Ethereum and Computer Language
Bitflate is a cryptocurrency with constant inflation of 7% per year.
This article reflects the author’s opinion, not the Bitflate community.
When I first got into crypto in 2017, the first project I looked at was Ethereum (ETH). It captured a lot of attention from the market. I’m a developer so I have the skills to dig around an ETH development framework, such as Truffle. I find the whole ecosystem confusing. The idea of a smart contract and programmable blockchain sounds fancy. But like many things in software, fancy is a gloss for complex technology that doesn’t work. I followed ETH development. I didn’t find a good and simple use case that really gains adoption. I think CryptoKitties was probably the most notable project.
After ETH, I studied Bitcoin (BTC). I find it is more focused. BTC only wants to be money, in particular, digital gold. BTC clearly captured this market. ETH is a research project. ETH is general-purpose and programmable. It lacks focus. Their leaders often change the narrative and pitch endless new ideas.
It is easy to go down the rabbit hole and attack each other. Some readers challenge my view of ETH. I write this article to explain my view about its prospects in the market.
Three success factors in crypto: use case, use case, use case
I use this real estate adage (location, location, location) to emphasize the importance of use case. Cryptocurrency is a new space. The most important factor that determines long-term success for crypto is the use case. For example, Bitcoin (BTC) is digital gold. zcash and Monero are privacy coins. Dogecoin is a meme, fun, tip coin. Bitflate is inflating coin.
ETH pitch is general-purpose, programmable blockchain. It is supposed to conquer all markets. But since it is general-purpose, it doesn’t do anything particularly well. In a digital gold use case, it is trailing far behind Bitcoin. Its programmable capability opens a gateway for scams. Post ICO craze, ETH community has moved on to the next pitch, decentralized finance, DeFi.
It is easy to look at ETH history and point out many flaws. But if we think of it as an experimental, research project, we can learn some things from it. I suspect BTC sidechain idea is an effort to compete with ETH. Not everything in ETH is bad. But how do we gauge its success? From my software background, comparing ETH to computer language will give us some glimpse about ETH prospect.
Ethereum as computer language
Ethereum is a programmable blockchain. It’s supposed to be programmable, like a computer language. I find they share similarities. Computer language is obviously programmable :). One lesser known fact about computer language is almost all of them are general purpose. That means you can actually program anything with a particular language. For example, Java is a high level programming language. But it’s possible to program an operating using Java. This is an interesting feature but it is also very confusing. Occasionally, people will use programming language in very different use cases.
Programming language shines in specific use case
Each language is optimized and used for a very specific market. For example, when it comes to the operating system, the dominant language is C. In the enterprise software application, it is Java. PHP is a language that is used for web development. It doesn’t find much use outside of web development. In some cases, we find languages with multiple use cases. For example, Python started out as a scripting language, then it got adopted for web applications, and recently data science.
Drawing from computer language analogy, for ETH to succeed, it needs to find a specific use case. If the ETH community keeps pitching general-purpose blockchain, they diminish ETH long term prospects.
It is possible for Ethereum to be general-purpose for a long time. It can be a fun research project for many years. Eventually, somebody will come up with a working scenario. This occasionally happens in computer language. Ruby is a lesser-known programming language. It was invented in 1995. It did not find any success until around 2005. Interest in Ruby surged because a programmer, David Heinemeier Hansson (DHH), invented Rails, a new way to program web application. He decided to use Ruby as the underlying language.
Perhaps, around the year 2025, an Ethereum DHH will appear and figure out a cool use case for Ethereum. Even then, it is good to remember that even with Ruby, its use case is limited to Rails. The applicable Ethereum use case will be very specific. It will not be what we see today in the market.
Disclosure: I’m long Bitcoin (BTC) and Biflate (BFL).