The Ethereum Killers are Dead Ducks | Why you should invest in Ethereum
Back in early 2018 still high on the exuberance of the ICO fuelled bull market frenzy of 2017, many people including myself were out on the hunt for the next BIG THING!
Everyone knew that bitcoin was a dinosaur, old slow and an extremely expensive way to send value over the internet.
Social media was filled with speculation of what coin would be most likely to replace bitcoin while I having a fresh new YouTube channel, was focusing on which of the newly released dApps (decentralised applications) platforms was most likely to replace Ethereum?
The previous summer Ethereum had been suffering severe slowdowns on the network due to the success of crypto kitties, a market place for buying and selling unique “crypto kitties”…
This bizarre craze brought to light a HUGE problem with the Ethereum blockchain. As ALL ERC20 tokens exist and trade on the same blockchain then whenever excessive load is added to the network EVERY token suffers from “the slowness”.
With so many of these new red hot ICO’s raising $millions and in the case of EOS over $1billion to tackle this problem and create a better blockchain for dApps, hoping to solve the problem of the single chain dilemma. You could have easily thought that within two years the world of dApps could look significantly different.
Unfortunately we now know that has not been the case, however we have learnt one important lesson from all of this;
“not even $1 billion dollars can buy talent!”
I always found it kind of funny how Satoshi Nakamoto never needed to raise $20 million prior to creating bitcoin, yet these new blockchain developers that proclaim to be able to do a better job than Satoshi, require huge sums up front just to make an attempt at writing a single line of code.
Anyway, just recently on May the Forth (Star Wars day) aka Moocharoo Ninja launch day, we revealed the new version of our main website and one of the new Master Ninja modules we called “The Watcher” that was made to find recent dips in the market to help traders find opportunities.
We made it so that you could filter through certain types of coins, naturally one of those types was tokens.
It was not until I first viewed this page on the LIVE site that I noticed just how bad the situation was. Scrolling down through the list of undervalued tokens I just couldn’t believe how many of these coins were ERC20 tokens simply running on the Ethereum blockchain.
Also I had never before realised just how many prime projects that we all know and love are actually nothing more than ERC20 tokens.
Realizing it must have been over 90% Ethereum, I suddenly realised that all of that investor money raised on the hopes of being “The Ethereum Killer” had all been entirely wasted.
Not only had they ALL utterly failed at the killing of Ethereum, they had even failed to become competitors to Ethereum. Even if you bundled them all up together, their combined market cap still came nowhere near to being considered as any kind of possible competition.
A few weeks later, while sat starring at the staggering difference in market cap between bitcoin and Ethereum. I pondered on the possibility of “what if…” What if we added up the market of all ERC20 tokens in just the top 2,000 coins on coinmarketcap.com? (there are currently 5,534 coins listed).
Would the combined total be more than the market cap of bitcoin?
Well the video I made shortly after that discovery reveals those results.
But this was not the end of the story, in fact this was just the beginning. The next logical question was “what about all those alleged Ethereum Killers like EOS?” how were they doing two years on?
How many of the top 2,000 coins on coinmarketcap.com are in fact actually coins?
And how many are just tokens riding on another coins blockchain?
Well the numbers were actually quite under whelming to say the least…
- Ethereum = 1,113 tokens
- NEO = 21 tokens
- Stellar = 18 tokens
- EOS = 14 tokens
- Waves = 13 tokens
- BitShares = 10 tokens
- Tron = 9 tokens
- Qtum = 7 tokens
- NEM = 4 tokens
- Ardor = 3 tokens
- VeChain = 3 tokens
- Cosmos = 2 tokens
There were also a hand full of other dApps platforms in the top 2,000 however they only had 1 token in the top 2,000 so we choose not to count them as being relevant at this time.
Shocked at the poor turn out of these would be “Ethereum Killers” especially after having raised billions in investor funding, having had two years to gain some traction and get a foot hold in the market. I decided to run some further code to calculate the combined market cap of each dApps blockchain to establish just how much market share these projects have managed to capture with their mountain high stacks of investor funds.
Worst here in my opinion would have to be EOS, having raised over $1billion in a yearlong ICO to now only have 14 tokens in the top 2,000 on coin market cap… and with that has gained a market share of just 0.0238%
Just how many more billions in investor money do they need to be able to get that figure up to 1%?
And if you think that is bad just look at the combined market cap of those 14 coins just $43million! (after raising $1billion at ICO)
And then what about NEM and Waves? Both have been around a relatively decent amount of time to have gained some traction as dApps platforms yet both seem to have completely failed, NEM with just 4 tokens in the top 2,000!
Conclusion
There is no conclusion, there is nothing here but more questions the largest of which for me would be, have these projects failed to gain market share because of lack of effort or because the lure of Ethereum for anyone looking to create a blockchain based token is simply too strong?
As a developer, I just don’t think so. Back in early 2018 we were looking for a blockchain solution ourselves and not wishing to have to learn Solidity (the coding language for Ethereum smart contracts) we researched every dApps project out there to find one more developer friendly.
Lisk appeared to be the most developer friendly (javascript) yet hadn’t actually created the side chains required for tokens and I believe two years on they still have not yet managed to do so.
In the end we went with NEM, this was great and very easy to set up since as you can choose from many different coding languages, however in the end due to it’s limitations and the bespoke system we were looking to build we have begun working on our own chain.
However… with all of that said, NO I do not believe these projects have failed to gain market share because developers were not interested.
The #1 reason I believe they have failed is that they are simply not trying, too happy to just sit back and count the proceeds of their ICO’s.
ALL while Vitalik and his boys are working hard to produce Ethereum 2.0 and with it will likely come the subsequent death of all the copycat dApps platforms!
Let me know in the comments below which dApps platform you believe actually has a shot of taking just 1% of the dApps market share, or whether you think Ethereum is now simply TOO BIG TO FAIL.
