Joel Macdonald Discusses Ethereum Becoming the Yahoo of Crypto

Joel Macdonald explains that in technology, first versions rarely win in the long run. Apple didn’t create the first smartphone, Facebook wasn’t the original social network, and Amazon didn’t invent the online marketplace. Contrary to popular belief, Google wasn’t the first search engine either. However, despite not being first to the party, these technologies, platforms, and services—and those behind them—have enjoyed lasting success.

That’s as they took existing ideas, innovated, and ran with improved incarnations. These were incarnations boasting vital features previously lacking from their predecessors. On the same basis, growing numbers of tech industry professionals have suggested that Bitcoin may not be the be-all and end-all of cryptocurrency that it appears on the surface.

While by no means the first digital currency per se, it was the first to go mainstream, enjoy widespread recognition, and achieve the success that comes with it. Especially outside tech circles, Bitcoin has become synonymous with crypto like Hoover has with vacuum cleaners. Despite this, there’s an increasing belief that Bitcoin could still succumb to the so-called first-mover disadvantage.

Poised to step into its place, should that happen, is Ethereum. Ethereum is currently the world’s second most popular cryptocurrency and blockchain. The technology catapulted itself into its place at the forefront of the crypto market alongside Bitcoin by launching the first blockchain to incorporate smart contracts.

Joel Macdonald suggests that there’s no doubt that Ethereum’s pioneering smart contracts have proved advantageous. The asset is now valued at over $280 billion, second only among cryptocurrencies to Bitcoin’s current $1 trillion valuation. Like Bitcoin, millions of people now use Ethereum’s technology every day.

At the same time, Ethereum is at constant risk of being overtaken by competitors like Solana in a way that market leader Bitcoin isn’t yet. Solana—now the world’s second most popular smart contract crypto platform—has enjoyed growth of around 300 percent in the past 12 months. That’s as opposed to Ethereum’s much less impressive 45 percent growth in the same period.

Solana’s growth is credited to its faster service and rapidly improving technology, particularly against Ethereum. Like Apple with the iPhone or Facebook with its social network, it’s taken Ethereum’s smart contract offering, innovated, improved upon what was already available, and is running with an enhanced offering boasting crucial features still missing from its predecessor.

Meanwhile, Ethereum is becoming the settlement layer, and all the speed and cost efficiencies are occurring on the layer two chains. With that, comparing Ethereum to Solana isn’t necessarily as strong of a like-for-like example as it may seem at first glance.

That’s because, for a blockchain to enjoy long-term success, investors must appreciate the so-called Blockchain Trilemma. The Blockchain Trilemma—a term coined by Ethereum co-founder Vitalik Buterin—refers to the trade-off between three critical aspects of blockchain technology: security, scalability, and decentralization.

Solana is currently nowhere near as decentralized as Ethereum. This less-decentralized nature, in turn, increases the security risk of the blockchain. Compare the downtime between Solana and Ethereum, and those with a keen eye will quickly start to see the trade-off between decentralization and security/stability.

Ultimately, the name of the game here is adapt and improve or fall by the wayside. So, while Bitcoin’s critics have long suggested it could famously become the Yahoo of crypto—Yahoo having lost out to Google in the long run by failing to innovate quickly enough—it’s Ethereum that’s more likely to meet a similar fate to the one-time market-leading web services provider.

Joel Macdonald says that, by contrast, Bitcoin is playing to its strengths. Neither fastest nor cheapest among cryptocurrencies and blockchains, it remains the most decentralized – a concept much trickier for the competition to tackle. The market leader also remains firmly underpinned by its multi-billion-dollar global mining industry.

As such, despite Bitcoin’s often highly vocal detractors, it’s second-place Ethereum that currently looks most likely to succumb to a similar fate to Yahoo. With that, Bitcoin’s detractors aren’t necessarily incorrect in their critiques. They’re just looking at the wrong asset, with smart contact pioneer Ethereum far more likely to fall victim to, in this case, a less common instance of second-mover disadvantage.