Ethereum at Ten: The Midlife Crisis of the World Computer

Over the past decade, humanity has redefined the form of computers multiple times. From the massive early computers, to enterprise mainframes, to personal computers and smartphones, each leap in computing power has changed the way people connect with the world.

In 2013, 19-year-old Vitalik Buterin pondered a question while playing a game: who would ensure that the rules in the digital world are not arbitrarily changed? This prompted him to envision a "world computer" that is not controlled by a single entity and is available to everyone.

On July 30, 2015, the Ethereum mainnet was launched in a small office in Berlin. At that time, there were fewer than a hundred developers, but this marked the ignition of the world computer.

Ethereum was the first to introduce smart contracts to the blockchain, transforming it from merely a bookkeeping tool into a global public computer capable of running programs. However, this nascent computer soon faced severe challenges.

In 2016, the DAO incident led to the theft of a large amount of funds, and the community had intense discussions on whether to roll back the transactions. Ultimately, a hard fork was chosen to recover the assets, which also resulted in the split of Ethereum Classic. This incident brought the governance issue of the World Computer to the forefront for the first time.

The ICO boom of 2017-2018 pushed Ethereum to its peak, but the subsequent bubble burst led it into a trough. Network congestion and high transaction fee issues were highlighted, exposing the limitations of insufficient computing power.

To address performance bottlenecks, the community began researching sharding solutions as early as 2015. They also explored off-chain scaling paths such as state channels and Plasma. In 2019, the Rollup solution emerged, which enhances processing capacity by bundling transactions and submitting them for validation on the main chain.

In the following years, DeFi and NFTs exploded on Ethereum. Although the network's prosperity came with high transaction fee issues, Ethereum began to respond through protocol improvements. The EIP-1559 implemented in August 2021 introduced a base fee burning mechanism that reduces inflationary pressure during times of high demand.

In September 2022, The Merge was completed, and Ethereum switched from PoW to PoS, reducing energy consumption by 99% and new issuance by 90%. Data from the year following the merge shows that Ethereum's net supply decreased by approximately 300,000 ETH, reinforcing market expectations of its scarcity.

In March 2024, Ethereum will implement the Dencun upgrade, introducing EIP-4844 to reduce the cost of submitting data from layer 2 networks to the mainnet, marking a step towards the goal of sharding.

Ten years have passed, and this world computer has transformed from an ideal to an indispensable infrastructure. However, new challenges have also emerged.

The Fog of Middle Age

In 2024-2025, the challenges faced by Ethereum are becoming prominent:

1. The Layer 2 diversion effect is significant. The rise of second-layer networks has caused a large number of transactions and value to remain on the upper layer, failing to return to the mainnet, which erodes the value capture of the Ethereum main chain.

2. Competition among external public chains intensifies. High-performance public chains like Solana have attracted a large number of emerging projects, and Tron has surpassed Ethereum in the stablecoin sector. Although Ethereum remains the largest DeFi ecosystem, its relative advantage has declined.

3. Governance and security concerns. After the PoS transition, worries about staking centralization have arisen. Large staking service providers dominate, which may impact network security.

4. Controversy over the role of the foundation. For a long time, the foundation has faced criticism regarding the transparency of fund management and ecological guidance. At the same time, the voices of opinion leaders have gradually faded, resulting in a lack of consensus within the community.

5. Application layer stagnation. Aside from DeFi and NFTs, there have been no large-scale successful applications in areas such as social, gaming, and identity. On-chain activity metrics continue to decline, lacking a killer application that can drive a new wave of user growth.

6. The market performance is poor. The price of ETH has not been able to break through its historical high for a long time, underperforming relative to other crypto assets. Although institutional allocation provides some support, it stems more from financial factors rather than breakthroughs in the ecosystem itself.

The Unfinished Road

Facing challenges, the Ethereum community is seeking breakthroughs in multiple areas:

1. Technical Upgrade: Committed to enhancing the overall network throughput to 100,000 transactions per second, while maintaining decentralization and robustness. In the future, more data sampling and compression technologies will be introduced to break through performance bottlenecks through solutions such as zero-knowledge proofs.

2. Governance Reform: The foundation initiates structural reorganization, sets clear goals, strengthens team functions, and improves transparency and efficiency in the use of funds.

3. Economic Model Optimization: Explore ways to gain benefits from the prosperity of Layer 2, or adjust the protocol fee and MEV distribution mechanism to ensure that the main chain can still share ecological dividends in the Rollup era.

4. Finding New Application Breakthroughs: Encourage developers to focus on emerging fields such as social, identity, and AI, while also looking at future interaction forms such as wearable devices, AR, and brain-computer interfaces.

Ethereum still has a large developer community and a deep technical foundation. However, as Vitalik mentioned, the next ten years need to shift from theory to practice, thinking about how to make a substantive impact on the world. Developing the next generation of applications not only requires innovative features, but also needs to retain common values and be user-friendly enough to attract more users.

The world of computing is at a crossroads. How it will redefine its role in the next decade still requires exploration by everyone who believes in this dream.