Thank you for suggesting such a great topic and it’s a good time for discussion in this moment facing ethereum 2.0.
I’ve always wondering i) how could we capture the value of ETH and ii) whether this is really an issue for ethereum itself.
[ TL;DR ]
Regarding your opinion, I DO think,
i) the thin protocol is not that convincing.
ii) For mass adoption of ETH and ethereum itself, non-value capture would not be the crucial problem.
Could you explain the (2) more? I think this part is more relevant with the traditonal business logics. (race to zero, commodization…) Ethereum is not a traditional business indeed.
IMHO (3) High velocity is not that relevant issue with the weight of protocol. The velocity problem belongs to the economic selfishness of participant in the crypto market.
Um, further, inelastic issuance model in ethereum protocol may be another influencial factor to a certain degree, since it’s not controlled arbitrarily by one authority. But this is just a essential factor of cryptocurrency starting from Bitcoin’s economic philosophy… We could not fix this.
If the main reason of this opinion is the “thin protocol” thesis, it’s hard to agree. The fat protocol of blockchain is “physically” a true idea.
For example, the GHOST protocol makes the chain rule and Casper FFG stablizes the total network, making the blockchain itself. The protocol makes it continual the block creation and linked chain mechanism, and this explains simply the role of protocol in blockchain. The value capture problem is just a kind of ETH valuation in market.
The economic issues are always influenced above the protocol layer, like “relatively thin” smart contract layer. This layer is creating its own world like token contract, dApp, exchanges, etc which is more relevant with the economical issue itself.
The critical point is that much of the economic phenomena is decised outside of the protocol, like a smart contract layer or some political issues, weakly belonging to the blockchain protocol itself.
Maybe the protocol influences the price of cryptoasset(ETH) because of the inelastic supply curve of ETH by the protocol in general, but it cannot be the main reason for justifying Ethereum is a thin protocol. It’s just another category of debate.
Additionally, I disagree with the opinion of tech crunch in this moment. It’s just similar with traditional financial guys’ idea like “the lower valuation, the worse commodity.” But, ETH price is not that representative of ethereum chain’s success.. The main factor of ethereum’s success is the decentralized blockchain protocol and the possibility of real implement of the technical design.
As a platform, the entry barrier must be low. And the barrier of ethereum is the price of ETH. Supposing more network value, more price mechanism, there would be no users of ethereum. (supposing high network value and ETH price is $1,000 again)
Buyers do not prefer the volatile unit pricing model using information goods. This has been verified through several thesis. That’s why we’re taking the membership-kind pricing using SW goods or information goods today.
So, in this moment, I wonder, is the lower ETH price is really an issue?
How about getting the ETH valuation more lower and stable(maybe the speculators are going to kill me lol) even if there’s a higher demand and network value?
I think the price per ETH must be gone down more for mass adoption of network or pricing model of ETH should be tuned like fixed fee model… (maybe the optimal price for security issue is to be researched.,)
Twisting our thoughts, when ETH goes down, it makes a lower entry barrier for a normal person to use the ethereum network because of the lower gas fee and ETH buying price.
The price volatility is the main hassle factor of Ethereum and this makes government and traditional men think the cryptoworld is the world of speculation.
Is there any methods with this ? Feedback or debate with my opinion welcomed !