ICO Flaws Discussed with Ethereum Founder
In a recent interview with two of South Korea’s biggest news publication Ethereum co-founder, Vitalik Buterin, talked about the future of Ethereum its underlying scalability issues, and his views regarding the existing flaws in an ICO.
Ethereum Scalability Might Take Up To 2–5 Years
Unlike other blockchain networks which have been designed to handle particular and specific tasks, the Ethereum protocol was developed to function as a framework for decentralized applications. As a result, it becomes more difficult to overcome the existing issues pertaining to Ethereum’s scalability.
Buterin gave a rough estimate of about two to five years to solve most of these scaling issues and said that developers in the Ethereum Development community and Ethereal Foundations are actively working together to arrive at long-term solutions for effectively scaling the Ethereal network.
While commenting on the progress of the solutions, Buterin said: “I would say two to five, with early prototypes in one year. The various scaling solutions, including sharding, plasma and various state channel systems such as Raiden and Perun, are already quite well thought out, and development has already started. Raiden is the earliest, and its developer preview release is out already.”
Buterin Talks About the Merits and Flaws in ICOs
Since the start of 2017, ICOs have been one of the most popular and lucrative ways to raise funds for blockchain startups. Estimates show that till now, ICOs have raised nearly $1.5 billion, with notable projects like Bancor and Tezos managing to raise hundreds of millions of dollars.
One of the major reasons ICOs have turned to be a popular choice for fundraising is that due to its decentralized nature, allowing open participation of investors in the distributed ecosystem. As a result, startups with little more than a concept and website can raise a lot of money very quickly.
However, Buterin says that most of the underlying issues and flaws in ICOs are born out of the centralized nature of ICO projects. Although ICOs are launched using the peer-to-peer blockchain protocol, they are mostly run by centralized teams. As a result, retail investors have little to go one except hype and superficial dressings such as the project’s board members and validity of the whitepaper; whereas traditional fundraising with VCs are fully vetted.
A majority of investors do not conduct comprehensive evaluations with regards to ICO projects. Thus, many experts and analysts have proposed to introduce regulations in the ICO market which would reduce scams and funnel focus on projects with real intentions. On the flip side, many have argued that such a regulation would kill the basic purpose of this decentralized nature of funding.
Buterin has been quite involved in addressing such ICO issues. He further plans to create a private fund to provide the necessary capital to all the non-profit and open-source scaling projects in Ethereum, the first of which may be Raiden.
