Binance’s CEO has claimed that Ethereum’s success could also be the reason for its long-term failure
Binance CEO Changpeng Zhao believes that Ethereum’s success could ultimately be the reason for its downfall. The second largest cryptocurrency by market cap may have the most widely used blockchain in the crypto space, but its success could also lead to its demise.
Zhao offered his glimpse of what could end Ethereum in a series of tweets over the weekend. Ethereum’s lack of scalability has been cited multiple times as a reason its competitors might overtake it, and Zhao made a similar comment.
Binance’s CEO compared Ethereum to social media companies like MySpace and Friendster. He tweeted, “Maybe social media is the best example. Friendster, MySpace was hugely popular, couldn’t handle the load, couldn’t keep up with user / demand growth. Path. Many other examples if you are old enough to remember the beginnings of the internet ”.
According to Zhao, Ethereum created the smart contracts market and led it to a host of other markets including first coin offerings (ICOs), decentralized finance (DeFi) and non-fungible tokens (NFTs). Demand on the Ethereum network is growing, but performance has yet to be caught up. With ETH 2.0 still years away from a full launch, Zhao believes that Ethereum’s massive success could be the reason it ultimately fails.
Due to the slowness of the Ethereum network, projects hosted on the Ethereum blockchain face the problem of scalability. If they don’t scale their systems fast enough, they can die out almost instantly.
Several people claimed that the Binance Smart Chain (BSC) would be Ethereum’s killer. Last week’s Binance incident, in which Ether and ERC-20 tokens were temporarily disabled, convinced many people that Binance wanted to eliminate Ethereum.
However, Zhao said the Binance Smart Chain is not why Ethereum would fail. He said: “BSC is not an ETH killer. It is based on the findings of the ETH and tries to solve a central problem: high fees. It wasn’t designed that way, or at least wasn’t presented as such. (I was / am not involved in the design.) “
Ethereum has so far been the preferred choice for developers and has cemented its position as the number one smart contract network, but its lack of scalability continues to frustrate developers. While the ETH 2.0 is supposed to solve this problem, the upgrade may not be available anytime soon.