At the end of this month (July), the Ethereum public blockchain turns 10 years old. An inordinate amount of time in the world of crypto has been spent on discussing whether or not Ethereum will succeed and become the foundation for the next iteration of global commerce and finance. All this speculation is wasted effort. Ethereum has already won. The losers just don’t know it yet.
You may be tempted to discount my opinion because I’m a notorious ETH “maxi” and have been for a little over a decade now. Hear me out anyway.
Side note: Yes. Really. Over a decade. Vitalik Buterin got me started on Ethereum and in my prior incarnation as an IBM executive, I showed off IBM’s first foray into blockchain technology at CES in January 2015. That’s a story for another day, but I’ve been in this since the beginning.
Blockchains are, first and foremost, technology platforms. We talk about them like they are financial systems, but they behave, and they grow, like technology platforms. And if we look at the history of technology platforms, we can see some clear patterns emerging that Ethereum tends to follow.
First, it’s a winner-take-nearly-all business. IBM has 100% of the mainframe software business. Windows has 90% of desktops. Android covers about 90% of all smartphones. TCP/IP is about 99.9% of all network traffic.
This pattern repeats itself because computing platforms have two factors going in favor of a winner-take-all business model. First, zero marginal cost from adding users. Each additional user costs nearly nothing, so networks can add new users for free.
Second, network effects mean that more users make networks more valuable and, as a result, it’s extremely hard (but not impossible) for laggards to catch up with the leaders.
In the early days of platform development, it’s often easy for winners to come and go. Network effects aren’t big enough matter, and better products can sweep aside prior leaders. We saw this early in the world of PC and mobile devices as early leaders (Apple II, Commodore 64, and later with Nokia and Blackberry smartphones) were swept aside by impressive new platforms.
In all those cases, however, the platform “type” was itself very new (less than a decade old) and broad adoption was also relatively low (under 10% of the public). With Ethereum’s official 10th birthday at hand, we have passed by both of those metrics. By many accounts more than 20% of the U.S. population owns crypto and blockchain platforms are more than a decade old now.
