When you doubt blockchain or cryptocurrency, you’ll be parried at every corner with talk about all the wonderful use cases of blockchain technology in everything.
Blockchain is great for the supply chain. Tokenized transactions are the wave of the future. Every musician needs to mint an NFT. Smart contracts will revolutionize real estate and law.
The crypto mafia is strong with their arguments.
I don’t necessarily disagree. This could all be true – all these things require technology, and that technology could very well be blockchain based.
But it doesn’t have to be Ethereum. It doesn’t require anybody to learn Solidity. As much use as the Ethereum blockchain may have, it’s not guaranteed enterprise nor consumer adoption.
Most of these solutions already exist, and blockchain has yet to really wow anyone beyond what major tech companies are building. And it’s priced like a major tech company.
Ethereum currently has a market capitalization of about $400 billion. That makes it equivalent to a $400 billion company, except its shareholders don’t have the same rights, powers, nor protections.
There are about 1 million daily transactions on Ethereum. That’s not a lot for a $400 billion company. It’s not a lot for a revolutionary blockchain based ecosystem that’s meant for app development.
By comparison, Clubhouse is a $4 billion company with 12 million installs, 1 million daily active users, and 600,000 rooms created daily. It’s losing money.
Discord is a $7 billion company with 13.5 million servers, over 150 million users, and about 20 million active each week. It’s earning income.
Telegram has 500 million users and is valued between $3-$5 billion. It does not generate revenue yet.
Meanwhile, Facebook is a $1 trillion company with 2.85 billion monthly active users. It generated $86 billion in revenue in 2020, compared to under $10 billion generated by Ethereum miners.
As an investment, Facebook is better. It has better market penetration, and both businesses and consumers actually use its suite of apps. It can develop its own blockchain and crypto, and it has cloud servers. You’re also granted shareholder rights that Ethereum lacks.
A lot of projects originally built on Ethereum, like EOS, inevitably migrated off Ethereum in favor of their own blockchain. It was too expensive to run, and why would you pay to build someone else’s technology when you can run your own?
NEO/GAS and others do the same thing just as well. All are struggling with mass adoption.
While blockchain is a great idea and Ethereum was a great proof of concept for it, the writing is on the wall. It may have more utility and technical capability than Dogecoin, but Ethereum is not guaranteed success because of that.
I support crypto, but it’s naïve to think everyone has to use Ethereum to accomplish any of the use cases it proposes. After a decade on the market, NFT art is the most successful use case. It’ll take more than that to earn its keep.
This blog post was written by AI – learn more about AI blogging for your business.
