What you should know about Ethereum’s long-term dangers

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Bitcoin and Ethereum are two of the world’s most popular cryptocurrencies. While Bitcoin and Ethereum have both captured a sizable portion of the cryptocurrency market’s value, their goals are vastly different. This rivalry between the two has also spurred debate over whether cryptocurrency is superior to the other.

 

So, is ETH much superior when compared to Bitcoin? Maybe not. Comparisons aside, it’s worth noting that none of the two are immune to any long-term roadblocks or risks. The same was the topic of discussion on the latest edition of the ‘What Bitcoin Did’ podcast.

This week’s guest, Suredbits software engineer Nadav Kohen, touched upon the same and highlighted the long-term risks with ETH and its “trending” developments.

According to Kohen, with Ethereum, if one downloads some kind of Ethereum wallet, a so-called Light client in the Bitcoin world, one is trusting someone else to give you the correct view of ETH blockchain.

“You’re not actually doing the validation yourself. If you do it yourself, it is quite tricky compared to Bitcoin to get the entire ETH blockchain downloaded and validating all those rules.”

Moreover, ETH faces two major risks in the longer term, with the biggest problem being its bloated blockchain. For contextual purposes, consider this – For Bitcoin, 400ish gigabits of the Bitcoin blockchain, that’s like a decade’s worth of blockchain.

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Kohen, however, argued that when it comes to Ethereum, “we are talking about much less time, but a massive amount of data. Right now, while ETH is being used a lot, and a faster rate of growth is possible to some extent, that’s “certainly, it’s going to be an issue,” the crypto-software engineer added.

Furthermore,

“You can’t expect there to be a large distributed network of fully validating nodes. These issues come when dealing with centralization; Quite the opposite of what the overall crypto community is trying to solve.”

In addition to emphasising the need of decentralisation, the developer addressed the second issue — censorship.

Unlike Bitcoin (which is censorship-resistant), some stablecoins on Ethereum, according to Kohen, contain terms and conditions that discuss the notion of blacklisting some of the addresses. The engineer contributed to the story by disclosing a “dirty secret” of most of the smart contracts in the sector.

“Plenty of smart contracts out there have upgrade mechanisms where a certain number of people sign off, essentially a version of an ‘admin keys’ for the smart contracts. Basically a mechanism by which a small number of people can decide that some addresses aren’t allowed to use this contract which would censor that activity. Ethereum as a whole, individual projects and contracts can be centralised entities.”

But, if that’s the case, how would one describe Ethereum? That’s a tricky one to answer. The engineer, on the other hand, was quick to determine that,

“Ethereum is not exactly private, maybe pseudo-private with a small federation that controls it.”

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