Ethereum has made significant progress since its launch in 2015, evolving from a concept into the foundation for numerous decentralized applications. However, it is facing challenges as other blockchains like Bitcoin and Solana compete for its user base, causing it to lose focus on its original goals. Despite this, Ethereum’s token price has not surpassed its all-time high of $4700, which it reached in 2021, prompting questions about its direction and purpose.
Péter Szilágyi, an Ethereum Team Lead, has expressed concerns that Ethereum is “losing the plot.” The network’s inflation rate has reached 0.74%, driven by reduced transaction activity and ETH burn rate, casting doubt on its status as “ultrasound money.” While some advocate for ETH to maintain its deflationary nature, it is essential to remember that the original vision for Ethereum was not centered around becoming ultrasound money, but rather a World Computer.
Ethereum was created to be a universal network where anyone can build decentralized applications from anywhere, focusing on accessibility and interoperability. However, the ecosystem has become distracted by current trends and lost sight of this goal. The price drop below $2500 has been attributed to the lack of compelling applications on the network, leading to limited usage and slow user growth.
The network’s primary focus should be on building robust infrastructure rather than prioritizing applications. While Ethereum is making progress in developing decentralized compute and secondary networks, it is still lagging in terms of scalability. The upcoming upgrades like Pectra and The Purge are crucial for Ethereum to keep pace with other chains and handle increased activity.
To address the challenges Ethereum is facing, it needs to shift its focus back to infrastructure. By emphasizing the development of a strong global infrastructure, Ethereum can fulfill its role as the World Computer. The network’s future success will depend on its ability to scale and support decentralized compute effectively.
While Ethereum is currently at a crossroads, there is potential for it to regain momentum and fulfill its original vision. By prioritizing infrastructure development and implementing key upgrades, Ethereum can overcome its current challenges and emerge as a leading force in the decentralized application space.
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