Ethereum investors lose confidence in ETH as scaling issues persist

Venture capitalist Fred Wilson once believed that Ethereum would surpass the market capitalization of Bitcoin. Yet, persistent scaling problems are causing former advocates to revise their opinions. Investors seem to agree, with ETH trading at historic lows against BTC.

“Hard to build on”

Fred Wilson, co-founder and managing partner at Union Square Ventures, used to think that Ether would surpass the market capitalization of Bitcoin. Now, the venture capitalist believes that even though the technology behind Ethereum is on the cutting edge, there are many unsolved issues with the protocol impairing its adoption.

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,” wrote Wilson in a blog post.

At the moment, Ethereum is struggling with crippling congestion. The blockchain’s network utilization is currently over 90 percent, making it costly to run applications and use.

The congestion is largely a function of ETH’s 15 transactions per second bottleneck. Meanwhile, other more centralized protocols such as EOS and TRON can handle between 25 and 100 transactions per second.

“Many of the most promising and best-funded projects are massively delayed in getting to market. Some of this is that building scalable secure and decentralized protocols is not easy. But it is also true that the decentralized development approach that many of these projects are taking is not well suited to deadlines and ship dates,” continued Wilson.

Vitalik Buterin, Ethereum’s figurehead and co-founder, admitted to the limitations that could…

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