The Ethereum ecosystem has not yet reached its full potential. Numerous issues have popped up in recent months which may be holding it back. These will need to be resolved soon for Etereum to really take off. Even Ethereum co-founder Vitalik Buterin acknowledges there are many issues which hinder the growth of Ethereum. Below are some of his views on the things that will need to be improved for the foreseeable future.
4. Holding Large Amounts
It is interesting to see the public face of Ethereum acknowledge the project suffers from issues which make it difficult for most users to hold large amounts of Ether. Buterin feels there is a significant risk of theft, mainly due to third-party wallet service providers and exchanges. There is also the chance of users losing their private keys. These are not issues unique to Ethereum, but it is something any ETH users should be aware of.
3. Privacy or Lack Thereof
Cryptocurrency is often referred to as an anonymity tool, even though both Bitcoin and Ethereum -in their current forms- are incredibly public. There is no real transaction privacy with either of these currencies. To a lot of people, that is not a big deal. Others feel differently and look for privacy-oriented solutions, such as Monero. Privacy is something developers can implement with a bit of work, which is something the Ethereum developers plan to do.
The upcoming Metropolis hard fork will introduce the basics of zk-SNARKS. This particular technology paves the way for future privacy-oriented features as part of the Ethereum ecosystem. It is a significant development. However, it may still take years before we see the first privacy-oriented features in Ethereum being embraced by average users.
2. Proof-of-Work is An Issue
Proof-of-Work does not suit Ethereum all that well. There is the 51% attack risk, selfish mining with a decent amount of hashpower, and mining itself remains very expensive. Additionally, there is the difficulty bomb which will come into effect soon. The developers want to switch to proof-of-stake in the future to avoid these issues. Proof-of-work mining is somewhat problematic for all major cryptocurrencies.
1. Scalability Sucks
Buterin actually stated how scalability “sucks.” Then again, most people are well aware of how Ethereum cannot scale to accommodate large numbers of transactions and commands at the same time. If all of the Dapps in development were to become accessible at the same time, the network could possibly go through a proverbial brain freeze. There are many different bottlenecks in blockchain technology, and Ethereum is no exception.
Individual nodes process every transaction in the entire network. That causes a major bottleneck which needs to be solved. Unfortunately, things are never as easy as they seem, especially in cryptocurrency development. It will be interesting to see how Ethereum developers will tackle this problem and whether or not it any of their solutions will work. The current scalability issue weighs Ethereum down, and desperately needs to be addressed.