🙅🏼‍♂️ [Analysis] Tuur Demeester critiques Ethereum

Crypto analyst Tuur Demeester offered his critical thoughts on Ethereum $ETH in a 50 tweet thread earlier today. Tuur said he felt a responsibility to share his concerns as an analyst given his feeling that the Ethereum community often inappropriately claims to offer many of the same solutions as Bitcoin $BTC, something he finds misleading ("ETH is at best a science experiment”), and concerning given newcomers’ impression that Ether is a crypto “blue chip" investment.

Tuur also says:
On scaling: "Sharding is still a pipe dream”; “A peer review of the recent Casper / sharding white paper concluded the proposed solutions do not live up to its own claims”; “It’s unclear whether main-chain issued ERC20 type tokens will be portable to state channels (Ethereum’s version of lightning)”; “(Plasma’s) ideas were all considered previously in the “Treechains" design process, and ultimately rejected as insecure.”

On proof-of-stake: "Changing from proof of work to proof of stake changes the economics of the system, all the rules change and it will impact everything”; "Proof of Stake blockchains require subjectivity (i.e. a trusted third party) to achieve consensus”; PoS hasn’t worked in the past, either and “proof-of-stake based private currency designs date at least back to 1998”; “in order to “guarantee” the transition to PoS’ utopia of perpetual income (staking coins earns interest), a “difficulty bomb” was embedded in the protocol, which supposedly would force miners to accept the transition," but this bomb has been repeatedly hard-forked away

On the Ethereum culture: “This has become a pattern in Ethereum’s culture: recycling old ideas while not properly referring to past research and having poor peer review standards”; one of my big concerns is that sophistry and marketing hype is a serious part of Ethereum’s success so far”; “Ethereum (has a) romance with the vague and dangerous notion of ‘social consensus’, where disruptive hard-forks are used to ‘upgrade’ or ‘optimize’ the system, which inevitably leads to increased centralization”; "Vitalik is no stranger to embracing free lunch ideas, e.g. during his 2014 ETH announcement speech, where he described a coin with a 20% inflation tax as having “no cost” to users."

On programmability: Ethereum’s programmability "was criticized by P2P & OS developers as a reckless notion, given that every smart contracts is actually a “de novo cryptographic protocol”. In other words, it’s playing with fire”; "By now the Ethereum bloat is so bad that cheaply running an individual node is practically impossible. ETH developers are also imploring people to not deploy more smart contract apps on its blockchain."

On the Ethereum ICO: "Here’s why Ethereum is dubious to me: rather than creating an open source project & testnet to work on these interesting computer science problems, its founders instead did a securities offering, involving many thousands of clueless retail investors. Investing in the Ethereum ICO was akin to buying shares in a startup that had “invent time travel” as part of its business plan. Imo it was a reckless security offering, and it set the tone for the terrible capital misallocation of the 2017 ICO boom.

Tuur's never one to mince words, but this one is sure to rile up a lively debate.

-TBI