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

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