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Tuesday, November 29, 2022

Ethereum’s Popularity Has Its Pros And Cons According To a16z

Andreessen Horowitz, a crypto venture capital company, presented its latest state of the recent study this week, including the firm’s thoughts on Web3 and the Ethereum ecosystem.

Web3 is the keyword for 2022, and it alludes to the internet’s progression beyond its current status. The “internet as we know it” is faulty, according to a16z, since huge tech oligopolies and digital authoritarianism rule it.

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It said that from the benign beginnings of Web2, businesses had grown more “extractive and less cooperative,” probably alluding to online behemoths like Google (GOOG) and Meta (previously Facebook – FB), though it didn’t say so.

Demand On Ethereum Is “Unmatched” Despite The Network’s High Transaction Fees

Web3, on the other hand, is unique in that it brings together network participants to work toward a similar goal: the network’s development and health.

Users may own a piece of the internet and have control over their data, which is the polar opposite of the existing situation, which is dominated by a few data-harvesting monopolies. Web3 is a multi-chain environment, according to the paper, with Ethereum (ETH) leading the industry with 5.5 million user identities and 1.1 million transactions every day.

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While there are several competing blockchains, such as Solana (SOL), BNB Chain (BNB), and Avalanche (AVAX), the demand for Ethereum block space is unrivaled. Ethereum also continues to draw the most developers, allowing it to stay ahead of the pack. Nonetheless, the business cautioned that Ethereum’s popularity is a “double-edged sword,” since scaling concerns have resulted in exorbitant network fees during peak demand periods. Following a much-hyped nonfungible token (NFT) launch on May 1, average gas prices soared to over $200 per transaction. Layer-2 networks have developed, competing to reduce prices; nonetheless, there is now far more choice than ever before.

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