Chinese billionaire quits Ethereum in protest
Chinese billionaire quits Ethereum in protest
Ethereum

Chinese billionaire quits Ethereum in protest

By Marco Cavicchioli - 25 Nov 2021

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A few days ago, Chinese billionaire Su Zhu, CEO of Three Arrows Capital, declared on his personal Twitter profile that he had quit Ethereum.

Su Zhu and the protest against high fees 

Zhu, who had supported Ethereum in the past, claimed that Ethereum had failed its users in recent times, so he apparently abandoned Ethereum as a form of protest. 

The problem he raises is the very high on-chain fees that do not allow newcomers to make their first transactions at an acceptable cost.

In fact, in the last six months, the median cost of fees per transaction on the Ethereum blockchain has jumped from $2 to more than $20, making it effectively impossible to carry out on-chain transactions for small amounts. 

Suffice it to say that in the same period the median fee cost on the Bitcoin network fell from $3 to $0.6, mainly due to off-chain transactions with the Lightning Network. 

For Ethereum, second-layer solutions such as LN are not yet widely used, while the move to Proof-of-Stake which should reduce fees is still some months away. 

The question raised by Zhu is absolutely legitimate, not least because alternative blockchains with much lower fees, such as Solana, are emerging. 

China ethereum billionaire

Lightning Network: the best solution for Su Zhu

However, in a later tweet, the Chinese billionaire admitted that he had written his previous tweet in a fit of emotion, and softened his stance by arguing that it is not actually a real abandonment. 

In this second tweet, he actually calls for mass adoption of second-layer solutions for Ethereum as well. 

The resounding success of the Lightning Network, driven in particular by the mass adoption in El Salvador of the Chivo wallet, has clearly shown the true extent of the benefits of this type of solution, long opposed by a large part of the Ethereum community who considered on-chain transactions to be inherently better. 

The new decentralized blockchains

When it comes to low, or very low, amounts, on-chain transactions present too many constraints, not least that of execution speed. Second-layer solutions not only dramatically reduce costs, but also execution times, opening up new development possibilities that are simply not possible on decentralized and secure blockchains. 

Furthermore, considering that with the Taproot update of the Bitcoin protocol – which also introduced Schnorr signatures – the potential of LN has further increased, it is possible that this type of solution will not only facilitate the scaling of crypto transactions but will instead open the door to new innovations never seen before. 

If this happens, it is possible that something similar will be introduced on Ethereum. 

Marco Cavicchioli

Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".

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