Co-founder and managing partner at Union Square Ventures Fred Wilson has always been a big fan of Ethereum, but lately, he can’t help but feel a little underwhelmed and disappointed by its performance.
Wilson: ETH Isn’t Doing So Hot
In a recent post, Wilson spoke negatively regarding the currency he once predicted would surpass bitcoin’s overall value by the end of 2017. Not only did this not happen, but bitcoin has been growing exponentially since April of this year, whereas Ethereum has fallen by roughly 23 percent over the past four months. There’s no comparison regarding how the two largest cryptocurrencies by market cap are doing; BTC is rock solid, and ETH is… Not.
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.
What Wilson states isn’t necessarily newsworthy, at this stage. Just last week, co-founder of Ethereum Vitalik Buterin emerged to state that Ethereum was no longer scalable thanks to the several blockchains and applications that were now crowding its initial network. Ethereum was among the most popular blockchain networks given its smart contracts capabilities.
This made every new coin company want to build their tokens upon the ETH system, and while many saw their dreams become realities, Ethereum is plagued with high gas fees, slow transactions and other problems given the amount of congestion it’s currently dealing with.
In the long run, Wilson is confident that there’s a lot to be had via the crypto market, though he can’t help but feel a bit down about some of the major problems he’s seeing, number one being the lack of mainstream adoption of “crypto as a payment method.” He’s also disappointed by how few projects are making the rounds.
The Risks Are Numerous
There is plenty of disappointment to be had in crypto right now. I am an optimist. I am convinced that many of these disappointments will be overcome in the next few years, but it is easy to be bearish on crypto right now. I am long crypto and USV is long crypto, and we are putting more capital into the sector and will continue to do so, but it is not without risks and setbacks. It is full of them.
No doubt there’s truth to what Wilson is saying, but it’s also plausible to take some of his verbiage with a grain of salt. Bitcoin, for example, has shot up beyond $10,800 at press time, meaning it has broken previous resistance and could continue to expand from here. Ethereum may be down for the count, but the crypto granddaddy is still going strong.