Ethereum Collapse Prediction by Charles Hoskinson: Justification in Three Key Points
Here's a rewritten version of the article:
Charles Hoskinson, the mastermind behind Cardano, lowered the curtain on Ethereum's potential fate, expressing doubts about its survival until the next decade. He pointed to parasitic L2s, Bitcoin DeFi, Solana, and Sui as impending threats.
During a recent interview, Hoskinson share his concerns about Ethereum's core components, which he believes to be self-inflicted. According to him, Ethereum's accounting system, Virtual Machine, and consensus model are all flawed.
Criticizing the accounting system, Hoskinson pointed out the operational inefficiencies it causes, particularly when it comes to managing state transitions and transaction processing. The Ethereum Virtual Machine (EVM) is considered outdated and lacking in scalability, hindering its ability to support Decentralized Applications (DApps) of the future. Lastly, Hoskinson raised concerns about the effectiveness of proof-of-stake (PoS) in maintaining security and decentralization compared to alternative models.
Hoskinson also expressed concerns about Ethereum’s lack of formalized on-chain governance, which he believes could delay critical upgrades by as much as 5-7 years, leaving it vulnerable to coordination failures amid growing ecosystem complexity.
In addition to listing internal flaws, Hoskinson highlighted external competitive pressures. For instance, Ethereum's rollup-centric roadmap risks causing liquidity and community fragmentation, as layer-2 networks prioritize their own ecosystems. He warned about the emerging threat from new blockchain platforms like Solana and Sui which boast faster transaction speeds and streamlined user experiences. These platforms could potentially attract developers and users seeking alternatives to Ethereum’s congestion and high fees.
Citing the growing DeFi ecosystems on Bitcoin, Hoskinson also expressed concerns about Bitcoin DeFi surpassing Ethereum’s total value locked (TVL) once fully operational, further eroding Ethereum's dominance.
However, the Ethereum community is not without hope. Avichal Garg, founder of Electric Capital, dismissed the Ethereum death calls and stated that Ethereum network activity (addresses) spiked nearly 10% mid-week, despite the spot market bids easing as of the writing of this article.
Source: Various sources and personal analysis by Charles Hoskinson.
Exploring the Roots of Ethereum's Problems:
- Accounting Model: Ethereum's accounting system, criticized by Hoskinson, results in operational inefficiencies due to its handling of state transitions and transaction processing.
- Virtual Machine Limitations: The Ethereum Virtual Machine (EVM) is deemed outdated and lacking in scalability—two critical features for supporting next-generation DApps.
- Consensus Mechanism Concerns: While Ethereum's shift to proof-of-stake (PoS) reduced energy consumption, Hoskinson questioned its effectiveness in maintaining security and decentralization compared to alternative models.
The Ethereum Community Responds:
Both Hayden Adams, Uniswap founder, and Armani Ferrante, founder of Solana-based Backpack exchange, share Hoskinson's sentiment regarding Ethereum's scalability issues. They believe that it's too late for Ethereum to compete at the L1 scaling game and instead suggest that Ethereum should focus on building Ethereum native rollups and prioritize being the best in that department.
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- In 2025, the Ethereum network may struggle to survive due to the criticisms raised by Cardano's founder, Charles Hoskinson.
- Hoskinson questions the scalability of Ethereum's accounting model, causing operational inefficiencies and hindering support for future Decentralized Applications (DApps).
- The Ethereum Virtual Machine (EVM), considered outdated, lacks the scalability needed for supporting next-generation DApps.
- The proof-of-stake (PoS) consensus mechanism, while reducing energy consumption, is questioned for its effectiveness in maintaining security and decentralization compared to alternative models.
- Bitcoin DeFi's emerging growth could surpass Ethereum's total value locked (TVL), potentially eroding Ethereum's dominance in the finance industry.
- New blockchain platforms like Solana and Sui, with faster transaction speeds and streamlined user experiences, pose a threat to Ethereum's dominance.
- Critics believe Ethereum should focus on building Ethereum native L2 rollups and prioritizing being the best in that department, suggesting that it's too late for Ethereum to compete at the L1 scaling game.
- Other industry leaders like Hayden Adams, Uniswap founder, and Armani Ferrante, founder of Solana-based Backpack exchange, share Hoskinson's sentiment regarding Ethereum's scalability issues.
