The word on the street is that the collapse of Ethereum (ETH) is inevitable and it is only a matter of time before it all falls down like a stack of dominoes. One of the reasons that ETH is headed towards a Doomsday scenario, is the fact that there has been a failure to scale the network to deal with DApps that need the network to process more transactions per second than the current limit of 25.
Another reason that ETH will die a natural death, is the fact that the gas fee on the network is high compared to others such as Tron (TRX) – which has free transactions. The natural order of technology is that developers will choose to create DApps on cheaper and faster networks.
Ethereum developers are working on a way around all these issues. One of the most recent efforts is the agreement to postpone the Difficulty Bomb by implement new code in the next hard fork of Constantinople. This new code will keep ETH in the clear for about one and a half years further meaning it is not a permanent solution. This is where Stellar (XLM) comes in to play.
How is Stellar (XLM) Greater than Ethereum?
A team from the StellarX decentralized exchange recently ran their own at-scale load tests on the Ethereum network and the results were scary. The research they did revealed that Ethereum was being used by entrepreneurs for all the wrong uses. As earlier mentioned, high costs on the Ethereum network and slow performance cull the entire ecosystem.
One of the strengths of Ethereum, as highlighted in the report by the team at StellarX, is that if you are building a distributed computer program with no sole owner and no centralized decision-making apparatus, Ethereum was a great choice. One such example is the Augur project where you need a fully automated, ownerless way to make decisions about real-world events. This is done to circumvent regulatory enforcement which cannot pinpoint a central ‘bookmaker’ on the betting platform of Augur.
But many blockchain companies are using the Ethereum network for tasks it cannot handle to the desired expectation. Such DApps are for gaming, trading, finance, and others that need a high throughput with low transaction fees.
If it is such applications that developers want, then the Stellar network can provide the qualities needed.
The transaction fee on the Stellar network is considerably small when compared to that on the Ethereum network. There are two values used to calculate fees on the Stellar network: Base fee (0.00001 XLM) and Base reserve (0.5 XLM). The fee for a transaction is the number of operations the transaction contains multiplied by the base fee. This means that for the fee to total 1 XLM, it would have to contain 100,000 transactions. The cost of 1 XLM right now is $0.22. This is still cheap on the Stellar network.
When it comes to transactions per second (tps) on the Stellar network, the network has been known to handle 1,000 tps comfortably. This figure is 40 times higher than that of Ethereum at 25 tps.
Summing it all up, the Stellar network is a better candidate for DApps that require a higher throughput and lower transaction fees. Ethereum, on the other hand, has enjoyed the spotlight and perhaps this is why entrepreneurs keep using the platform for all the wrong applications. Some projects initially on the ETH network have migrated to Stellar after the developers realize the roadblocks on the ETH network as highlighted above. With time, this number of migrating DApps is sure to grow as the technical capabilities of the Stellar network continue to be known in the crypto-verse.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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