Big, But Not Big Enough: Impressions from EthCC
Three Things #129: July 21, 2024
Last week, I attended EthCC[7] in Brussels. EthCC is one of the best events in the industry, and I've attended all but one (thanks to Covid). This year, I was determined not to miss it. I appreciate EthCC’s focus on builders and its relatively low shill-factor compared to other events. Here are my thoughts on EthCC and Ethereum more broadly, following the event.
Thing #1: Tempest in a Teapot 🫖
“The difference between a mountain and a molehill is your perspective.” - Al Neuharth
I stayed at a hotel near the main venue in central Brussels, which was delightful. During the main conference week, the hotel was packed with Ethereum folks. One major project even had dozens of team members staying there. I kept bumping into friends and acquaintances in the lobby and at breakfast, which was really nice.
I stayed an extra day after the event ended. On the final morning, the crypto crowd had left, replaced by an older but equally large group: members of the International Fellowship of Flying Rotarians.
At breakfast, these boomer pilots were catching up, greeting each other, gossiping, and probably sharing photos and stories from their latest flying adventures. They were doing the same thing we Ethereans had been doing all week, but swapping crypto for small airplanes. They were just as excited about their conference as we had been about ours.
This made me reflect. Ethereum and blockchain often feel like big, important, central causes. We might think the world should care about them, that everyone should pay attention. On a good day, we may even feel like we’re saving the world, banking the unbanked, that sort of thing. We have our busy event calendar, fly around the world to meet each other, throw crazy parties, eat fancy meals, play silly status games, and beg for Raave tickets. We generally don’t pay much attention to the rest of the world—because we’re at the center of it, right? Aren’t we the visionary elites building the future, just waiting for everyone else to catch up?
But just as most Ethereum people aren’t aware of or don’t care much about the Flying Rotarians, I doubt they care much about Ethereum. And no, I don’t think one club is more central or more important to society than the other.
The point is: cryptocurrencies or microplanes, the Universe doesn’t care. From a cosmic perspective, we’re all squabbling kids playing with (and fighting over) toys in a sandbox in a tiny playground on the outskirts of a small, out-of-the-way town. We’re not so different from the Flying Rotarians. I’m sure they feel that their cause—whatever it is—is also big, important, and worthy of attention. I’m sure they feel like they’re making the world a better place too. They have a good claim, maybe better than ours: the Rotarians may be boomers, but they’re a goodwill organization that’s been around much longer than Ethereum. They’re active in nearly every country and have over one million members. I’m sure they enjoy their conferences as much as we enjoy ours, have the same squabbles and status games, and party as hard as we do in their own way. (Okay, we almost definitely spend more money, but I’m not sure that’s something to be proud of.)
I’ve said it before and I’ll say it again: Ethereum is a tempest in a teapot. It’s not unimportant, but neither are the Flying Rotarians. Nor is it especially important. It’s a niche within a niche. It’s a micro subculture with maybe a few hundred regulars and a few thousand occasional participants. (After all, there are fewer than 10k active, full time blockchain developers across all ecosystems, around 0.04% of the world’s software developers.)
Looking at things this way helps me put everything in perspective. It keeps me honest and humble and reminds me that we still have our work cut out for us.
Thing #2: Big, But Not Big Enough 🤏
“The purpose of business is to create and keep a customer.” - Peter Drucker
Ethereum events, and the Ethereum community in general, have a way of feeling massive. EthCC felt huge because there were dozens of events I wanted to attend each day, and more people and organizations than I could possibly keep up with. Ethereum itself feels big, too. With a market cap of half a trillion dollars, it seems pretty significant. But market cap isn’t everything. When I say big, I mean how big it feels in people’s lives.
How many people actually feel that Ethereum is a “big” part of their life? Valuable doesn’t always mean big. For example, Danaher Corp. is a nearly $200bn Fortune 100 company that the vast majority of people have never heard of. There are many other examples.
Ethereum is a big deal for some people. Let’s break it down. First, there are the investooors, especially those who made a lot of money during the ICO. There are probably no more than a thousand of these, maybe fewer, and I bet most of them aren’t around anymore. (Check out this original list of team members to see how many stuck around post-ICO.) Then there are the new investors. A few dozen VC funds have poured money into the Ethereum ecosystem. And of course, there are the people, projects, and teams working on Ethereum itself. But there probably aren’t more than a few thousand of these, and maybe even fewer.
Then there are people working on things built on top of Ethereum, possibly without even knowing it. This includes folks working on decentralized social networks, stablecoins, NFTs, or DAOs. But this group likely overlaps a lot with the previous groups, and there probably aren’t more than a few hundred of these people either. Only a few dozen of these projects really matter.
