Ethereum has been the dominant platform on which to build tokens. And yet, there are serious problems with its scalability. In 2019, Vitalik admitted that the network is almost full / clogged up:
Also, the transaction costs would be getting out of hand. I remember interviewing the Kik Messenger team about this on our panel at the Blockchain Tech Summit in NYC:
Even one successful project can clog up the network. Here is the inside story from CryptoKitties:
The network started to become really clogged. All of the blockchain read activity caused our daily requests to explode from 2 Billion/day to over 4 Billion/day… overnight! In addition, the pending transaction queue kept rising, which means the network wasn’t processing fast enough to clear out new requests. When that happens, the miners reset the gas price to make transactions cost more, and then market forces will control the queue. So, all of a sudden, the fees to buy the kitty cost more than the asset itself. That was not good, and was the trigger that we had a problem. That threatened to kill CryptoKitties entirely, because when the fees are so inhibitive, it’s game over.”
We will need a new architecture for crypto to power everyday payments. Otherwise, these tokens will continue to have a reputation as a “scam” because they can raise money but can’t actually be used.
Well now that the DeFi bubble has burst we are seeing gas fees normalize a bit. About time because they were pricing everyone else out of making transactions and stifling growth.
Alright, so it’s years later. And we are still experiencing the same issues on all the blockchains. I found this interesting quote I wanted to share:
By the way, I’ll point out that monolithic blockchains are struggling to keep up even with this tiny, tiny level of activity. Rollups & specialized DA layers like data shards are inevitable. Since I wrote that post, Polygon PoS has bumped their gas floor 30x, Solana has occasional instability (usually short-lived, but up to 18 hours downtime), Binance Smart Chain is in meltdown, Avalanche C-chain gas prices tend to skyrocket when blocks are full etc. All of these projects have seen any real activity for only a few months, there’s zero chance they can sustain over decades. The evidence is mounting, at this point I have zero doubts about the rollups, volitions, data shards & DA layers being pervasive throughout the blockchain industry. Sorry, you know I had to mention it!
It’s time to start moving past blockchains. We’ve finalized the architecture of the Intercoin base layer Protocol this year, and we might start building it in 2022!
Here’s a chart I found of Ethereum fees and their growth over the last two years… this is what happens as blockchains get mainstream adoption. Even if everyone moves to proof-of-stake, everyone has to store everything. The entire state of the blockchain. Unless they do sharding, too. And if they’re going to do sharding, they might look into Intercoin’s consensus mechanism and proposed protocol
Things change & Intercoin changing the game!