Anyone else think Ethereum is difficult to use these days?
Yeah, there’s a bunch of cool stuff on Ethereum — meme tokens, NFTs, DeFi, degens — it’s all there. But over the years as the blockchain evolved, it has become more expensive and more complicated — as in, an already complex technology for users has become even moreso.
Not only do users need to understand crypto basics like wallets, irreversible transactions and addresses, they also now have to contend with getting to know different chains. You can’t just send Ethereum chain ETH to Optimism chain ETH, or Optimism chain ETH to Polygon chain ETH, unless of course you use a bridge which means that this system might be getting a little complex for many users.
Ethereum is becoming a multilayered lasagna-like system whereby complexity and fees are pushing people to the margins, causing interoperability and security concerns.
How did we get here?
I wouldn’t say there’s anyone in particular to blame for this; it’s an ecosystem problem as a whole. When Ethereum launched almost 10 years ago, nobody was using it. At that time, any usage at all was welcomed.
Now, it’s 2024 and there is usage. But there’s also expensive layer-1 fees. Average transaction fees on the layer-1 Ethereum blockchain are at $0.94. If a user wants to interact with a smart contract, like a DEX, fees are averaging $4.70.
Some might say, “Well, maybe it’s time to examine fees themselves.” Problem is, fees are what secure the network. If validators were not being incentivized by staking and reaping fees, what would be the point?
Okay, yeah, but there’s the layer-2 options, right? There are. And Arbitrum and Optimism have both transaction and smart contract fees at less than $0.02. We’re securing the bottom layer, enabling lower fees on the second.
But as a Coinbase report from late last year noted, there are so many of these layer-2s that fragmentation now exists between all of these different chains. And mainstream users, aka those who could enable mass adoption, want financial apps that don’t make things complicated.
The sandbox
The point is clearly that Ethereum is just one big-ass financial experiment. I actually wrote about this way back in 2016, about Ethereum being a fintech sandbox.
And it has been one. When I wrote that piece, ICOs were only slowly gaining traction, DEXs were in their infancy and there wasn’t even an NFT token standard yet — just Plain Jane ERC-20s.
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Times have certainly changed. Ethereum’s “world computer” concept, the idea that people could build programmable monetary systems on a verifiable blockchain, has been a success. The Ethereum Virtual Machine, or EVM, is a standard for smart contract development — even outside the Ethereum ecosystem.
Then, there’s the 2022 move to the proof-of-stake model, which to Ethereum’s credit, was pulled off with remarkable execution.
Yet I’ve heard of people working on Ethereum layer-3 projects now. That’s an abstraction of two layers — can anyone come up with something comparable for so many layers in technology? Maybe the OSI model? It has seven layers. But it’s used for data in networking, all running at the same speed. And there’s no fees. It’s just categorizing data.
Okay, well, blockchains are just data. So then we arrive back at the fee conundrum. But blockchains are decentralized, so there has to be some incentive to support the network, right?
A fee quagmire
Fees secure the Ethereum network, rent the computing power to do things and also limit spam. With that in mind, I suppose there have to be fees in the system — I’m not proposing some grand, new fee-less Ethereum design, that’s for the Vitalik Buterins of the world.
There are rollups, and that’s promising because they can batch process transactions off of Ethereum while lowering fees with the same level of security. Or maybe some smart startup can somehow increase interoperability — instead of reducing it by having users dig through layers like a Stouffer’s Italiano.
I just am not convinced of the feasibility and long-term viability of so many bridges, some of which have been compromised. It feels like too many vulnerabilities in the margins. Perhaps a standardization of bridges is needed, and many wallets do warn users about interacting with bad smart contracts, so some safeguarding is happening.
But I’m still trying to coincide my recent experiences with Ethereum as something…
Very.
Lasagna-like.
Tasty for the taste buds as a food, yes.
But isn’t it a bit complex for people to use as a blockchain? People want apps that offer free flow of money, not restrictive layers. Hopefully, Ethereum can evolve past this lasagna stage.
Daniel Cawrey has been involved full-time in the crypto space since 2013, including as an editor at CoinDesk. He is author of 2020’s “Mastering Blockchain” and 2023’s “Understanding Crypto” books, both available on Amazon.
