Ethereum 2.0 - Dead on Arrival

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Avatar for ThomasWolf
1 year ago

It’s fair to say that the future of Proof of Work (PoW) currencies is at stake, pun intended.

“You build on failure. You use it as a stepping stone. Close the door on the past. You don't try to forget the mistakes, but you don't dwell on it. You don't let it have any of your energy, or any of your time, or any of your space.” ― Johnny Cash

In one swift motion to move to Proof of Stake (PoS), Ethereum has rendered itself pointless - unless paying insane fees for use-cases other chains can perform for low fees is your cup of tea.  I fully support Proof of Stake currencies and switches, such as with ZCash (ZEC), however, that is under the assumption that the benefits of PoS come with the switch.

Ethereum 2.0 (ETH) just did the world a big favor by cutting power usage at a time when energy is a hot commodity, especially in areas of Europe that are being dramatically affected by Russian efforts to remove western sanctions by cutting off their gas supplies, winter is coming and we’re seeing record high temperatures.  The USA will not remove Russian sanctions, if anything, they will add more.

Meanwhile, Ethereum, which Vitalik Buterin said was only 55% to its PoS goals upon the PoS switch, has lost its use case incentives.  Ethereum killers are eyeing ETH 2.0 like it’s an injured bully on the playground, ready for revenge.  PoW miners are almost entirely unprofitable unless you get free ASICs, GPUs, and electricity, anyway.

This comes at a time when the US government is threatening to ban Bitcoin (BTC) and cryptocurrency mining due to its massive power consumption and potential threat to the US Dollar.  I’m sure there are plenty of ETH maximalists out there who would argue, but please, leave a valid argument and I wish you luck with that.

Other currencies offer far better staking rewards and crosschains appear to be the future of blockchain.  Why would anyone invest in something that is sure to cost them more to use and profit them less?  Putting up with Dogecoin (DOGE) and Shiba Inu (SHIB) shills is painful enough, but this new meme coin is a next-level bad joke.

Unless ETH developers can rapidly and dramatically reduce transaction fees and compete with higher staking rewards, I believe we are seeing the beginning of the end for Ethereum.  I don't believe Opensea NFTs will save this currency. Who will take over do you think?  Polygon, which is already incorporated into Opensea?

I wonder where that mining hash power will go now with great curiosity.  Ravencoin?  Monero?  Zcash? Bitcoin Cash? Ethereum Classic? None of these are profitable for me to mine with a high-end GPU, but if they gain massive popularity due to the switch, they could become profitable - most likely just one of them, but which one, if any?

Additionally, hash power will migrate to Bitcoin (BTC) and make the rewards less profitable than they already are, so this move did not affect Ethereum alone, it’s going to reshape the crypto space.

Ethereum has been promising a full switch to a more functional form of PoS since 2016.  At what point are people going to wake up and say, "We want a higher standard and fewer fees, figure it out, or get out of the way."

It would appear ETH 2.0 is DOA (Dead on Arrival), and no one knows what will happen next.  I take some solace in knowing that this is good for the planet, but I imagine many people will be hurt by this as the crypto space tumbles with the pains and gains of adaptation.  Decentralized finance deserves a higher standard than what has been delivered.

The merge was nothing but an overhyped update to a massively over-marketed project.  Feel free to discuss it with me, but know that if you disagree with me, you've been lied to.  Use your ability to think both critically and objectively on this subject and ask yourself if this is what we deserve for a wait overdue by the better half of a decade, and if you still disagree, I am nothing like you.

As always, comments & suggestions are highly encouraged.

Stay smart & Stay safe.

-Thomas Wolf

Pronouns: He/Him/His

DISCLAIMER

I am not a certified financial, tax, or legal advisor, analyst, or planner.  The above information should not be considered advice but as an opinion intended to share information and ideas for entertainment and independent research purposes.  I am not responsible for any losses or damages incurred due to misinterpreting my personal opinions for professional advice.


