Ethereum is a dead chain limping

Congestion on Ethereum has yet again led to high transaction fees and inconsistent confirmation times that can be deemed as unacceptable in any point in time in the history of commerce, let alone at a time where technology and competition has afforded users better options.

More at eleven.

It is clear that anybody that has chosen to build on Ethereum can only fall into one of two categories: either disingenuous with no intention to add value in the real world, or naively they have not put in enough thought into how they will be able to grow their business long term by default since ETH is already not able to handle its current level of transaction volume so the scope of customers a project can attract is limited at best.

The fees have been steadily rising on Ethereum for the entire year, topping an average of $14 per transaction during September 2020 before the ‘DeFi’ fee explosion this week that saw fees spike over $100 per transaction. In comparison, Bitcoin SV has averaged about 1/50th of a cent consistently during the year and continues to be cheaper the more it scales.

Ethereum is a dead chain limping

Source: BitInfoCharts

Scale is not a unique term to blockchains, it is always the question that any serious business will ask themselves if they want to move beyond the reach of the current scope of operations, with resource, time, cost constraints that their current reach has and expanding this all whilst increasing margins and keeping costs down.

It doesn’t matter about the quantity of ICOs, tokens or DeFi projects there are on Ethereum. Those that have chosen Ethereum have up until this point not thought far ahead or big enough and have already locked themselves into a dead end.

Let’s compare the metrics of the two blockchains that have the highest transactional usage and how they stack up.

 

 

ETH

 

BSV

 

Market Cap

 

36 Billion (2nd)

 

2.9 Billion (10th)

 

Price

 

$402

 

$159

 

Total Supply

 

No hard cap

 

21 million cap

 

Block size limit

 

8,000,000 GAS
(Max 380 tx per block)

 

Unlimited
(Unlimited tx)

 

Tx/second maximum capability

 

30

 

10000+
(Unbounded scaling)

 

Instant transactions (zero confirmation)

 

No

 

Yes

 

Total transactions in 2020*

 

194,777,635

 

142,961,696

 

Maximum transaction on a single day in 2020*

 

1.2 Million

 

5.5 Million

 

Average daily transactions in 2020*

 

788,573

 

578,792

 

Average cost per transaction in 2020*

 

1.83 USD

 

0.00035 USD

 

Median cost of transaction fees in 2020*

 

0.79 USD

 

0.0001 USD

*Data is for the period of January 1 2020 – September 3rd, 2020 at the time this article was published. (Source: Blockchair)

It’s a nice utopian narrative that there will be many blockchains that can co-exist all doing similar functions and that irrespective of things like speed and costs, that users will continue to be ideologically driven to a name or a community.

This is a fallacy. At the end of the day the end user of your product will not care about hobbyist ideologies, they will not tolerate burning through money for inconsistent confirmation times. 

Businesses, enterprises and users all need certainty in commerce. All types of users in commerce want to have lowest cost and have the guarantee that the transaction will be processed in an acceptable service level agreement according to the needs of the goods or services they are providing.

The combination of speed and cost is what ultimately accelerates velocity of usage, not one or the other. Certainly not neither.

The promises of better scaling solutions like Ethereum 2.0 that are ‘coming’ are a match made in heaven for the scam ICOs and scam DeFi projects that have caused the bottlenecks of the network in the first place. Filled with empty promises that only serve to buy more time to kick the can down the road. You could say in some ways, the Ethereum protocol and the projects that have been built on it subserve each other to keep the illusion going longer.

However for any serious businesses or developers out there that have fallen into this trap, Bitcoin SV is technically superior in every way vs Ethereum. BSV currently has real unbounded scaling, several magnitudes cheaper transactional fees and higher transactional throughput capability thousands of times more than that of Ethereum.

Bitcoin SV has broken records on several occasions this year. The biggest block so far has been a 369-megabyte block which had over 1.3 million transactions. BSV has proven that it can handle various types of transactions from micropayments which are barley fractions of a cent to handling large data storage, to anything in between.

With the Ethereum ship hitting the iceberg, the life boats remain largely vacant for now. If there is an analogy that we can tie back to the current events on the Ethereum network, it is that the positions on the lifeboats to evacuate will ultimately reach capacity and delaying your spot could come at an enormous cost.

That must mean that anyone that willingly chooses to stay on the sinking Ethereum ship must believe in the back of their minds that they are capable swimmers that can survive in the harshest conditions of the stormy Atlantic Ocean.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.