The Problem With Ethereum... Yup that is an extensive title shortened to four words... In recent years, the Ethereum token has been getting a bad name. Over the last two years, (since 2021) many people have become frustrated with Ethereum, and for good reason.
Ethereum is a cryptocurrency that runs on blockchain technology, and it is used for a variety of decentralized applications. The problem with Ethereum is that it has been suffering from high gas fees and an unreliable network, making it at times quite difficult for users to access and use the platform, blockchain, network... you name it Ethereum has probably choked on it.
To understand the problem with Ethereum, we must first understand what Ethereum is. Ethereum is an open-source blockchain platform that enables developers to build and deploy decentralized applications (DApps) on top of it. The platform uses smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. Ethereum is unique in that it allows developers to create custom tokens and decentralized exchanges (DEXs) on top of its blockchain. This has led to a proliferation of different tokens and DEXs, which in turn has made Ethereum one of the most popular blockchain platforms in the world.
Brace Yourself For Confusion
One of the biggest criticisms of Ethereum has and pretty much have been the constant high gas fees. Gas fees are the transaction fees required to process and validate transactions on the Ethereum blockchain. These fees are paid in Ether (ETH), the native cryptocurrency of the Ethereum network. Gas fees are/where used to incentivize the miners who validate/validated (there are forks still mining such as ETHW) transactions and maintain the network. They are/were determined by the amount of computational power required to execute a particular transaction. The more complex the transaction, the more expensive the gas fee will be. This means that users have/had to pay high fees just to access and use the platform, which can be frustrating for many users, particularly those who are new to the cryptocurrency space... the forks... the forks... remember this for future reference; Ethereum Proof-of-Work aka ETHW... still mining... confused? Yup - Ethereum!
As the popularity of Ethereum grew, the platform became increasingly popular with developers, which put pressure on the network. The increase in demand led to congestion on the network, which caused slower transaction times and higher gas fees. The result was an unreliable network that was frustrating for users, particularly when they were trying to execute time-sensitive transactions... proper rip your hair out frustrating at times. A change was coming...
Merge Mayhem
Meanwhile Ethereum Devs had been planning to move from Proof-of-Work (PoW) to Proof-of-Stake (PoS) for quite some time, the transition had been taking longer than many had hoped, which in turn further contributed to high gas fees and the frustrations of a further busy, unstable, unreliable network.
PoW? PoS? Wake Grandad Up Someone!
PoW is the original consensus algorithm used by most cryptocurrencies, including Bitcoin (also *coff* not without its problems) and of course ex-Ethereum... like a good old divorce.
PoS is a newer consensus algorithm that is more energy-efficient and scalable. PoS is designed to be less resource-intensive than PoW, meaning it is less reliant on large amounts of computational power to validate transactions.
The move from PoW to PoS was initially expected to happen in 2020 but was later postponed to 2022. However, Ethereum developers then revealed that the transition will be delayed even further, with the full implementation of PoS not expected until late 2023. This delay was like a toothache, and painfully frustrated many Ethereum users who were by then looking for that promised land of a more reliable and cost-effective network... Yup Ethereum!
The Murder of Merger, Upgrades... PoS Pain
Another major problem with Ethereum has been the issue of scalability. While Ethereum was initially designed to be scalable, the increase in demand has put pressure on the network, causing slow transaction times and high gas fees. This has contributed to a situation where only wealthy individuals can afford to use the platform, and many new users are priced out. As more and more decentralized applications and tokens are deployed on Ethereum, the demand for network resources will only continue to grow, which will place further pressure on the network.
The problem with Ethereum is not limited to just high gas fees and an unreliable network. Some users have also criticised Ethereum for its lack of privacy and the amount of data it collects about its users. While Ethereum is more private than Bitcoin, it is still far from being a truly private cryptocurrency. This has led to concerns among users who were looking for a more private cryptocurrency option. Along came the cures... the Ethereum PoS Merger, Upgrades and the Shanghai Upgrade... What??? Yup... Ethereum!
The Ethereum network is currently still in the process of transitioning from a Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS). This transition is known as the Ethereum PoS (Proof-of-Stake) Merger, and it represents a major upgrade to the network's infrastructure.
The Ethereum PoS Merger involves the integration of the Beacon Chain (which runs on PoS) with the Ethereum 1.0 chain (which runs on PoW). This integration allows Ethereum to operate on a PoS consensus mechanism, which will make the network more energy-efficient and scalable... it's not a word-salad... Yup... you guessed it... Ethereum!
Transitioning
The first phase of the Ethereum PoS Merger occurred on December 1st, 2020, with the launch of the Beacon Chain. The Beacon Chain is responsible for managing the validators (nodes that validate transactions on the PoS network) and ensures that they are following the protocol.
The second phase of the Ethereum PoS Merger involved the merge between the Beacon Chain and the Ethereum 1.0 chain. This move had been expected to happen sometime in 2022 and required a hard fork to the Ethereum network.
In addition to the Ethereum PoS Merger, there are several other major upgrades on Ethereum network. One of these upgrades is the London hard fork, which introduces several new features to the Ethereum network, including the EIP-1559 proposal, which aims to reduce gas fees and make the network more predictable.
Another important upgrade is the Shanghai Upgrade, which introduces several new features, including the implementation of the Proof-of-Stake consensus mechanism, and the introduction of sharding, which will improve the scalability of the Ethereum network.
Are Issues And Fees Resolved?
Ethereum has seen many issues of scalability. While Ethereum was initially designed to be scalable, the increase in demand had put pressure on the network, causing slow transaction times and high gas fees. This has contributed to a situation where only wealthier individuals could afford to use the platform, and many new users were priced out. As more and more decentralized applications and tokens are deployed on Ethereum, the demand for network resources will only continue to grow, which would only place further pressure on the network... all these tweeks and upgrades hopefully resolve the issues quickly.
The problem with Ethereum is not limited to just high gas fees and an unreliable network. Some users have also criticised Ethereum for its lack of privacy and the amount of data it collects about its users. While Ethereum is more private than Bitcoin, it is still far from being a truly private cryptocurrency. This has led to concerns among users who are looking for a more private cryptocurrency option.
The finished upgrades are expected to improve the overall user experience on the Ethereum network and attract more developers and users to the decentralized platform. Many people are still very optimistic about the future of Ethereum, and there is positive hope that the issues that have plagued the platform will be resolved in the years, maybe months to come.
