Lets start with a recap of Ethereum
It is the second largest Crypto Currency. Eth allows you to build tokens on there coin, this is very simple process. Anyone with a laptop and internet connection could make a Ethereum biased token in less than 30 minutes. All you do is set the rules for the admin, how many tokens you want and a few other settings and you can have your very own current and start a ICO.
What happened because of this?
Well because of this, not only have a few people created currencies. 1000s of people have created currencies on the Ethereum. The numbers are crazy already, currently there are over 600 currencies listed on coin market cap made and this number grows by around 2-3 token every day. Even the number of new tokens grows every month. So in a years time the number of new tokens each day could be 10-20.
So in a year from now there could be 2000 tokens on coin market cap alone and another 1500 coins. Totaling 3500 currencies. But due to failed projects the numbers wont be that high, I would say around 2500.
Cracks forming in the ice
A platform on Ethereum launched called Crypto kitties, this platform allows you to buy digital cats, bread them, design them and sell them. Link Here Cool Idea.
This is were things started going bad, as Ethereum was not currently built to handle the amount of transactions per second that the craze that Crypto kitties caused. So you might think that the transaction of Cripto Kitties would slow down and that would just be a temporary issue till the demand for digital cats lessens and the transaction comes back to normal.
Well that didn’t happen, they slowed the entire network down. Over 600 tokens and Ethereum were almost brought to a halt over a digital cat selling like crazy.
This is because of limitations to transactions per second over the network. I would say they will take action with updates to fix problems like this.
But this simply pointed out the Ethereum has its limits.
So much money and time has been invested into one system. So many people have all their tokens in one basket.
What would happen to all the tokens if Ethereum got overloaded, they could basiclly become useless with transaction times over 24 hours and no real way to use them because of it.
Or they might even get hacked. Have to do hard fork/forks or even be in a position that they can not get Ethereum back online, In this case every token will be rendered useless and have to change platform.
At this stage all is good, but NEO, Omni and Waves need a bigger share of the tokens. There is too much hinging on one door.
If I was a government wanting to disrupt Crypto and digital currencies for many good reasons, people taking money out of local banks, tax evasion, business tax evasion, illegal trade.
There would be a big target on Ethereum, Because you would only need to knock down one domino and they would all fall.