The technical standards for Ethereum's blockchain smart contracts, ERC20, have revolutionized fundraising and disintermediate banks, venture capital and crowdfunding platforms such as Kickstarter with true peer-to-peer funding.
In its first three years, Ethereum has leveled the playing field for startup funding that was once the domain of VC investors in very specific areas such as Hong Kong, Tokyo or New York. Now people who have never met from other parts of the world could essentially donate to a project. The informal nature of the ICOs was also a poisoned chalice. For example, the 2016 attack on ICO funds promoted for the Decentralized Autonomous Organization (DAO) has led to a schism in the community and the creation of the Ethereum Classic.
But Ethereum has also suffered from scalability problems since its inception and is able to handle only 14 transactions per second, compared to Visa 24,000 per second, causing network congestion. Last year, one of the most popular DApps, Cryptokitties, infected the network.
Ethereum is preparing for a difficult fork from Ethereum Metropolis version 3.0 to version 3.1, Constantinople, by October, which will make transactions more efficient and reduce commissions. Also four proposals for improvement of Ethereum (EIP) are tested by the developers on the network. Several downsizing solutions are being worked on, including network sharing (logging in smaller blocks) and a level 2 solution called Plasma, which would work similar to Lightning Network for Bitcoin.
There are over 700 DApp listed on Dappradar and over 1,700 listed on the State of the DApps community website (although most of these are inactive). If Ethereum becomes "Blockchain 2.0", it is urgent that the network be reduced to thousands of transactions per second before being usurped by superior technology that can do it.
Sharding and migration from a game-proof work-testing protocol are the imminent priorities for Ethereum. According to Ethereum researcher Justin Drake, the two objectives were merged into one project instead of being treated separately, with the transition to the Casper PoS protocol planned for 2019 and the two-step implementation of the sharding in 2020 and 2021.  Ethereum has used a bitcoin-like proof-of-work mining algorithm similar to SHA256, the most recent SHA3, before completely removing mining with a proof-of-stake algorithm. This migration will be done during "Ethereum Ice Age" – a period in which the difficulty of mining the PoW is exponentially brought to a point where it becomes impassable for mine and is expected to start in 2020.
Ethereum is also in a rush to switch to a PoS protocol before ASIC chips (specially built processors to extract ETH) overwhelm the hash rate of the network, making it susceptible to attack. Some believe the development team is not taking these threats seriously enough.
Hedge funds are also starting to take short positions in ETH because of slow progress in improvements.
But with 17,000 nodes managing the network globally and a community of around 250,000 members, the Ethereum network effect could reach a critical mass before it is beaten by a competitor.