The main benefit of Ethereum
At research, we’re not Ethereum maxis. If we were, SIMETRI would be the wrong place to be. Yet, more experienced of us value Ethereum above other blockchains. The reason? Peace of mind.
Since Ethereum clones and rivals started popping up, decentralization has become a meme. Ethereum maxis don’t miss a chance to attack other networks for being centralized, but at the same time, Ethereum’s competitors are more accessible to those with low budgets.
Networks like Binance Smart Chain (BSC) and Solana can be potentially great playgrounds for making money. Yet they aren’t that good for storing money.
You most likely already know what happened to BSC recently. With over half a billion dollars lost, the chain halted. If you haven’t heard about it, I suggest reading the summary from Christian. It’s one of the largest hacks in crypto history.
The particularly interesting tidbit about BSC’s hack was that the chain halted. Imagine having millions of dollars on it; it wouldn’t feel good.
Halts and reorgs aren’t BSC-specific, though. Solana pausing is no longer news, and Fantom almost tumbled because of only one user. Older chains like Ethereum Classic had issues like this too.
Let me supply another example if that didn’t make you feel uneasy about storing funds outside of Ethereum. Not so long ago, I learned that 3,900 USDC was drained from my Solana wallet.
I haven’t used that wallet for a while, yet somebody was able to sign transactions with it. I concluded that they could do it by sending some tokens to my account.
I wouldn’t be that disappointed if I actively used that wallet in a degen way. After all, we know by now that Solana is a large black box, and approving stuff there is very dangerous. That’s why using “burner” wallets is standard practice. But what if you didn’t even use the wallet?
I’m pretty sure this could be avoided by having a Ledger or a Trezor, which should be a default for anything more than $1,000, but I still think that no incoming transactions should open doors to your wallet.
Given that Ethereum had only one reorg a long time ago and judging by personal experience with the EVM account model, I think Ethereum can give us what other chains cannot give yet: security. It’s not the ideal security, but it’s the best available.
In my opinion, avoiding Ethereum in your day-to-day activities is fine. But, you can at least treat it like a bank: if you have a sizable amount of money, pay the banker a small percentage of it as a fee for services and sleep well at night.
Disclosure: The author of this newsletter holds ETH. Crypto Briefing and members of the research team hold some of the Pick of the Month coins mentioned in the table above. Read our trading policy to see how SIMETRI protects its members against insider trading.
