A StellarX Co-founder has published a new research project that describes why ICOs should not take place in the Ethereum Network.
The Big filter
The blog post begins by stating that Ethereum itself is not a bad technology, but that entrepreneurs are using the platform with wrong applications. The co-creator, who remains anonymous beyond the Christian name, believes these projects will go underneath, unless they specifically adapt to the strengths of Ethereum.
According to the report, all the data was collected by the co-founder and his team, who had an “at-scale” application on the Ethereum network for ten hours. In addition, all work, results and methods of the team can be found on Github .
The Strengths of Ethereum
According to the report, Ethereumis a good choice if developers are developing a distributed computer program that does not need a single owner or centralized decision-making tool.
In addition, the Co-founder says that most of the blockchain companies are just out to hand out digital tokens and handle transactions where Ethereum believes that it will disappoint users. For example, if a company wants to spend a token, trade users in real time, and ensure transactions, the StellarX team assumes that Ethereum is the wrong choice.
Weaknesses of Ethereum
It’s slow and it’s really very expensive, and it does not behave the way you want, both in the “one that does a lot” and in the “many accounts that make a few small cases.
Problem One: User Experience
The first problem that the StellarX team discovered was the queue method, which is considered abysmal for enthusiastic users. Christian compares this with the system “Please take a number”, which one experiences with a state institution. Unlike a government agency, the miners who operate the Ethereum Network are not responsible for the next “number.”
The Co-creator goes into great detail about the tests they did with Ethereum, but ultimately it’s about the user experience. The more people use the Ethereum app, the slower it works. That’s what happened to Cryptokitties , Ethereum’s first Blockchain-based game, which brought the system to a complete standstill, creating a backlogof nearly 30,000 transactions.
Christian explains that after only three hours of testing, the transactions now take eight hours to be confirmed. Improvements to the network like Casper and Sharding are promising, but will involve complex fixes that will go beyond the almost “maximum” complexity of Ethereum.
The Co-creator explains that a skyscraper is usually built on the ground and not on another skyscraper. That’s how the StellarX team describes the Ethereum scaling solutions.
Problem Two: Costs
According to StellarX, the cost is another issue that Ethereum faces. For example, the cost per user of the Ethereum application increases extremely fast as they add more accounts-in some cases. A StellarX experiment, costing $1,445 for an hour, when Ethereum’s gas prices were low, the team conducted several basic tests that performed 8 transactions per second. At this rate, these basic tests would cost $12.6 million a year.
The team compared these transactions to the traditional PayPal model and a model in which the company built on Ethereum. If the latter had been the case, StellarX concludes that 21 percent of the company’s net income in 2017, or $380 million, would have alone gone to Ethereum Network Feeds.
While more than 50 percent of the Ethereum Network’s ICO projects have completely disappeared after their token sale , it’s not surprising that the Co- founder of StellarX recommends the Stellar network as a solution.
It’s not Ethereum’s fault that developers demand technology, which they should never deliver. It’s the people who chase after last year’s ICO dollars, regardless of what the right tool is. Ethereous problems started with misguided entrepreneurs.
The Co-founder concludes that if developers and entrepreneurs “want to build a business,” they should build on the Stellar network, which they believe is optimized for digital asset issuance and high-volume transactions.