Computer scientist Adam Back caused a stir on Twitter midweek after likening Ethereum to a Ponzi scheme.
Back, the well-known creator of Hashcash which is credited as a reference in the Bitcoin whitepaper, made the comments in a thread which also cast aspersions on Ripple, Cardano and Stellar.
The CEO of Blocksteam went as far as labelling these various cryptocurrencies alongside well-known cryptocurrency-focused Ponzi schemes including Bitconnect and Onecoin as well as infamous Ponzi figures Bernie Madoff and namesake Charles Ponzi.
In a thread of comments, Back pointed to Ethereum’s 70 percent premine of its native token as a reason for labelling the project as a Ponzi scheme.
The statements were met with varying comments from industry experts and cryptocurrency enthusiasts, before Ethereum’s co-founder Vitalik Buterin entered the fray.
Buterin hit back by labelling Back’s comments as ‘tired old propaganda’ while highlighting the work being done by the Ethereum project to upgrade its systems to an eventual proof-of-stake system.
Binance founder Changpeng ‘CZ’ Zhao also briefly dipped into the conversation, saying that decentralization allowed different opinions to flourish before encouraging the conversation to continue.
DeFi usage sees Ethereum surge
Back’s comments come at a time where the Ethereum network has seen a surge in usage primarily driven by the success of various DeFi projects.
As reported by Cointelegraph, Ethereum set a massive milestone in July as it surpassed Bitcoin in terms of daily settlement value by blockchain. Once again this is largely due to the amount of DeFi projects and DApps that have been raising capital and operating on the Ethereum blockchain.
Another major contributor to the sheer volume of settlements being made on the Ethereum blockchain is Tether (USDT). Nearly 60 percent of Tether’s circulating supply is handled on the Ethereum blockchain.
July also saw the Ethereum-based DApps and DeFi projects and their respective ERC-20 tokens accounting for nearly half of the overall capitalization of the Ethereum ecosystem – according to data from research firm Messari.
ETH 2.0 draws closer
While the ecosystem balloons alongside the success of DeFi projects, it’s move towards Ethereum 2.0 continues.
The upgrade of the current protocol aims to address current concerns around the scalability of the network and its ability to handle an increasing amount of activity. The Ethereum network currently processes around 17 transactions per second – one of many areas that will be drastically improved by upcoming upgrades.
An eventual move to ETH 2.0, dubbed Serenity, will allow the network to achieve up to 100,000 transactions per second, powered by a move to sharding capability and proof-of-stake (PoS) consensus algorithm.
The implementation of Serenity is anticipated for the latter half of 2020, while this will only be the initial stages of the move to a full PoS, sharding system which is expected to be realized in 2021.