Ethereum’s midlife crisis
(and has anyone ever actually seen a smart contract?)

On March 25 the FT published a long article devoted precisely to Ethereum’s midlife crisis.

It takes its cue from the recent slides in the price of Ether (the native cryptocurrency of the Ethereum blockchain), which have been sharper than the admittedly obvious ones of its competitors, Bitcoin, XRP, Solana, just to name the main ones. On January 20, Ether was worth $3,280, after passing $4,000 in early December 2024, while at the time of writing this post it is worth just over $1,800, little more than half.

The most interesting point of the article is where it stresses that Ether doesn’t warm people’s hearts, and that it’s hard to get passionate about purely engineering matters. The migration from Proof of Work (PoW) to Proof of Stake (PoS) had waved the green flag of a transaction validation method (consensus) requiring 99% less energy. But who remembers that now? Hard to get excited, especially in this era of second thoughts and backlash. And besides, Bitcoin happily carries on with PoW, the most energy-hungry (but secure) method there is, and nobody seems to care anymore. It’s much easier to remember the transaction costs (fees) on Ethereum, which have reached as much as €15 (f-i-f-t-e-e-n! euros), when a SEPA bank transfer costs 1.

And DeFi? Decentralized finance, with its promise of whirling smart contracts changing our relationship with the financial world? Missing in inaction. Who has ever seen them for real, outside of conferences? As the article points out, “The whole DeFi vision seems much further away now than it did a year ago”. Indeed, the vision of a single, fast, transparent blockchain-based system gradually replacing the myriad of proprietary banking systems is fascinating, but the practical challenges and the resistance of the financial system remain extraordinary to this day.