Ethereum core developers reflect: Did we choose the wrong industry?

Original title: Sunday Recommended Reading | Ethereum core developers reflect: wondering if they have entered the wrong industry

Original text: Wu Talks about Blockchain

Ethereum core developer Péter Szilágyi is a member of the Ethereum Foundation and the developer of Geth, the most mainstream Ethereum execution layer client. On the evening of August 5, after witnessing the communitys drastic emotional fluctuations in the face of drastic market fluctuations, Ethereum core developer Péter Szilágyi tweeted that he doubted whether he had chosen the wrong industry, revealing his deep disappointment in the crypto industry, which triggered widespread discussion.

The following is Wu Shuos compilation of the original text and corresponding key comments:

“I often wonder if I’m in the wrong industry. Take SpaceX for example: if they succeed in sending a rocket to Mars, it’s progress for humanity; if they fail and the rocket explodes, humanity can learn lessons and improve; all results drive progress. In contrast, the crypto space is like a casino for idiots (apologies to the few who do). If the market goes up, they yell about when they’ll buy a sports car; if the market goes down, it directly affects or even destroys life; what contribution does it make to humanity? Yes, it takes time to build a new monetary system. That’s right… but can we do something useful by the way?

Everyone is focused on being the next V (probably Vitalik), but no one wants to build anything useful, everyone is chasing value extraction. I really dont see why this system shouldnt collapse? In the big picture, what do we have to lose? All crypto has done is a huge value transfer, but so far I dont see any value creation. Note that getting rich through luck and then moving the money to some non-crypto project is not a success story in crypto. At most, it is a success story of a charitable lucky person, but it is more likely that this person made simple diversified investments.

In my opinion, it’s time for this industry to create something truly useful that people will want to use, or it’s time to shut down. At least Bitcoin tried (and failed) to be a safe haven asset. But all the other projects are like businessmen selling shovels, they don’t really create anything valuable. Just like in the gold rush, the people selling shovels don’t care if there is gold to be mined, they just want to make a profit from it. The reality is that these projects don’t provide any real innovation or actual value, they are just pursuing short-term interests and speculative opportunities.

On the evening of August 6, Péter Szilágyi tweeted again:

“My complaints about Ethereum/cryptocurrency are not to denigrate them, but to keep expectations realistic. Our most important task is to keep those who invested their savings into this world from getting hurt. Everything else is secondary. Promising everything and not delivering leads to bloodshed in the streets. The same goes for persuading people to get into something they don’t understand the risks of. Be honest and acknowledge what works and what doesn’t, what has been done and what hasn’t. Emphasize the risks of every part, including future parts that may never come to fruition.

I will always oppose creating a frenzy because I don’t want to see the average person get screwed by some billionaire VC who couldn’t care less about your existence. Yes, I may always be in the minority. Yes, this may cost me the majority of potential gains in crypto. I believe fairness is more important than financial gain.”

Comments and replies

Stablecoins and Defi need to be affirmed

The founder and former CEO of decentralized cryptocurrency trading platform Shapeshift commented:

“Stablecoins, Defi lending (such as Aave or Compound), decentralized exchanges (DEX), privacy coins, many excellent wallet applications, excellent financial intelligence systems such as Dune or Messari, high-throughput blockchains, there are indeed many great inventions in the crypto field. You may be confused by the casino-like speculation, but you should see the real value through the appearance.”

Péter Szilágyi replied:

“I’m not saying that nothing of value is being created. But I think the speculative element is too dominant, and we seem to like it because it makes money. For the examples you listed:

Stablecoins, I accept. Lending requires collateral, so you need on-chain wealth to get it, and to me, that’s not really empowering.

Decentralized Exchanges: Well, this one falls directly into the casino category in my opinion. If we had many strong currencies that people really wanted to exchange, DEX would have been an essential tool. But at the moment, it is more about trading and has no substantive significance to me right now.

