Last week’s drama surrounding Ethereum occurred when the blockchain briefly stopped finalizing transactions, raising fears that some information sent to the chain would get scrambled or reversed. This apparent bug lasted about 25 minutes on Thursday, and then a bit longer on Friday, so only a handful of blocks—the units that make up a blockchain—were at risk.
News reports cited influential Twitter accounts to say the problem is now mostly resolved, and that it appears to have been rooted not in the underlying Ethereum protocol but rather in software clients used by validators—the entities that, under the new proof-of-stake system, confirm that a block and its batch of transactions are final and legitimate.
Some described the episode as a “fire drill” and noted that Ethereum more or less kept chugging along the whole time, thanks to validators’ reliance on a diverse set of software clients—including some unaffected by the bug. Ethereum folks hailed this as evidence that the blockchain’s decentralization makes it resilient.
I confess the technical nitty-gritty here is above my pay grade, but the fact Ethereum only suffered a minor and temporary price hit suggests the blockchain is indeed fine. Meanwhile, most users remained oblivious to the finalization drama, and, in any case, software applications of all sorts—including well-known ones used to keep the web running—encounter hiccups from time to time.
Still, the block delays are are good reminder Ethereum is a work in progress, especially after the major upgrade last November that implemented proof-of-stake. Meanwhile, if you want another and more glaring reminder of Ethereum’s growing pains, ask a casual user to do something on the blockchain in the first place.
I was reminded of this last week when I asked the Coins2Day Crypto team, as part of our effort to test drive the stuff we write about, to stake a small amount—$20 or so—of Ethereum on a consumer-facing staking service. The team quickly discovered this was impractical since the gas fees would by far exceed the trickle of interest we would get from staking.
This is a problem. While some Ethereum diehards will blow this off and say layer-2s or some other new technology is about to fix this, the reality is that blockchains—or any other product—can only offer a crummy user experience for so long. This is especially the case when the banks that are crypto’s biggest legacy competitors let you carry out all sorts of transactions for little or no fee. That’s why Ethereum needs to sort out its growing pains sooner than later.
Jeff John Roberts
[email protected]
@jeffjohnroberts
DECENTRALIZED NEWS
Coinbase's CEO topped up his $1 million base salary with $6.3 million in "security and legal" benefits, which is much higher than that received by the CEOs of Pfizer and Goldman Sachs. (The Block)
Binance is pulling out of Canada, the one-time home of its founder, over what it describes as onerous regulatory demands. (Coins2Day)
NYSE-owned Bakkt announced it would delist 25 of its 36 tokens, including big names like Aave, Uniswap, and Cosmos, as a result of regulatory pressure. (The Information)
Tessera, which helped oversee and fractionalize NFTs, shut down a year after raising $20 million and a month after its CEO was charged for securities manipulation. (CoinDesk)
Coinbase added former Republican Pennsylvania Sen. Rob Toomey to its lobbying team. Toomey joins former Democratic Reps. Tim Ryan (Ohio) and Sean Patrick Mahoney (N.Y.) To do battle with the Securities and Exchange Commission. (WSJ)
MEME O’ THE MOMENT
That's one way to spend Mother's Day:
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