Ethereum: The founder was too naive – Ether is not suitable for the masses

Investing.com – has managed, with the and, to put the losses of the past 24 hours behind and is up 1.68% to $ 3,804 at the time of writing.

At the same time, Ethereum founder Vitalik Buterin has said that the network, in its current form, is not ready to meet future demands for a blockchain.

The current high gas costs prevent large scale application, as the costs of a transaction would outweigh the benefits. Faced with this, the network needs a Tier 1 solution that ensures performance scaling.

Last summer, update EIP-1559 brought about a breakthrough change. This forms the basis of the future merger with ETH 2.0, which will allow the entire network to follow the Proof of Stake (PoS) approach.

In 2017, Buterin still argued that a blockchain transaction should not cost more than 5 cents. Only in this way will technology be able to enter all areas of life.

Currently, this monetary base is far from established, as a transaction on Ether costs more than 100 times as much. According to EtherScan.io, the fee for a single transaction is almost $ 24.

As a result, Buterin said:

“The Ethereum Layer 1 solution is not a system ready for direct mass adoption.”

The lack of scalability of the Ether network is the main problem and one of the reasons why other blockchains like Solana, and have been so successful last year.

Indeed, at present, no one can know when or if Ethereum will ever reach the power necessary for mass use. Buterin himself had to admit that his estimate of how quickly to switch to PoS was drastically flawed.

In 2015, he expected to achieve this goal as early as 2016, which he can only laugh about today.

Ethereum technical benchmarks

On the Ether daily chart, we see that the 61.8% Fibo retracement of $ 3,662.99 continues to offer good support.

However, for the technical outlook to improve, price needs to break through the resistance of the 78.6% Fibo retracement at $ 4,191.18 to get back into the ascending trend channel.

If the bearish pressure builds again and the 61.8% retracement does not provide sufficient support, we should expect losses towards the 50 percent Fibo retracement of $ 3,292.

By Marco Oehrl

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