Led by Ethereum, a new financial system based on blockchain technology is being built. As reality currently unveils, the foundation this new financial order is built on poses significant challenges. This is why a true new financial order built on Bitcoin is already underway.
Ethereum is commonly referred to as the pinnacle of decentralized finance (DeFi). With more and more blockchains such as Solana, Cardano or Avalanche racing to fame throughout this year, more and more cryptocurrency enthusiasts are starting to doubt whether Ethereum’s pole position as the number one DeFi chain is really beyond reach.
The reasons for the rise of these alternative blockchains are swiftly found: Ethereum has[1] turned from a hyper-inclusive idea into a hyper-exclusive blockchain for the wealthy. Its network is severely clogged[2] up, and insanely high transaction fees need to be paid to transact on Ethereum.
Another problem that keeps on plaguing Ethereum (and other smart contract platforms) are the various smart contract heists and hacks. Seemingly month after month, there is news[3] about a DeFi protocol on Ethereum having been hacked due to a smart contract vulnerability. Interestingly enough, Bitcoin’s blockchain is usually critiqued for being too rudimentary in terms of its smart contract capability, but what Bitcoin lacks in expressiveness, Ethereum appears to have too much of. Ethereum’s smart contracts are notoriously complex – one could even argue[4] that they are unnecessarily complicated because of their Turing-complete nature.
Consistently-high transaction fees congesting the blockchain, as well as continuous hacks that cost users millions, are among the chief challenges Ethereum faces. Within the Ethereum community, people are diligently working on solutions. Hotly anticipated is Ethereum 2.0. While the excitement and the hope for improvement remains, some still believe that even this total
