Recently Vitalik Buterin said “crypto communities, Etheream included, should heed these words of warning. Need to differentiate between getting hundreds of billions of dollars of digital paper wealth sloshing around and actually achieving something meaningful for society”. Seems accurate in the sense that tons of digital token and coin companies are valuing themselves by how many coins they minted. Look at Ripple, worth more than Ethereum, and because they likely have 100 Billion coins it means that they can soon be the most valued company on the planet. The next Ripple should create a Trillion coins! But, is it all really just digital money?
NO chance, its not ONLY Digital, its real green! Let’s take Ethereum. Ethereum’s gas prices are heading the same way as Bitcoin. Today, while writing this we sent 2 coins along the “Ethereum” road and after 30 minutes of trying we paid exactly $3.00 USD worth of Ether each for the pleasure. And, thats a one-way ride! Yes, that transaction cost MORE than the price of gas at the pump, and there is a lot of Real Hard costs associated with pumping petroleum out of the ground. How much does it cost to keep the Ethereum platform functioning? Is it equal to the costs of oil exploration? I just don’t think it is!
So, why is it so expensive? According to Ethereum its all about the miners. But, is that it? This system could have been set up to include a flat fee on the smart contract. Then you could actually have a chance at creating a genuine utility token for mass use. But, with a sliding scale on gas pricing: the idea that you can offer more gas to encourage a miner to put your info in the next block is old economics: the era of the “Vig”. Or, maybe that was the plan all along. Make the big money on the gas with accumulated fees and cash out the Ether. I am not buying the idea that people are really buying Ether so they can have useful platform transaction funds! what for, the rate this is going the platform will be performing the same as Bitcoin: with the same people trading the same coin from one wallet to another at 20 dollars a flip while on the other side they see their Bitcoin advance in “value”. Artificial inflation? Smells like it to me.
I think people will start to see this as a poor solution towards a utility coin and try something with fixed costs. No fixed costs and massive volatility is no way to build a value based system: as soon as you figure out the costs they go up.
I think we should be looking for another platform, one built on freedom and democracy and not on a “Vig”.