- Cardano founder identifies three critical flaws in Ethereum blockchain’s design.
- Charles Hoskinson believes layer-2 solutions will gradually drain Ethereum’s value.
- Bitcoin DeFi and competing chains are predicted to eclipse the Ethereum network long-term.
In a thought-provoking video, blockchain attorney John E. Deaton shared an alarming prediction of Charles Hoskinson, who stated that Ethereum may not survive beyond 10-15 years due to fundamental design flaws and growing competitive pressures.
Deaton expressed that the information was surprising, especially when it came from a co-founder. He quickly pointed out that he was not smart enough to have an opinion one way or the other.
In the clip, Hoskinson, the founder of Cardano and the co-founder of Ethereum, mentioned that Ethereum has three major “self-inflicted wounds” that threaten its future. These include the wrong accounting model, the wrong virtual machine, and the wrong consensus model. “All of these were self-inflicted wounds, people told them not to do it, they did it,” Hoskinson states.
Further, he stated that Ethereum’s approach to solving these inherent problems has created additional complications. Identifying the lack of effective on-chain governance as Ethereum’s third critical weakness, he suggested that it would take “five to seven years” for Ethereum to build a functional governance system, considering its scale and complexity. For comparison, he noted that Cardano already has on-chain governance that will mature significantly within three to five years.
Apart from this, Hoskinson predicted that layer-2 solutions built on top of Ethereum will increasingly drain value from the base layer. “The layer twos will continue to suckle out all of the alpha, and people will start fighting, and it’ll get harder and harder for Vitalik to be able to hold it together through sheer force of will,” he argued.
Competition from other blockchain ecosystems poses a significant threat to Ethereum’s dominance. Hoskinson compared Ethereum to MySpace and BlackBerry, dominant platforms that lost the race to competitors with superior technological approaches. “They’re being eaten alive by Solana and Swede and these other things,” he noted.
Although Hoskinson exposed the flaws for Ethereum’s potential fall, he acknowledged that it was an excellent project, hindered by its own success. Like many successful technologies, it struggles to transcend previous technologies even when there are superior alternatives. Citing the example of Perplexity, Hoskinson stated that dominant platforms can fall behind when they are unable to adapt to superior techniques. Notably, Perplexity, a search engine, challenged Google with a more advanced user experience.
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