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Ether (ETH), the cryptocurrency that ran off the Ethereum blockchain, kick-started the year at $755 and by mid-January rose to over $1,400. However, since then the coin has been unable to halt a slide which has seen the price of ETH fall from its January high of $1,417 to its present price of roughly $400: a 71% decrease.

Scale this up to Ether’s market cap and the sum loss of value comes in at just under $86bn since the beginning of 2018. To put this in perspective, that’s a value larger than the GDP of Sri Lanka ($84bn), a country of 21m people, disappearing over the space of three months.

But is this reason to be concerned and does the price reflect a fundamental flaw/attribute in the Ethereum project?

The fact is, there are several serious and unresolved questions around the Ethereum project.

1 – How will it scale? There are several potential solutions, but which one will win?

2 – Will the supply be capped?

3 – Is it moving from Proof of Work to Proof of Stake, and if so, when?

4 – Will Ethereum maintain its visibility if the ICO model falls away?

5 – What happens if the project is forked to make it resistant to the new Bitmain ASIC miner?

There are others, of course, but these should serve to highlight the sheer magnitude of the uncertainty surrounding Ethereum right now. And of course, these don’t even include basic business risks such as competitive projects, regulatory influences, market fluctuations, and unforeseen black swan events. So perhaps it’s no surprise that the price of ETH has taken such a battering.

Should The Ether Supply Be Capped?

Earlier this week, Vitalik Buterin staged his own April Fool’s on the Ethereum community, by proposing a hard cap on the supply of Ethereum. Given the catchy name of Ethereum Improvement Proposal 960 (EIP960), Buterin’s GitHub post suggested that Ether should be hard capped at 120m tokens: twice what was sold in the original sale back in 2014.

However what had originally began as a jest has now become a serious proposal for the Ethereum community: should the supply of Ether be capped? Leaving aside arguments for and against limiting the supply of Ether, Vitalik’s ‘meta-joke’ set the proverbial cat among the proverbial pigeons.

Debate is currently raging across all forms of social media: the Ethereum subreddit is full of posts urging the community to vote either for or against the hardcap: type ‘ether hard cap’ into Twitter and be amazed by the growing number of 140-character statements and questions filling the social media platform to the rafters with #EIP960 related content.

Regardless of the merits of EIP960, the surrounding debate highlights that the Ethereum project is still in its infancy, with the developers, and the community, still having to make a large number of decisions as to how they want the project to reach maturity and mainstream use.

Moving From PoW to PoS

Take the Casper Protocol, Ethereum’s Friendly Finality Gadget (FFG), which seeks to change how the blockchain reaches consensus. At present, Ethereum uses Proof-of-Work (PoW), which uses ‘miners’ to create blocks, to a Proof-of-Stake (PoS) system, where the creation of blocks, and the reward for doing so, is proportional to the amount of cryptocurrency that a user has.

As of this year, Vitalik and co-developer, Vlad Zamfir are “quite confident on the general principle” and the community awaits a final version with bated breath, but like an Ether hard cap, it is a proposal with no decisive evidence to show it’s in the best interest of the Ethereum project, or that it would even work on the platform.

To add to this there are also proposals to change the scripting language; a Plasma protocol to create sidechains and ease congestion on the Ethereum mainchain; a regulatory climate filled with uncertainty and competitors like EOS and Cardano, all offering similar platforms that threaten to poach users from the Ethereum community.

Is A Falling Price A Sign Of An Unhealthy Project?

A low price isn’t always a bad thing. When popular interest in Ethereum decreases it can give developers sufficient time to build and alter projects away from the baying crowd of speculators keen on making a few easy bucks.

Likewise, a falling Ether price shouldn’t be a cause for concern in the future of Ethereum. The project is bubbling away with dynamic and innovative means to address current issues: a laudable approach that may not only make Ethereum more attractive but will push the boundaries of blockchain knowledge, which can only make better implementations of blockchain later.

However, Ethereum’s path to decentralisation remains littered with unanswered questions, experiments and conjecture and it is this uncertainty which is preventing further investment into the project as people wait until they have a better idea before devoting funds.

The Cult Of Vitalik Buterin

Furthermore, although Vitalik’s incomparable personal influence will surely sway many within the Ethereum community, even geniuses are known to err; and the future of the decentralised project could be left in the hands of one man. A 62-point Twitter rant directed at Craig Wright, culminating in calling Wright “crazy”, did nothing to suggest that Buterin will always be as composed as the community might like.

Ethereum is at a crossroads, and uncertainty is currently driving the price of ETH down. Although the project is full of exciting potential, concrete decisions will have to be made and then implemented: the price of Ether won’t surge until that happens.