Binance CEO has claimed that Ethereum’s success could also be the reason for its failure in the long run
The CEO of Binance, Changpeng Zhao, believes that Ethereum’s success could eventually be the reason for its demise. The second-largest cryptocurrency by market cap has perhaps the most widely used blockchain in the crypto space, but its success could also lead to its downfall.
Zhao offered his insight into what could end Ethereum in a series of tweets during the weekend. Ethereum’s lack of scalability has been pointed out several times as the reason why its competitors could overtake it, and Zhao made a similar comment.
The Binance CEO compared Ethereum to social media companies like MySpace and Friendster. He tweeted, “Perhaps social media is the best example. Friendster, MySpace was hugely popular, couldn’t handle the load, couldn’t keep up with the user/demand growth. Gone. Many other examples if you are old enough to remember the early days of the internet“.
Zhao said Ethereum created the smart contract market, leading to a wide range of other markets, including initial coin offerings (ICOs), decentralised finance (DeFi) and non-fungible tokens (NFTs). Demand is growing on the Ethereum network, but the performance is yet to catch up. With ETH 2.0 still years away from a full launch, Zhao thinks Ethereum’s massive success could be the reason why it ultimately fails.
Due to the slow nature of the Ethereum network, projects hosted on the Ethereum blockchain face the scalability problem and if they don’t scale their systems fast enough, they could go extinct almost instantly.
Several people claimed that the Binance Smart Chain (BSC) would be the Ethereum killer. Last week’s incident of Binance temporarily disabling Ether and ERC-20 tokens withdrawal convinced many people that Binance was out to eliminate Ethereum.
However, Zhao said the Binance Smart Chain isn’t the reason why Ethereum would fail. He said, “BSC is not an ETH killer. It is built with learnings from ETH and tries to help solve one key issue, high fees. It wasn’t designed that way, or at least, it wasn’t presented to me as such. (I was/am not involved in its design.)”
Ethereum has been the preferred choice so far for developers and has solidified its position as the number one smart contract network, but the lack of scalability continues to frustrate developers. While ETH 2.0 is slated to solve this issue, the upgrade might not be ready anytime soon.