Ethereum's Real Problem, Is There A Solution?

in #ethereum8 years ago

The Problem with Ethereum

Ethereum has swept the cryptocurrency world this year to become the second most valuable crypto on coinmarketcap.com. Touted as the next generation of blockchain tech that would completely revolutionize everything on the internet, or our lives for that matter.

Smart contracts that can be created and carried out autonomously, without having to trust a third party, seemed to be breakthrough in the crypto space. This computer language with a cryptocurrency morphed into a single tool, has many potential uses. It could facilitate wills, property deeds, corporations and even stock exchanges. It would streamline liquidity and increase money velocity, all while removing parasitic governments and financiers from the mix. It all sounds fantastic, but as with any experiment, the cracks don't appear until after it's underway.

The DAO Debacle

After the ICO (Initial Currency Offering), the first large scale smart contract was a "corporation" of sorts, The DAO or Digital Autonomous Organization. Built with layers of code that would simplify voting and decision making with shareholders, the project became the most successful crowd funding campaign ever. Raising over $117 million USD worth of Ether (Ethereum units), for it's DAO Tokens (shares),the virtual corporation looked to be the next best crypto investment. One that would put all its funds in other top blockchain technologies. The price of DAO tokens began to skyrocket in tandem with Ethereum. Ether hit a price around $21.50 and The DAO's market cap had ballooned from $120 million to around $225 million.

Then the Headlines Hit

"DAO Hacked" was the word, which sent ripples through the entire blockchain community. Over 3.6 million Ether, which at the time was worth over $75 million USD, had been stolen. That quickly dropped to $35 million on the news, as Ether lost half of it's value and the DAO lost as much as 75% of it's value. How is this possible? The code and blockchain are foolproof. Right?

What Really Happened

The DAO was setup to have the ability to create "child DAOs", much like a subsidiary corporation. One of the users was obviously a better and more clever coder than the DAO's creators. He used the code to simply create a child DAO, which he had control of, and move Ether into it. He didn't effectively break any laws or "hack" anything. This is the fault of the creators, whether intentional or not, the incident has forever tainted Ethereum, the DAO and any future projects on the platform.

The Realization

The complexity of Ethereum leaves it open to potential scamming. Projects with backdoor loopholes programmed in to them could be possible. Then what's the solution? Bringing in third parties to insure or regulate? That starts to defeat the whole purpose of blockchain and many investors are realizing it.

Like MS-DOS and Windows

Ethereum is like DOS and smart contracts need Windows. These problems could all be taken care of if the platform was fool proofed with a user friendly and structured platform. Will Ethereum be able to clean up the mess with hard forks and undoing code? I personally think that adds more doubt. Is there something else on the horizon to clear up these issues?

Waves Platform Could Solve These Issues

After examining the Waves Platform, it has an app and windows type feel and has the ability to do much of what Ethereum promised to do with less complexity. The creators are going to develop templates which will solve these problems. It was created with this very purpose, a user friendly interface, with endless capabilities. One that keeps the trust machine intact and worry free. 

Another major breakthrough with this cryptocurrency is that it will be the first to have USD Tokens. That means that actual US Dollars will be able to move over the blockchain, this is a completely new innovation that I think many investors are overlooking. At $0.21 currently, I believe this could be a major winner in the future. You can find out more about them here

Happy Investing,

                        C#





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