People in the 1960s computer industry would say the market was IBM “and the
seven dwarfs” in reference to the other popular computer makers: Burroughs,
Control Data, Digital Equipment, RCA, Univac, Honeywell and GE. They all
poured fortunes into developing newer and better technologies than IBM, yet
none could compete with its massive distribution advantage. Ethereum is the
IBM of the smart contract blockchains: it may not be the “best” technology,
but it works well enough and has amassed a distribution advantage that will
be hard to overcome by its competitors.
Ethereum isn't #1 only because it was first, but because it's the best practical solution today, best research, and likely be the best solution tomorrow. As it's Turing complete and open, if anyone has any improvements, they can bring them in, no need for a new cryptocurrency. This can be a smart contract with native ETH or tokens, a side-chain with any consensus mechanism, anything. There isn't a single reasonable idea in crypto space one cannot bring into Ethereum, take advantage of the great tools available, avoid the need to establish trust and enable true money to flow in from day one. Anyone starting a new cryptocurrency is doing it not for the good of the product or the good of the user.
I don’t disagree Ethereum has among the best overall tech / tradeoffs for security and L1 scaling, if not the best.
But the point is that network effects, and at this point, Lindy Effect matter a lot. I wrote this Tweet earlier today which summarizes why I think this is so important for Ethereum: https://twitter.com/iamdcinvestor/status/1168901364728172545?s=21
> Many don’t understand Ethereum’s network effect, because they think the value of smart contract platforms is derived from tx throughput.
> It’s not- it’s from trust-minimized app composability & interoperability, and digital assets / access rights. That’s why Ethereum is still #1.
I think the problem with the article is that 'the best' remains undefined. Whats the best here? Its never a single thing. Fastest? Most developers? Best encryption? Most adoption?
Point is that network effects isnt a seperate thing. In these shared infrastructure solutions its part of how we define 'best'.
And this is why I actually think that ethereum *is* the best
Most people building smart contract-based applications are doing so on Ethereum knowing full well it’s not “the best”, at least compared to the claims of everyone coming after it. But it’s here now (so many of its dwarves haven’t actually launched)
If we're going to compare to things that haven't launched, then we should include Ethereum 2.0, which might well be the best of the lot.
Was there at the time. Contrary to author's assertion, "BUNCH" did not include DEC. IBM & the BUNCH referred to IBM & Burrougs, Univac, NCR, Control Data, and Honeywell.
The metaphor is also instructive in that once Mighty IBM pales in significance compared to Apple, Microsoft, Amazon... even Google's research computing is larger than IBM from a market-cap perspective.
So if Ethereum is to IBM as X is to Apple, what is X?
Per usual, great insight and thoughts from Joel and Placeholder.
I think a large portion of the broader community are sleeping on the facts outlined. No lead is insurmountable given a long enough horizon, but the lead Ethereum has in the smart contracting space is hard to overstate.
The dPoS/cartel chains will have a tough time gaining social scalability. They'll get users, sure. But I'm of the belief that the "winning" platform, where all the real money/economic activity is, will have to feel like an uncaptured public good. Not sure I really see that elsewhere besides Ethereum right now..