Ethereum and Steemit

 Before I give my thoughts on market fallout, I'd like to say that I hope this forum will find its way back to its roots. Those who have been cryptonians for long enough probably understand what I mean right away. I'm not trying to be elitest when I say that either. This place has always welcomed the comments of cryptonians of all levels of knowledge. In fact, the most insightful comments often come from newbies, because they are looking at the field with fresh eyes, and thus point out the obvious, while the experts have their heads in a rabbit hole.

Cryptocompare forums have been the only crypto forums on the internet with cordial cohesive discussions among an intellectual group of individuals with an incredibly diverse and multidisciplinary set of backgrounds. I've been involved in a single discussion with a Mathmatician, Economist, CS guy, Psychologist, Lawyer, Cryptographer, Statistician, Investment Analyst, Dentists, and a 12 year old genius, all commenting in a single cohesive discussion about topics like autonomous organizations, immutability, sharding, lottery DAPPS, Game Theory etc. I've seen experienced cryptonians help the less experienced get out of jams, like navigating how to recover their funds from both forks during the DAO hardfork, etc. The insights I have gained from my 15 months on cryptocompare have been extremely valuable. Unfortunately, I see that value slipping at the expense of a littered forum of minute to minute price parading, pump talk, and a hyper focus on price over reasons for establishing true value.

After the impending correction in the coming months, I hope we find our way back to our roots.

@dallycurtis - Trust me, I am with you on the potential of a turing topped public blockchain. However, you've constantly referred to this as the advantage Ethereum has over Bitcoin, as if they are competitors. The reality is, they are not competitors, and that is the basis of my predictions below. You are right, Ethereum is tech driven and Bitcoin was, as an experiment, just a store of value (not even a currency).

First, I'd like to clarify a common misunderstanding; Bitcoin does have the capability of applying smart contracts to its chain. However, @dallycurtis is right that Ethereum was designed from the start with this in mind, so Ethereum is naturally much more scalable with respect to smart contracts. Furthermore, I do believe in the almighty power of a global distributed ledger database that is immutable and establishes a place for legal consensus in negotiations between governments, consortium, corporations, and individuals. I also believe that in the end, there will be one primary public blockchain to rule them all. However, I believe there will be hundreds of thousands of other blockchains that synchronize with the main chain periodically. The final beast in the end will not be a blockchain, it will be more like a "BLOCKMATRIX" (yes this term is used in mathematics, but you heard the term COINED here in reference to blockchain technology first! No pun intended). Such a data structure is analogous to how the Internet is a network of networks.

Now, back the more immediate question. Is the current Ethereum blockchain capable of becoming that single public blockchain to rule them all, and if so, what needs to happen to make it happen. My experience with developing distributed data systems leads me in the direction of, certainly not on its current core. It is not robust enough at its core. Trust me or not, I will tell you that the Ethereum technology has not changed during this last 3 month feeding frenzy (nor 9 months for that matter). However, let's assume that without major changes to its core, it is capable. What will need to happen.

Well, for Ethereum to be a successful grand public blockchain to rule them all, it will need to do a few things:

1. it will need to be easy to develop ORGANIC applications on it. Currently, it is not. All software developers know that developing an application is an eternal cyclic process of improvement, not a destination. As of now, there is no easy way to do 'agile development' on the Ethereum blockchain. This is ironically a product of the immutable nature of the Ethereum blockchain. Once you release a DAPP on the chain, and users create contracts using the DAPP, is it fair to make substantial changes to the DAPP? No, you can't do it without changing the rules that all the existing contracts are based upon. This is the fundamental reason the DAO failed, and since then there have been no substantial changes to the Ethereum Core (sure they've consolidated blocks to reduce block size, but is that major?).

2. it will need to be cheap to develop and execute applications and contracts. Anyone who has written a non-exchange type dapplication on the Ethereum Blockchain is now paying a 10 fold higher price to continue on-chain development of that application. Sure, much of the development can be done off chain, but ask any developer about the advantages of agile development over waterfall development. Agile development is how Vlad (@zerocool86) built and continues to build CryptoCompare at such a rapid pace. Agile development is how my buddy and I beat Friendster in 2004. Yet, this type of development will not be possible on the Ethereum network without tremendous cost (unpredictable cost too).

The solution to these issues is for a main blockchain to have a way for other slave blockchains to plug into it for consensus -- a BlockMatrix or BlockCloud. While this may be a possibility for the current Ethereum chain, I don't see it being done easily without fixing its foundation. Fixing the foundation of this beast will not be fast. Someone else will likely do it from scratch much faster, much like how Facebook beat us.

What about Bitcoin, it can't do these high tech things either? @dallycurtis keeps saying that Ethereum is so much more technologically advanced than Bitcoin, and that is why we should all jump on ETH wagon. Well, Ethereum is also way more technologically advanced than a paper $100 bill. But, currently if you go to any average Joe on the street and you offer them a choice between a $100 bill or 1 ETH, 99.9% of them will take the paper $100. Why? TRUST.

Bitcoin has been around. It's been through multiple bubbles and a crashes, and recovered every time. BTC will continue to be more volatile than Fiat for a while, but the reality is, it is more established than ETH as a trusted store of value among the expert crypto community. Just like that average Joe on the street trusts the $100 bill more than 1 ETH (erroneously), the average crypto enthusiast will run back to BTC as a trusted store of value. Until USD betrays the average Joe's trust (which it will), he will trust it. In the same way, until BTC betrays the average crypto enthusiasts' trust, she will trust it more than any alt coin. And, I don't see BTC betraying that trust any time soon; it's volatility has dropped dramatically in the last 2 years. I can't say the same for ETH.

It's not just an artifact of BTC being the first comer either. As many excited newbies keep correctly stating, Ethereum is more technologically advanced. However, the principle of Occam's Razor applies to currency and asset storage (see charactaristics of currency). BTC is running on a much more simple engine. Ethereum's role as a technologically superior platform for purposes OTHER THAN currency or wealth storage is the very thing that makes ETH less reliable as a simple store of value. ETH being younger and more technologically advanced makes it more susceptible to forks, attacks, and yes speculative collapses in value.

I leave you with the following thought experiment. If there is a run on the Exchanges for Fiat currency, and the exchanges freeze Fiat withdrawals, and there is a subsequent crash in crypto, your only choice will be which crypto to run to. Given that the volitility of all alt coins is way higher than BTC, in an impending crash scenario driven by Exchange failures, what crypocurrency would you choose?

So, my suggestion is. Keep some ETH, but when the alt coin crash of 2017 occurs, BTC will initially fall as well, but it will hurt far less, due to shear REAL influx volume from altcoin sales. It may even go up.

My friends, TRUST, that is what it comes down to in the currency world. ETH is about to betray the trust of a lot of newcomers, and that will be painful for me to watch, since I truly do believe in the Ethereum technology.