Privacy coins: They are not that common and we may see some crackdown on them (like Tornado etc.) I would be happy to see them develop and be accepted.

Wallet: It is just a supplementary tool to the rest, but not a use case in itself.

Dune/Messari: Well, you can analyze the casino situation, but that doesnt make it any less of a casino, but Id love to be proven wrong.

High TPS: Yes, we’ve reached that point, but what do we do with it? I’m using my shovel metaphor to express this. Hopefully, it can be put to some practical use, rather than releasing 1,000 meme coins. I’m sure there are a lot of great things being built. But didn’t we make our meme coins and Lamborghini sports cars our spokespeople?”

Transparent financial system

Crypto KOL @iamDCinvestor commented: Transparent on-chain settlement is actually a great value-added for humanity.

Péter Szilágyi replied: How does this affect the 99.999% of the worlds population who dont have money to gamble?

@iamDCinvestor responded: “99.999% of people don’t need to use it directly to benefit. A more transparent financial system will benefit everyone because it will have less behind-the-scenes shenanigans and opacity, lower costs, more trust. The value may be hard to see if you only focus on degens being liquidated, but it’s important and world-changing, I really believe.”

Péter Szilágyi: “Of course, I totally accept that. But if we call it the ‘world computer’ or something like that, shouldn’t we build something more directly relevant to ordinary people?”

@iamDCinvestor: “I agree, we need other applications, on a much larger scale in other areas, I think we will achieve this huge value settlement layer, it’s a good start, but there will be more to come, I still think smart contract wallets, identity, non-monetary digital assets, and other forms of money will all be very important in the future, but at the same time, booms and busts are not going away. Human greed is still too strong, the systems being built are really important for the future, and your work is important.”

@0x emon commented: “You should spend more time in emerging markets than in the West. Many people rely on stablecoins and DeFi infrastructure to improve their economic situation. The problem is that most people don’t want to talk publicly about their financial decisions, so you only hear about Lamborghini stories.”

How to educate and encourage more investors and users in emerging markets

Péter Szilágyi: “Stablecoins may have value. But if you need to rely on cryptocurrencies for economic reasons, are you really the target audience of all these DeFi protocols?”

@0x emon: “Probably not, which is why I think we need to encourage more developers and investors from emerging markets. Supporting entrepreneurs in developed markets doesn’t really help the target users at the bottom of the pyramid. I know a lot of people who use stablecoins because they live in countries with capital controls and can get a yield on their stablecoins. They also use it as a form of compensation. Anything that improves economic well-being is a big benefit to users.”

Unfortunately, casinos have taken up so much of the market share that we often overlook the other benefits. However, at the same time, access to casinos also means access to a lot of liquidity that people living in emerging markets don’t have access to. Crypto is a step-up fintech for people in emerging markets. We just haven’t done enough to highlight its unique use cases and support local developers. We’ve been in the decentralized finance space for years, but no VC has tried investing in permissionless on-chain microfinance loans. Imagine if more VCs were located in developing countries…”

@nicnode commented: “Look at how crypto is being used in Latin America and other emerging markets — literally saving many lives. Bolivia is going through a huge crisis right now and the only refuge people have to ensure they can access their savings is crypto.”

Péter Szilágyi: “But they won’t use DeFi protocols, they won’t use Uniswap or NFTs.”

@nicnode: “Yes, they will in the future (some already have), but education (and easy translation) still goes a long way. In Latin America, most banks offer predatory lending rates, DeFi solves this problem.”

@vladlykhonis commented: “Funding wise. Unfortunately though, no one is funding anything “useful”.”

Péter Szilágyi: “I thought about this in contrast to the stock market. I agree that part of it is necessary for “efficient capital allocation”, but the stock market is the opposite: you have companies building utility, and the stock market funds them. Cryptocurrency seems to be the opposite: we have a super efficient way to allocate capital, but no utility to allocate it.”

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