Six floors of an event space in downtown Denver are filled with hundreds of coders and entrepreneurs who have come to discuss and celebrate the cryptocurrency Ethereum. The governors of Colorado and Wyoming wander past the rainbow wall decor and pose with the Bufficorn, a furry mascot that is a cross between a buffalo and a unicorn.
The occasion is the third annual meeting of ETHDenver, as the event is known, and it comes at a critical time for Ethereum. The cryptocurrency has long been the clear number 2 for Bitcoin, and its current circulating value is $ 30 billion, roughly a sixth of its biggest rival. Now, Ethereum is on the cusp of a major upgrade that proponents believe will overcome the congestion issues that have long plagued its network.
The outcome of the update, dubbed ETH2, will be critical to the future of Ethereum, which was launched in 2015, and whose blockchain now serves as a registry for applications, including other cryptocurrencies. It will also determine whether Ethereum remains the benchmark platform for so-called smart contracts.
The ability to create these contracts – digital agreements between parties in which the Ethereum platform will perform certain functions on your behalf – has opened up a new world in which people can turn services like investments and gambling into machines. It is a breakthrough in the face of the relatively strict restrictions of Bitcoin, whose blockchain creates a transaction log but is incapable of smart contracts.
Instead, DeFi users rely on the Ethereum blockchain to manage, record, and pay for their transactions.
According to Richard Ma, a former commodities trader who now runs a company called Quantstamp, roughly 50,000 people are already involved in DeFi activity. He predicts that this number will soon skyrocket as services become easier to use, noting that Ethereum, worth more than $ 1 billion, is already locked into smart contracts.
The mood in Denver was also upbeat thanks to Ethereum’s hyper-positive culture, which has allowed its developer community to avoid some of the schisms and infighting that have often plagued the Bitcoin world.
“Ethereum is about unicorns and rainbows. The tone of the culture is very welcoming, I never felt out of place,” says Carolyn Reckhow, chief strategy officer at tBTC, a company that extends some of the investment capabilities of the Ethereum platform. to Bitcoin holders.
Yet despite all the excitement on display in Denver, Ethereum has long been beset by broken promises. Its current price of $ 280 is less than a quarter of the $ 1,400 it reached in early 2018, while Bitcoin, by contrast, has risen back to half its all-time high.
Meanwhile, the narrative around the two currencies has changed. Cryptocurrency enthusiasts now regard Bitcoin as a “store of value” or “digital gold,” while Ethereum’s value is more closely related to the performance of its platform, which has become a kind of operating system for the largest cryptocurrency industry.
But even as Ethereum has become the backbone of the rest of the industry, it has failed to overcome a slow architecture that can only process 15 transactions per second. In comparison, networks like Visa can process thousands during the same amount of time.
“If they discover scale, Ethereum will be in an amazing place. If they don’t, various other blockchains are very scalable,” says Erik Voorhees, a well-known early Bitcoin entrepreneur, who cited lesser-known Ethereum Cosmos alternatives, Cardano. . and Tezos.
Voorhees also warned that if Ethereum doesn’t fix its congestion problems in the near future, the hundreds of enthusiastic developers filling the Denver venue would turn to a rival project.
A key figure likely to influence Ethereum’s ultimate success or failure is Vitalik Buterin, author of a paper describing the project in 2013 when he was only 19 years old. A tall, lanky figure who likes to sport t-shirts and bags adorned with animated creatures, Buterin remains the intellectual and spiritual figure of the Ethereum community.
In Denver, he appeared on stage with children and Colorado Governor Jared Polis, a longtime cryptocurrency advocate, to read a new picture book about the Bufficorn mascot. The following night, during an interview, Buterin told the crowd that he expects the final stages of ETH2 to be achieved in 2021, but warned it could take up to five years. He also praised the Ethereum community as the healthiest it has ever had, noting that it may not be as big as it was during the heyday of the cryptocurrency bubble of 2017, but those who stay are more dedicated than ever.
The assembled Ethereum crowd seemed unfazed by the prospect of further delays in its long-promised update, and cheered Buterin enthusiastically at the end of the interview. In response, Buterin smiled sheepishly and leapt off the three-foot stage before sliding past the rainbow and unicorn decor and out the door.
