For it to get back on track, it must refocus on building the robust infrastructure needed to support decentralized computing on a global scale. The network’s ambitions are still within reach, but they can only be realized by cutting through the short-term noise and concentrating on the long-term development of scalable and accessible infrastructure.
With upcoming upgrades like “The Purge” and “Pectra,” the network has the potential to reestablish itself as the World Computer, capable of supporting decentralized applications for everyone. The key will be resisting the urge to chase trends and instead doubling down on infrastructure improvements.
Ethereum’s future lies in its ability to offer decentralized computing power to the world. As scaling solutions and decentralized data availability improve, Ethereum will be positioned to reclaim its original vision and solidify its role as the backbone of Web3.
