A blockchain wonk has gone pundit in a TechCrunch article, predicting that Ethereum’s ETH asset will eventually crash to zero forever. In an unexpected twist, Ethereum co-founder Vitalik Buterin mostly agrees.
Jeremy Rubin, the Bitcoin Core contributor who’s lately advising Stellar, launched a public critique of Ethereum and how it operates, calling for the network’s cryptocurrency to ultimately be worthless. He draws a clear distinction between the technology that powers the Ethereum network and the digital asset that represents value moving through it. The kernel of his “ETH to zero” argument revolves around network scalability and security issues that will hold Ethereum back as competitors move ahead.
Rubin also invokes the term “economic abstraction,” which refers to smart contract owners paying their transaction fees (they call it “gas”) with an ERC-20 token other than ETH. When those fees can be covered with other “currencies,” ETH becomes redundant and can only lose value. In the long term, that means zero.
Buterin didn’t take long to respond on Reddit. “In Ethereum as it presently exists, this is absolutely true,” he wrote, “and in fact, if Ethereum were not to change, all parts of the author’s argument […] would be correct.” Buterin clarifies that the Ethereum community is considering two different ways forward that could solve the problems Rubin describes. Mere proposals for now, these implementations would preserve ETH at a native level on the network and do away with paying gas in other ERC-20 tokens.
As long as Ethereum is able to grow, adapt, and evolve, goes the thinking, then Rubin’s critique is for naught. And as a distinctly open-source software project with a large, highly technical community attached to it, Ethereum’s continued development is inevitable.
“I obviously have every incentive to disagree with this,” Buterin wrote, “but I think there are quite a few very critical economic and technical details that the article is missing.”