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Avatar for ThomasWolf
1 year ago

Comments

I don't agree. Assuming that POS actually does reduce Ethereum by 99+%, that will accelerate adoption. Not everyone makes decisions based on price. In fact, smart people make decisions based on value, and Ethereum still has a lot of locked-in value for a lot of people. That's not to say that Solana, Avalanche, and Cardano can't compete on transaction fees and value, but thus far, none of them have "killed" Ethereum.

If the Merge does anything, it makes the entire crypto market less predictable. We don't know where ETH is going next. I saw a little pump and dump shortly after the Merge. Long-term, the price could skyrocket to the moon. It depends on how quickly and how widely it is used after the dust settles. Let's talk this time next year and compare notes.

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1 year ago

Only a fool would use the wrong tool at a high price.

I suppose there are plenty of fools, but that doesn't make the currency any less of a joke.

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1 year ago

A lot of people use the high-priced version of anything for a variety of reasons. Prestige, status, perception of value, just to name a few. That's why some people drive a Lexus when a Ford Taurus will do the same thing. iPhones when Android is much less expensive. If a DeFi app on Ethereum is precisely what they want, they'll pay the price to get what they want.

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1 year ago

This is not progress in the traditional sense.

I only care about the progression of decentralized finance, blockchain technology, efficiency, and functionality -- all which promote onboarding and adoption.

If new users sign up and use this crap, it is no wonder they think it's a scam.

You hate the central reserve banking BS as much as I do. How do you think Ethereum would compete with the US Dollar vs. superior alts?

No competition at all. People make money off of it, but they are shilling garbage and have ultimately been lying to people for the better half of a decade.

I stand by PoS, but what has changed outside their carbon footprint, how could they not come up with a system that reduces tx fees at the same time, instead of shilling deflation. ETH coders are brilliant, at least, I have respect for Fabian V. who has been working day and night on universal profiles with LUKSO.

The others... are not impressing me. EOS beats this crap by a long shot and you know I think Larimer is a moron. More like, I know he's a moron...

Greed knows no end with a giant project marketed to hell when it SUCKS. We have to put that to an end to have financial freedom.

I'll point out the entire time I mined Ethereum, it was on renewable energy. You know that my primary focus is environmental science after STEM undergrad. I am happy about the dirty energy falling off, but where was it sent?

There will be many butterfly effects from this switch and Ethereum will never take over Bitcoin in its current form, the merge is nothing but an overhyped update.

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1 year ago

You can have freedom or progress, but you can't have both.

Know the story of Edison and Tesla? Tesla was a brilliant scientist but a terrible business man. Edison was a good scientist and a great business man. In the end, the best ideas don't win. The ideas with the best hype win. That's simply reality. Freedom, however, let's those who know better pave an alternative path away from the mainstream. Let liberty ring.

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1 year ago

Technically almost everything in every DC-powered house runs on Tesla patents.

The induction motor. Tesla left a legacy modern scientists continue to reverse engineer successfully (Tesla coils, etc), Edison tortured animals, botched the first electric chair, and destroyed his legacy. What kind of idiot sends letters meant to be burned and signs them with his own initials? Edison, the sell-out.

You can't put a price on true genius. The price of ruining your dignity is massive, though.

Several decades later it is common knowledge that Tesla was the better man. "Because business" is not a good argument for Ethereum.

Whoever told you you can't have freedom and progress? The statement itself is counter-intuitive. Freedom is progress from where we stand now, otherwise what is the point of DeFi?

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1 year ago

More new changes should come to cryptocurrency technology adaptation and innovation.

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1 year ago

As Charles Darwin said, "It's not the strongest, most intelligent, or fastest of a species that survives, it is the one most adaptable to change."

Chains that can adapt will survive.

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1 year ago

Exactly. The stagnant blockchain applications will not survive.

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1 year ago

I think is too early to judge the new system

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1 year ago

The denial runs deep with Ethereum.

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1 year ago