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Ethereum is NOT a protocol, you know things like TCP/IP and HTTP. The crypto world is in a mass psychosis. VC funds have blossomed on the thesis that L1s are the “protocols” for finance.

No, these are language and compute environments.

ETH was the first language to gain popularity for DeFi apps. But it was created before they knew what DeFI needs were.

We have seen this before… COBOL, Fortran, Lisp, C, JS, Rust.

Every language builds from learnings from the past and upon the needs of new domains. Old languages continue to be used, but many wane, new languages gain adoption.

ETH’s Solidity is COBOL.

To be clear:

- A protocol is a standard for messaging.

- A language is a standard for compute.

The former has longer and stronger network effects.

Bitcoin is more of the former while ETH is more of the latter.

There will be a ongoing market for better decentralised compute networks. Like COBOL it’s quite unlikely Solidity will be what we build DeFi apps on in say 20 years.

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Discussion

m2carbine 2y ago

jyap 2y ago

I don’t think you can compare a computer language which doesn’t have an inherent lock in.

A better comparison is a platform like AWS where there is first mover advantage.

Willy Woo 2y ago

It’s a great point since AWS captures the compute environment and shapes some of the language environment. Unlike AWS, blockchain L1s are notoriously hard to change once in production. Thus they become disadvantaged against challenger L1s.

Chakaruna (Bridge Person) 2y ago

Thanks for articulating this. I recently sold all my ETH for BTC, an internal debate I’ve had for literally 3 years. My head and heart say Bitcoin is the innovation. My greed knows that there is a significant chance ETH will outperform BTC in the coming years, however, for me its relatively centralization compared to BTC as well as PoS not being comparable to PoW (which I think is critical), I got out of ETH. Purely based on my fundamentals. I’m not a trader (been there, done that, had luck, got rekt) and so sticking simply to Bitcoin for now is the only thing I have time to understand. I hope in my lifetime I’ll see the fruits of my hodling, but even if that’s not meant to be, and BTC continues its existence, I’ll pass it along to my heirs. Until proven otherwise, this is the plan for now. Thank you, Willy. I’ve learned a lot from you over the years. Subscribed to your sub stack last cycle, always appreciated your charts and analysis.

Nick Seng 2y ago

Myself and many other bitcoiners have followed similar paths.

BITpartner.cz 2y ago

Sounds like story of my life, although I was never big ETH fan, but yeah. Basically all in BTC now here ....

8ecad31c... 2y ago

So could u maybe outline WHY this is important to understand for the +99% of the world who are not tech savy and pls as if u had to explain it to a 5 year old?

Willy Woo 2y ago

Key point is that a protocol has longevity and lock-in like the Internet’s TCP/IP and HTTP for the web. Meanwhile languages each have their time in the sun and then slowly lose favour. ETH is a language / compute environment so it doesn’t mean it will last forever like a protocol. BTC is more of a protocol. The time is coming when apps will not be written for ETH because it’s too long in the tooth, and too hard to build on.

suso 2y ago

gm! ☀️ As a developer, this is so true...

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Capt Stab 2y ago

An interesting side note - COBOL is still in production everywhere, the IRS and many global banks still run COBOL.

The irony is that the programmers who wrote the code are gradually dying and as Willy highlights the trend is for newer languages……. However some of the highest paying roles are for COBOL projects as demand outstrips supply.

Kane McGukin 2y ago

This was my line of thinking. Languages can last for a long time and go in and out of favor depending on the industry. Or they can die quickly.

Continuing to debate BTC/ETH is pointless, just my opinion.

They are two different things working on two different problems. It’s seems to me like bickering about which is better Mayonnaise or Mustard.

For different people each has it’s different purpose for different reasons.