How Dapps will kill Ethereum
As you may have recently read, Bancor's ICO collapsed Ethereum's Network. These facts are important to know when trying to understand the future of the ETH:
".. Ethereum can handle around 15 Ts./sec before transactions are rejected. You might think: “Well, that’s more than Bitcoin with 7 Ts./ sec” but here’s the catch: Ethereum is not about coin transactions only, the founders sold the project as the world’s universal computer to handle everything from decentralized Ubers to P2P-cloudstorage and more. According to their community there’s absolutely no limit to what this brilliant system will achieve. Maybe it’s time to see where things are today.
The network is headed for around 200k “transactions” a day. A number Bitcoin saw around a year ago. Notice the exponential rise over the last few weeks, where is it coming from? The price of ETH is 1 factor for sure, but as devs start to make websites like “Etheroll” things add up quite fast. A 12 second block only allows for 180 transactions. This means that 200 active gamblers can take up all the Ethereum mining resources. And this is just 1 Dapp. What if we see Dapps like Gnosis, Augur and others becoming populair?? Bitcoin has the luxury to be a “transaction only” system. They still have some time left before they reach 7 Ts/sec. Ethereum allows for interactions next to transactions. Miners have to calculate stuff on the Ethereum Virtual Machine (EVM)and there’s only room for 15 transactions a second so far. Vitalik Buterin is successfully selling his project to half the planet claiming that “sharding” will be the magic sauce to fix all scalability issues:
Founder of Ethereum Vitalik Buterin claims he has found the ultimate solution to the problem of scalability haunting cryptocurrency networks. That will be made possible with lightning networks and sharding.
Well, how is this ultimate solution working out so far? Let’s look at the Ethereum blog to see where they stand:
Metropolis is the next major planned hardfork for Ethereum. While Metropolis is not quite as ambitious as Serenity and will not include proof of stake, sharding or any other similarly large sweeping changes to how Ethereum works, it is expected to include a series of small improvements to the protocol…
Clear, stuck around a 15 Ts/sec. limit for the coming period as well. That’s around 1,3 million transactions a day and we’re heading there with exponential speed as Ethers became the new Tulips and Dapps are doing what they supposed to do: interact with the Ethereum blockchain. If Etherol reaches only a tenth of Just-Dice’s popularity (check their stats here) all mining capacity is filled.
Some blocks already show 99 transactions as they take quite a long time to be mined. Imagine 2 or 3 populair Dapps interacting with the blockchain. They would take up all mining capacity, killing the creativity of a lot of Dapp developers.
The Ethereum representatives should stop overhyping their project and come up with a near term real solution (if any) to the scalability issue. They should also stop to deceive their community with quotes like:
After the initial basic sharding (which will result in the implementation of Ethereum 2.0) Ethereum 3.0 will be developed — a blockchain system that will be capable of infinite sharding.
So far we’re stuck around 15 Ts/sec. and there’s no single solution coming in the next few months/year. Chances are big that Ethereum will kill itself before the innovation arrives. Miners will exclude a lot of Dapp interactions as they can only fit a certain amount of “people” in a room. Ethereum is not a worldcomputer, it’s a small virtual machine with quite some scalability issues.
Don’t believe the hype."
Sources:
https://medium.com/@yobanjo/how-etheroll-and-other-dapps-will-kill-ethereum-e973d8e1c465
Follow me: @samwara
Really good analysis, thanks! Do you think EOS will be Ethereum 2.0 then?
Now the buzz around ETH is growing. When the euphoria starts to fade, and what will be actual - we'll see)
This was a great post and a solid warning of the limitations of the Ethereum network. Beyond even the transaction limits, there is tremendous hype behind the platform and with so many ICOs being placed atop the platform could create major bottlenecks. Forget the fact that many of the ICOs will likely fail and cause other prevailing issues with how a majority may view ETH like the DAO did last year. Only time will tell.
I participated in the ICO and I had countless transactions that were not processed successfully. At least 10 times if not more. I was able to get my BNT in the end. When I decide I wanted to buy more it was impossible. Every transaction rejected.
Thanks @samwara, I needed to hear that.
I have been considering to buy some, I think I will wait till it drops under $180
Any suggestions? ty
i think all new currencies now will have a tendency to grow. Some faster, some slower. But in the future their problems and limitations (if any) will become obvious. In case of BTC its already clear to many. I dont have idea when that happens exactly) looking for information, analyze and make decisions
thanks for the reply
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Thank you for this valuable and interesting information!
Was thinking the same thing from the beginning of this distributed VM concept. It will be interesting to see how things turn out, especially considering the fact that most of the new ICOs use some kind of smart contracts.
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://medium.com/@yobanjo/how-etheroll-and-other-dapps-will-kill-ethereum-e973d8e1c465
Great info here my friend
I am wondering if this will affect steem in the future. Isn't steem on the ethereum blockchain?
No, it has it's own.