Ethereum blockchain is the new San Francisco

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Remember the “Silicon Valley Technology Bubble”? In the early to mid-2000s, some of the most famous and successful technology companies in the world were born in the San Francisco Bay Area. Facebook, Google, Salesforce, Twitter, Tesla and Lyft-the list itself may account for half of this article. From the obvious energy to the potential of the network, one thing is certain: San Francisco is an ideal place.

For many people, San Francisco today has lost its appeal. Throughout the city, the cost of living continues to soar. The rest of the residents pooled their money to pay the prohibitively high fees, and kept browsing Zillow to see where the grass was greener. It can be said that San Francisco has become a livable place for the working class. For many new and existing companies, San Francisco is no longer suitable and not ideal. Although it provided us with an early technology platform, the overcrowded and overpriced language environment still affected its reputation and the products it once provided.

This is not to hit the city of San Francisco, but to emphasize what is becoming the charm of San Francisco 2.0: Austin, Texas. The cheaper and more fashionable city of Austin is attracting a large number of San Francisco’s best companies and brightest people. Sound familiar? The blockchain community is undergoing a similar transformation.

If you are a developer, then Ethereum is your San Francisco-you have to build there. Ethereum hosts many of the most famous decentralized applications available today and truly outlines the blueprint for smart contract development. Ethereum today looks very different.

Just like the city of San Francisco, Ethereum has become too crowded and too expensive to retain its population. Limited scalability is forcing users to explore other options to avoid excessive natural gas prices and avoid network congestion. Keep the analogy: Developers are looking for Austin, Texas.

In the blockchain ecosystem, you can see something equivalent to Austin in similar attractive chains (such as Solana, Binance Smart Chain or Polkadot, etc.). The rise of non-fungible tokens has even pushed update chains such as Flow to the forefront as alternative options.

New chain store, who dis?

There is no doubt that despite the increasing popularity of NFTs, decentralized finance is still at the core of the crypto ecosystem. Among other things, the continued rise of DeFi has revealed two key concepts:

  • Decentralized finance will (most likely) attract the most mainstream institutional capital.
  • Ethereum no longer has the ability to cope with the expanding decentralized economy.

related: Eliminate the possibility: why DeFi can rebuild trust in financial services

Therefore, the alternative chain of Ethereum has received unprecedented attention from developers. We have seen products like Polkadot, Moonbeam, Polygon, Binance Smart Chain and Solana not only challenge Ethereum, but actually win the favor of developers.

It may be possible that instead of completely abandoning Ethereum, developers are just testing these alternative chains. Maybe the developers didn’t give up their $3,500 monthly San Francisco apartment, but they sublet it when they rented an Airbnb in Austin.

related: DeFi users should not stand by and wait for Eth2 to make big strides

Of course, the list doesn’t stop there. Many other chains are fighting Ethereum. Similarly, Austin is not the only popular destination. Miami, Denver and Toronto all welcomed transplants in the Bay Area.

Long-term impact

As more and more developers flock to new chains in search of a respite from high oil prices, it is questionable whether this is the new normal or just an experimental phase.

At present, it is difficult to predict whether free agent developers are turning to new chains as a temporary means to ease gasoline prices, or whether they will treat these chains as their new long-term residences. One thing we can say with absolute certainty is that alternative chains are threatening the long-term development monopoly of Ethereum.

related: Where does the future of DeFi go: Ethereum or Bitcoin?Expert answers

One of the most persuasive factors is the release of Ethereum 2.0. The upgraded solution is expected to improve the efficiency and scalability of the Ethereum network, thereby alleviating the most worrying pain points of the current blockchain.

related: Ethereum 2.0: Less is more…more and more

At the same time, San Francisco has had the largest rent decline in the country in the past few months, with costs falling by 23% at the beginning of this year. San Francisco is trying to attract people with its “2.0” unveiling event.

related: Eth2 is the neutral infrastructure of our financial future

Now there is a question bothering Ethereum and San Francisco: Is this enough?

Although it is difficult to determine the number of developers on Ethereum, we have seen a 21% drop in the number of new immigrants to San Francisco. If there is any indication that if Ethereum does not solve its problem areas in the near future, it may risk its customers permanently losing the alternative chain.

Both Ethereum and San Francisco have become the key to the development of their respective ecosystems. In fact, their blueprint is the basis for building and modifying these exciting new alternatives.

With the reorganization of the blockchain community and the opening of boxes by new apartment tenants, it begs the question: Which blockchain do you live in? It is hoped that it will provide less network traffic, lower gasoline costs, and be able to handle a large number of new immigrants. If not, maybe it’s time to consider taking action.

This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed in this article are only the personal views of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Alex Wayne He is the co-founder and CEO of IDEX, a cryptocurrency exchange focused on performance and security. His career includes software development, including working time at a market analysis start-up company acquired by IBM and time as an analytics project manager at Adobe. Before joining IDEX, he led the product management of Amazon Logistics capacity planning. He has been working for cryptocurrency startups since 2014, and with the launch of IDEX in 2018, he transitioned to full-time.