Ethereum Founder Points Criticism at Several Other Projects in the Space


Known for occasionally making controversial comments, Vitalik Buterin has added some new enemies to his list by savagely criticizing NEO, TRON, and EOS. As is often the case in the crypto-world, the criticism are largely around how centralized these protocols are

In what could be considered an artfully handled defense, Buterin countered any jabs at Ethereum’s transaction throughput goals by asking why it was even prudent to have goals for throughput in the first place. In his words:

“Because the purpose of a consensus algorithm is not to make a blockchain fast. The purpose of a consensus algorithm is to keep a blockchain safe.”

This points to one underlying debate that is playing out in real-time. Some platforms are obsessing over the scalability of a project without keeping the long-term security of the coin a priority. Vitalik is arguing that this is a huge mistake and ignores several realities about the technology.

Blockchain technology is purposely inefficient in terms of throughput of transactions. If users were looking for efficient, centralized solutions would probably be much faster. But instead, they are looking for a secure and trustworthy platform. Speed becomes a consideration, but only afterward.

Platforms of a Different Type

The comparison based on transactions per second (TPS) ignores and looks to generate an efficiency where there should be none, at least in Buterin’s eyes. He went on to pointedly jab at NEO with the comment:

“When a blockchain project claims ‘We can do 3,500 TPS because we have a different algorithm,’ what we really mean is ‘We are a centralized pile of trash because we only have 7 nodes running the entire thing.’”

NEO is known as having 7 consensus nodes in operation, and though it may be operating with separate goals in mind than Ethereum, that does seem to be a fairly “centralized” structure to run under. TRON and EOS are two other currencies that he was targeting in this talk, seeing as they are often compared to ETH in terms of their efficiency. These sorts of ideological debates are common at conferences like the one Vitalik was at, and are part of why the crypto world is full of so many disputes.

After these polarizing comments, Vitalik discussed scaling solutions that he does see worth pursuing over an arbitrary throughput goal. Mostly, this involves layer 1 and layer 2 solutions, such as sharding or Lightning Network. He would also like to see the latency period for transactions go down to a more reasonable number (under 10 seconds).

Longer Term Implications

All of these comments are after significant criticism for the higher transaction fees that resulted during the crypto boom, and the many questions around what Ethereum will do when transaction volume does increase again.

With many cryptocurrencies selling off in recent days, and support levels failing to hold up, it is important to note that Ethereum is going through an extended period of weakness right now. There is technical selling pressure on ETH, and most crypto bulls are avoiding the coin for the time being.

Vitalik is not your regular charismatic CEO type, but he also is very intellectually confident and shows his powerful persona in other ways. For example, in late December of last year, he responded in full to a long Twitter thread criticizing Ethereum’s scalability, architecture, and future plans. For an industry dominated by thinkers, this is the person you want at the head of the company, galvanizing a movement behind the coin.

Leave a Reply

Notify of

Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.

CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.

When trading in stocks your capital is at risk.

Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.