A Decade of World Computing: The Glory and Confusion of Ethereum

Over the past century, humanity has repeatedly redefined the form of computers. From the massive computers of the mid-20th century, to IBM's mainframes, and then to personal computers and smartphones, each leap in computing power has reshaped the way people connect with the world.

In 2013, 19-year-old Vitalik Buterin had an idea while playing a game: if there were a "world computer" that was not owned by any company, not controlled by a single power, and available to everyone, could it become the starting point for the next generation of computing?

On July 30, 2015, the Ethereum mainnet was launched in a small office in Berlin. At that moment, the spark of the world computer was ignited.

Starting Point and Spark

Ethereum initially had fewer than a hundred developers. It embedded smart contracts into the blockchain for the first time, providing a Turing-complete platform that transformed the blockchain from merely a bookkeeping tool into a world-class public computer capable of running programs.

Soon, this newborn computer underwent severe tests. In June 2016, "The DAO" suffered a hacker attack, and approximately 50 to 60 million USD in Ether was stolen. The community had intense discussions about whether to "rollback history," and ultimately chose to hard fork to recover the assets, which also led to the split of the Ethereum Classic chain. This event brought the governance issue of the world computer to the forefront for the first time.

The ICO boom of 2017-2018 brought Ethereum to a climax, but the subsequent bubble burst led it into a trough. Network congestion and high fees were heavily criticized, and the popularity of CryptoKitties nearly caused the mainnet to come to a halt, exposing the limitations of insufficient computing power.

In response to performance bottlenecks, the Ethereum community is researching on-chain sharding solutions while exploring off-chain scaling paths. In 2019, the Rollup solution emerged, enhancing processing capacity by bundling a large number of transactions and submitting them for validation on the main chain. Ethereum gradually formed a scaling route of "mainnet security, layer two execution", as the world computer began to decompose into a multi-layer collaborative system.

In the following years, DeFi and NFTs exploded on Ethereum. In August 2021, the EIP-1559 upgrade implemented a base fee burning mechanism, reducing inflationary pressure during periods of high demand. In September 2022, The Merge was completed, and Ethereum switched from PoW to PoS, reducing energy consumption by 99% and the new issuance rate by 90%.

In March 2024, the Dencun upgrade introduced EIP-4844, significantly reducing the costs of submitting data from layer two networks to the mainnet. This marks another step forward for the World Computer towards its sharding goals.

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

The Fog of Middle Age

As we enter 2024-2025, the difficulties faced by Ethereum are becoming increasingly apparent:

1. The Layer2 diversion effect is significant. A large number of transactions and value remain on the second-layer network, failing to flow back to the mainnet, which erodes the value capture of the main chain.

2. The competition among external public chains is fierce. Solana attracts a large number of developers, Tron dominates the stablecoin sector, and BNB Smart Chain captures a portion of the market share.

3. Governance and security concerns. The issue of staking centralization has raised worries, with the largest staking pool previously accounting for over 32%. How to promote staking diversification without compromising network security remains to be addressed.

4. Controversy over the role of the foundation. The community questions the lack of transparency in its fund management, and the governance system struggles to form effective guidance.

5. The application layer is blank and market performance is poor. Apart from DeFi and NFT, other directions have failed to produce breakout products. On-chain activity has decreased, and the price performance of ETH lags behind other crypto assets.

The Unfinished Road, The Direction for the Next Decade

Facing challenges, the future of Ethereum depends on whether technology and the ecosystem can open up new growth spaces:

1. Technical Upgrade: Improve overall throughput, making the mainnet and layer two networks more like a unified ecosystem.

2. Governance and Economic Reform: The foundation initiates structural reform, exploring options such as extracting profits from Layer2.

3. Seeking new application breakthroughs: creating new narratives and applications in fields such as social interaction, identity, and AI, or laying out plans for future interaction forms such as AR and brain-computer interfaces.

The world computer, a ten-year itch. It has not stopped operating; it is just seeking a new direction. The next decade belongs to it and to everyone who still believes in this dream.