In a popular blog post titled ‘Make Ethereum Cypherpunk Again,’ Ethereum Founder, Vitalik Buterin, says the vision of a decentralized internet is being eclipsed by the challenging reality of rising transaction fees on blockchain networks.
Make Ethereum cypherpunk againhttps://t.co/qEiOcZLEeg
— vitalik.eth (@VitalikButerin) December 28, 2023
According to Buterin, the initial vision of cryptocurrency assets as a democratizing force in finance appears to be waning, with practical, everyday use cases becoming more theoretical than realized in practice. Buterin points out that discussions about ‘consumer crypto payments’ have noticeably dwindled.
These escalating fees are erecting a barrier to entry, impeding innovation, and hindering the widespread adoption of cryptocurrency as a medium for transactions and saving.
They have marginalized nearly all users except the most speculative and risk-tolerant individuals, colloquially referred to as ‘degen gamblers.’ These individuals are characterized as the only audience still willing to bear the high fees for transaction.
“But when transaction fees go to over $100, as they have during the peak of the bull markets, there is exactly one audience that remains willing to play – and in fact, because coin prices are going up and they’re getting richer, becomes even more willing to play: degen gamblers,” Buterin wrote.
“Degen gamblers can be okay in moderate doses, and I have talked to plenty of people at events who were motivated to join crypto for the money but stayed for the ideals. But when they are the largest group using the chain on a large scale, this adjusts the public perception and the crypto space’s internal culture, and leads to many of the other negatives that we have seen play out over the last few years.”
Looking ahead, Buterin advocates for introspection and proactive measures within the community. He emphasizes the necessity for scalable solutions that reduce barriers and revive the initial inclusive vision of Web3.
This challenge extends beyond technical considerations, encompassing cultural shifts that demand a return to the foundational principles that initially made the concept of decentralized digital currency appealing to a wide audience.
As for Ethereum, which has been accused of ceding its decentralization to centralized staking pools, Buterin noted various positives in 2023, including rollups, account abstraction, and Zero Knowledge Proofs which have become more common.
These are some of the technologies that can help ‘take things in a different direction going forward.’
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