Ethereum’s price performance and scalability have been lackluster for quite some time now. It is no wonder, then, that the somewhat flawed design has been more often the target of criticism by many experts in the industry now.
In a blog post dubbed “Some Thoughts On Crypto” and published on September 4, Venture Capitalist Fred Wilson, who is also the co-founder and managing partner at Union Square Ventures, expressed disapproval for Vitalik’s project. He, however, had some nice words to say about the king crypto.
It pays to remember that Wilson was an ardent supporter of the Ethereum blockchain just two years ago, hence why this change of heart is unsettling for Ethereum bulls, though comes as no surprise.
A Love Story Turned Sour?
Back in 2017, Wilson predicted that Ethereum would outshine bitcoin by market cap. Clearly this has not materialized yet; Ethereum is still playing catch-up with bitcoin. In fact, Ethereum is up by only 31% from the start of 2019 while bitcoin has gained over 180% over the same period.
In 2018, his love for Ethereum began fading away. He raised eyebrows about Ethereum’s management during Fall 2018 Multicoin Summit in a video posted on Twitter by Tuur Demeester saying Ethereum was not backed by a strong team of developers and did not have enough funds for projects. In his recent post, he notes that Ethereum “confounds” him:
“Ethereum, as many of you know, confounds me. It has shown the way to so many important things; smart contracts, programmable trust-free computing, potentially proof of stake, and a lot more. But it remains hard to build on, scaling issues abound and many developers are looking elsewhere.”
Last month, Vitalik Buterin admitted that his brainchild, Ethereum, is facing scaling issues citing that the blockchain is almost full. This is one of the reasons Wilson jumped ship, certainly not unfounded.
An Existential Crisis At Scale
Despite its success in offering smart contracts and being the largest altcoin by market capitalization, Ethereum is plagued by, to some extent, an existential crisis. Even though it has stamped its own mark on the crypto industry, its goal of solving its scalability problem remains a distant dream, curtailed by its own design and growing demand.
Unfortunately, Wilson is not the only investor casting doubt on Ethereum blockchain. As ZyCrypto reported, Blockstream CSO Samson Mow recently referred to Ethereum as a “technological dead end” due to its “almost full” status that has come about because of Tether stablecoin.
In his post, Wilson notes that he’s not only disappointed with Ethereum, but also with the hard-line taken by banks and regulators worldwide which has subsequently led to the domination of the cryptocurrency industry by Asia.
The venture capitalist then goes ahead to express his displeasure about crypto not being mainstream yet:
“Very few people earn in crypto. Very few spend in crypto. Very few use Dapps. Very few do anything with crypto other than buy, sell, and mostly hold.”
Nonetheless, Wilson concludes his piece saying that he’s positive the crypto industry will repress these disappointments in a few years to come.
Long Live The Crypto King!
While Mr. Wilson remains pessimistic about Ethereum, he expresses extreme admiration for the king cryptocurrency, even touting the coin as “digital gold”. He affirmed:
“But Bitcoin now makes up almost 70% of that aggregate market cap.
In some ways, Bitcoin is the one protocol that has found lasting product-market fit. In terms of a censorship proof digital store of wealth, there is nothing that comes close to Bitcoin. There are some protocols, like the privacy-focused ones, that offer similar and in some cases better use cases. But for the most part, bitcoin is our digital gold.”