There are also a handful of cypherpunks and philosophers—people like me—who aren’t directly building or investing in Ethereum today but still consider themselves part of the community. We believe Ethereum represents a real chance to create positive change in the world. Sure, we’re naive, idealistic, and probably a bit romantic. This group is small, likely no more than a hundred people, but Ethereum looms large in our minds and dreams.
The largest group of Ethereum stakeholders might be the people who rely on Ethereum or a derivative technology (cough Tron cough), particularly for stablecoins, without realizing they’re using Ethereum. These coins might mean a lot to a family in Argentina or another country with bad monetary policy and an unreliable local currency. But few of these users understand what Ethereum is or what it stands for.
Sharp-eyed readers will notice I haven’t mentioned the most elusive group: the “users,” those who know they’re using an Ethereum-powered dapp. This should be the biggest group, but the reality is that true users—those who aren’t also investors, builders, or otherwise involved—are scarcer than vegans at a BBQ party. Even the user numbers reported by popular dapps are mostly bots and airdrop farmers.
So, what’s the total? A few thousand people, tops. That’s 0.000125% of the world’s population for whom Ethereum really matters. These are our “power users,” the ones who would be upset if Ethereum disappeared tomorrow. But if we’re honest, this number is embarrassingly small, given how long Ethereum has been around, how mature the infrastructure is today, and how much money has been poured into it.
Ethereum feels important and big, especially from the inside. It feels like the center of the universe, the only thing that matters. But the world doesn’t really care, at least not yet. That won’t change until we start delivering things—experiences—that resonate with everyday people.
Thing #3: Infrastructure Worship 🙌
"If you want to make an apple pie from scratch, you must first invent the universe." – Carl Sagan
A hot topic in the Ethereum community recently has been, “Too much infrastructure! Where are all the apps?” Even Vitalik felt compelled to weigh in.
This obsession with infrastructure isn't new. Given that Ethereum is infrastructure, it’s not surprising. I’ve never been to a Linux conference but I imagine it’s probably similar: a bunch of geeks nerding out about obscure, low-level technical questions. It feels niche and out of touch with what everyday people care about—applications and use cases.
As an infrastructure engineer and core developer, in a sense this focus on infrastructure is good for me. Working infrastructure fades into the background, and people don’t pay much attention to it. It’s nice being part of a community that celebrates infrastructure: where investors are willing to put money into it, where we celebrate achievements like reducing costs and increasing throughput, and where infrastructure R&D folks are treated like rock stars (maybe a bit too much).
On the flip side, I’m not sure it’s good for the world or Ethereum. Ethereum has a history of putting the infrastructure cart before the use case horse. Early on, it’s easy to justify focusing on infrastructure because it needs to be good enough to build on. But Ethereum’s infrastructure is pretty solid now. There’s almost nothing you can’t build on Ethereum, broadly speaking.
In fact, some of Ethereum’s biggest issues, like fragmentation and a proliferation of competing standards, come from too much infrastructure, not too little! This was a strong feeling I had in Brussels: another L2 rollup raising tens of millions? Another bridge/DEX/cross-chain MEV solution?
If Ethereum were a normal industry and if the universe were sane, existing infrastructure solutions would compete for applications, users, and revenue. This is happening, but there are so few users and applications—and so much premature financialization—that it’s more about investors and builders scrambling to create the next shiny infrastructure project that attracts VC dollars and attention, rather than, you know, actual users or revenue.
Infrastructure is tricky. Building it and investing in it isn’t linear. Sometimes you need to invest a lot of time and money into creating mature infrastructure before it pays off. Think of the interstate highway system. No private company could’ve built the entire system, given the time and cost. Maybe Ethereum is like this. Maybe we need a decade or two of building infrastructure, and then one day amazing applications will start to appear. That’s what the VCs would have you believe—they justify pouring billions into infrastructure that almost no one is actually using.
But my spidey sense tells me this won’t end well if we don’t make some changes. I think that tipping point is behind us and we’re out of excuses. As I said, you can build pretty much anything on Ethereum today; it may not be perfect, but it’s perfectly usable. Yes, we should keep investing in potentially groundbreaking new infrastructure like ZK proofs and FHE. But the only way this situation improves is if we, as a community, stop glorifying billions spent on copycat infrastructure and start demanding apps, users, and use cases. For example, there are hundreds of Ethereum events every year, but I’m not aware of a single one focused on apps and practical use cases. Let’s change that. (I could only find a single talk that refers to an actual app on the agenda for DappCon, which you’d think would be about apps.)
I’ve said it before, and I’ll say it again. Ethereum still has a window of opportunity to change the world. But that window is closing fast, especially with competition from projects like Solana that emphasize apps. You don’t change the world solely through infrastructure. You need apps and users, too. The honeymoon is over, and it’s high time to recruit those elusive users.