Ethereum has become developers’ top choice for building dApps and protocols. Everyone thought Ethereum was so “in there” until an article was published on Stellar’s blog detailing the strengths and mostly the weaknesses of Ethereum as a blockchain platform for various blockchain related uses.
According to the paper, EThereum, although a wonderful programming platform is not ideal for just any purpose, especially not for ICOs. Among the strengths of Ethereum listed was its ideal suitability for building of decentralized, “ownerless” apps which its creator Vitalik Buterin mentioned when the platform was launched.
However, it has many lapses which have been exposed as a result of programmers trying to use the platform for things it wasn’t designed to support. For instance, Ethereum blockchain is not very ideal for timely payments and trading of cryptocurrency tokens because of its slow nature.
For instance on the bitcoin network, although transactions are prioritized first by transaction fees, even free transactions that have stayed in the queue for a long period are given priority due to “age” over those with fees. Alas, it is not so with Ethereum. This means you may be the first on the queue to make a transaction with fees or what is known as “gas” gas price but your transaction may not be processed first because the platform uses a different system that recognizes and gives priority to transaction based on what I call “nonce matching”.
For instance if a user X has an account with several transactions, each transaction on the network is processed using a transaction nonce and an account nonce, both of which are numbers. The network then uses the two numbers to determine if the transaction should be processed or not by trying to match the transaction nonce and the account nonce. If the two numbers match, the transaction is processed. Otherwise, it remains on the queue until there is a match between the two.
This means a transaction that comes hours later may be processed immediately if the two nonces match each other while earlier transactions are left unattended. This is what is responsible for the slow nature of the Ethereum network and the piling up of unprocessed transactions that Tron CEO Justin Sun spoke about. Developers were troubled by the long chain of unprocessed transactions and advocated that dApps be deployed to Ethereum Classic.
Another major problem that makes the network not ideal for payments is the fees. Apart from the transaction piling problem, the network automatically raises transaction fees when it detects several transactions coming from many different accounts which should actually be the opposite. As a result, transactions that initially had enough fees get “priced out” as more transactions hit the network.
This can lead to transactions hanging on the network probably until the traffic reduces and the fees drop again for very old transactions to be processed. This is what makes it unsuitable for ICOs and any form of transactions or trade in crypto tokens for that matter. For dApps and decentralized systems, yes but for payments, don’t go there.