Source: Lightning HSL
Since the 85 crash, there has been bad news about ETH and various FUDs on x every day. The most typical ones are:
1.Sol is going to defeat Ether.
2.L2 reduces the commercial value of ETH.
3. Ethereum has no innovation.
4. Wall Street only hypes up BTC, not ETH.
In fact, I think that all these FUDs have not touched the essence of a blockchain, or these criticisms have not touched on the key points, but only talked about some details or speculations without solid reasons.
For now, I still think that the Ethereum blockchain is very healthy, but its price performance lags behind the expectations of most investors.
The key to evaluating whether a chain is good or not is the three key points that cryptocurrency and blockchain promise to users:
1. Decentralization
2. Permissionless
3. Scalable
Among the many chains evaluated so far, only Ethereum has achieved these three points and has been put into production practice.
We can evaluate the degree of decentralization of a chain from multiple dimensions.
The first step is to assess whether there is a force that can effectively force the shutdown or killing of a chain.
The most amazing example of this is Bitcoin, where law enforcement forcibly shut down a large number of mining pools and mines in a very short period of time, but Bitcoin continued to operate normally. Ethereum also experienced a similar impact at the time, but now Ethereum has changed from PoW to PoS.
At present, it is hard to imagine any force that can shut down Ethereum. However, I think it is difficult to shut down most chains, which is the characteristic of blockchain.
Secondly, we can evaluate whether the mining nodes of the chain’s production blocks are decentralized.
Ethereum's PoS mining is often reported to be too centralized, especially the Lido mining pool, which occupies too much of the market share, but it is still less than 30%, which is completely safe at the algorithm level.
Mining, a commercial activity, often leads to centralization due to the demand for efficiency. In fact, the degree of centralization of Bitcoin mining pools is far greater than that of Ethereum. There are only four Bitcoin mining pools that produce blocks completely independently.
Mining centralization is a problem that almost all chains have to face, but Ethereum is now the best among the leading chains.
Another factor of decentralization is whether the developers are centralized.
The power of blockchain node software developers is very large, because the code they write is the rules for the chain to run. If the centralized development team is controlled by a mysterious force and directly embeds the coin-stealing code in the code, then it will be over.
Ethereum's current node software is divided into two parts: the execution layer and the consensus layer. It is very complicated. When the beacon chain was first launched, I thought it was so complicated that there might be few teams on the planet that could maintain and develop a complete Ethereum node.
But now it seems that in Ethereum, which has such great commercial value, so many commercial companies have parasitized their businesses on the Ethereum chain, and naturally multiple independent complete nodes have been born. Now there are four relatively mature applications, instead of relying solely on the direct development team of the Ethereum Foundation.
In terms of the degree of decentralization of the development and maintenance of complete nodes, Ethereum is the most successful among all chains, even more successful than BTC.
I feel that many users and investors of Ethereum may have completely misunderstood the degree of decentralization of Ethereum. Now on x.com, there are often people praying to Vitalik, hoping that Vitalik will come out to work and persuading Vitalik not to sell the coins.
This is totally unlike what a decentralized community should do. A decentralized blockchain does not need gods, nor should there be gods. Those users who pray to Vitalik should invest in stocks, as the stock market has a central node to pray for blessings.
Whether or not permissionlessness can be maintained is the real challenge for blockchain and cryptocurrency today.
Because almost all crypto users have registered with exchanges and have undergone KYC, exchanges hold a huge amount of coins, and exchanges are subject to regulation, especially from the United States.
Even the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) manages a list, the "Specially Designated Nationals and Blocked Persons List (SDN List)", to which OFAC adds individuals and entities suspected of engaging in illegal activities. There are some encrypted digital currency addresses and some IP addresses on this list.
As for the planets and IPs that are on this list, other companies will not dare to provide services for them, including refusing to include package-related transactions.
Various institutions in the crypto, such as exchanges, mining pools, wallets, block browsers..., after Binance admitted the penalty, I feel that as long as we can find responsible people or institutions, they will be added to this list. In other words, the people, addresses, and IPs on the list may find it difficult to use Bitcoin.
It is said that all Bitcoin and Ethereum real-name mining pools are now included in this list.
This is the biggest threat to permissionlessness.
There is also the Tornado project, which has been blacklisted by the exchange. Some exchanges will refuse to provide services to any address that has used Tornado to launder coins, and may even directly ban the relevant accounts.
But for now, Ethereum's permissionlessness has been maintained. At least we can see that Tornado is still usable. This thing is really decentralized. It has been banned by a certain US government department, but it can still be used.
But now it is becoming more and more challenging.
Now there are many projects in the Ethereum ecosystem, and more and more projects are beginning to review users, especially stablecoins like USDT and USDC, including Dai, which has a blacklist after being upgraded to USDS. This is not a good trend.
In general, from a horizontal perspective, Ethereum is the best in terms of permissionlessness. After all, its economic ecosystem is the most prosperous and it is hidden in the city. If you want to find fault with permissionlessness, I think it is the hardest to find fault with Ethereum.
However, for technologically powerful coins like Monero, their economic ecosystem is too poor, so their practical value without permission is actually not great.
Finally, it’s scalable.
Thanks to the support of Rollup, Ethereum has completely solved the scalability problem.
In the past, the Ethereum chain was fully loaded and could only process 15 transactions per second.
Now, including the transactions in Rollup, it is estimated that the TPS (upper limit of transactions that can be packaged per second) of the entire Ethereum system has exceeded 1000. Arbitrum has achieved 100+ TPS in actual operation.
Although many critics say that L1 sharding is better than L1+L2 in terms of expansion solutions, those sharding technology chains, such as MultiversX, have not been verified in actual production environments. BCH developers also claim that they have completed the Adaptive Blocksize Limit Algorithm upgrade and BCH has solved the scalability problem, but this still has not accepted the actual production link challenge.
Under the scalability requirements of blockchain, Ethereum is currently the only blockchain that is truly widely used and has been challenged by long-term and truly diverse transaction volumes that have exploded its blocks.
Sol did accept the challenge, but he did fail many times.
The price performance is not good.
Perhaps, in the context of the ETF year, in the short term, prices mainly depend on the pursuit and recognition of large Wall Street institutions, and these financial institutions on Wall Street may not care about features such as decentralization, permissionlessness, and scalability.
