Ethereum (ETH) is the second largest coin by market cap. In mid 2017, most investors seriously considered the possibility of flippening which means Ethereum (ETH) overtaking Bitcoin (BTC) in terms of market cap. Now, even to their own surprise all of a sudden nobody is talking about Etheruem (ETH) anymore with as much zeal and excitement as before. Before we discuss what went wrong, let us say that Ethereum was one of the hottest coins last year which did make 100x returns for investors who got in at the beginning of the year and got out at the top. In addition to that, last year we saw one ICO come into existence after another. There were so many projects built on Ethereum all of which helped the coin garner more and more attention.
Things took a bad turn in the beginning of 2018. Ethereum got embroiled in not one, but multiple big issues. The first issue was scalability. Investors and miners were concerned that Ethereum is not doing enough to address scalability issues. We saw how simple applications like Crypto Kitties nearly choked the network. This was a bad sight for investors as they expected more from the second biggest coin by market cap. This really is a big deal when you consider that coins far smaller by market cap and with far less budget like Cardano and Ethereum Classic have already made plenty of adjustments for problems that they might face in the future whereas Ethereum failed to cater for what it faced at present.
After scalability, came the debate of immutability when some Ethereum chauvinists argued that the coin was not made to be tempered with over and over again as if it was fiat currency. This also made a pioneer member resign over disappointments with Vitalik Buterin and the core team over how centralized the coin was gradually becoming. It is pertinent to note that Ethereum Classic (ETC) came into existence over the sole principle of immutability and code is law. Seems like most miners and developers are now realizing the need for a purely decentralized platform with more transparency and less interference.
If these were all of Ethereumâs problems, Iâd say give it time, investor interest will be back soon as Ethereum pulls something out of its hat. Unfortunately, that is not all. Recently, Ethereum got into legal trouble with ICOs the action and regulation on which is still pending. Scams like Bitconnect got away with millions of easy investor money in elaborate schemes that happened right under Ethereumâs nose but the Ethereum foundation did not do enough to monitor their activities or denounce their rights to using the Ethereum platform.
The debate of Proof of Stake (POS) vs. Proof of Work (POS) was another issue that recently surfaced when most analysts and research reports like those published by Bitmex Research pointed out that Ethereum might not be able to make Proof of Stake (POS) work. While the charts look good for a bullish setup as the market recovers, it is however not clear if Ethereum (ETH) could surpass previous ATH without resolving most of its very serious problems.