When looking at Ethereum, there are some good things I can say about it and some bad. Ethereum did early stage investors in their ICO right, in the fact that the 2014 ICO price was $0.30.
This is a plus side for them. Also, their technology isn’t all bad. The use-cases they have of bringing smart contracts more mainstream is a plus. However, there are multiple reasons to believe that calling Ethereum decentralized sort of waters down the definition of decentralization.
You have a series of incidents in the past, and in my opinion technological barriers that prevent it from being a truly decentralized cryptocurrency.
I wanted to start out with the fact that Ethereum isn’t yet built enough to handle data heavy or enterprise level applications. Many people remember when the game CryptoKitties clogged their network.
Infact, the CryptoKitties example actually jammed Ethereum’s network in the past, and during that time period transaction processing times were dramatically slow. If a semi-popular app can do this much damage to Ethereum’s network, this makes one question its decentralization capabilities.
Another problem that you have is that Ethereum relies heavily on cloud usage. True this problem is still prominent even in Bitcoin, but for running Ethereum’s network the problem is much worse.
At one point more than 60% of all Ethereum nodes relied on cloud services, and almost 25% was ran on AWS. This means the big corporations that people are trying to shift away from in favor of decentralization actually have a large amount of control on these forms of alternative tech.
This is whether they know it or not. Obviously, this isn’t what many people expected when they thought of a decentralized future.
Also you have another problem. If you look at Ethereum Classic, ETC has a hard cap/max supply on the total number of coins. Ethereum in itself however, has no max cap as of the time I am writing this.
This means that the Ethereum development team haven’t set a max supply and it is more prune to hyperinfalation. Outside of a 51% attack, someone can try attacking Ethereum’s hashing power while new Ethereum is being circulated and recieve more uncle blocks as rewards.
This is different than a 51% attack, because a centralized hashing attack that doesn’t necessarily need 51% hashing can still be done when new Ethereum is being circulated. Also, this gives Vitalik more control than other cryptos give to development teams that have a set max supply. The nature of no max supply is centralized in that aspect as well.
Besides this, Ethereum moderators do seem to be engaging in forms of censorship.
On the Ethereum subreddit, when I posted a question in regards to the Ethereum hard cap, it was immediately removed by moderators without warning. True, it could have been phrased more nicely. A majority of Reddit users in the r/FreeSpeech subreddit, agreed that yes, this was a form of censorship. It also made for interesting discussion in the r/Censorship subreddit.
After it was removed, many people suggested that it is because the “question could have been worded nicer” or tried giving it an excuse. However later on, I tried posting a link to an article where security researchers pointed out critical flaws in some of Ethereum’s tech.
It was just a blog post by crypto journalist covering it, and the link was shadow banned on the Ethereum subreddit. This happened withing a 38 minute time frame.
Now I get that some people can argue that this is a form of moderation, and so on. However, the fact that Vitalik made a video seen here:
Complaining about r/Bitcoin censorship makes this look way worse. Other people also had similar experiences, and many people find it difficult to openly discuss criticisms regarding Ethereum’s technology. The exact quote from Vitalik Buterin in his video that I want to point out is:
I definitely think the censorship on the /r/bitcoin subreddit is very unfortunate. And I do think it’s very contrary to the kind of values that we want to have and support in the cryptocurrency and blockchain ecosystem.
So far Ethereum has been looked at as pro-free speech and decentralized. This makes one wonder that if Ethereum can’t take open criticism on small forums, what would it do if given large scale trust? This is also someone who is saying that blockchains will discourage monopolies.
Vitalik also portrayed some questionable claims previously to founding Ethereum. This includes claiming to eventually be able to run Quantum simulations in a classical computer.
A post regarding this can be seen here, as well as a response on Twitter from cryptographer Adam Beck seen below.
Besides this, you have people still questioning Ethereum’s governance model up until now, and how large of a role Vitalik has in regards to Ethereum coming into question.
Now don’t get me wrong, I been interested in the cryptocurrency world and its underling technologies since 2011. I’m not new to this space. I also think Vitalik did some good things including increasing the popularity of cryptocurrency adaption.
However as someone in the same space, whose working on a Decentralized Internet, I feel it is fair to bring up some concerns in regards to Ethereum’s decentralization and trust of its ecosystem.
Overall Vitalik still seems like a good guy, but the crypto community still wants lots of answers.
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