The Ethereum network, which is valued at around $31.8 billion at the time of writing, is struggling to deal with scaling issues despite its lack of actual user base.
Over the past few months, Ethereum co-founder Vitalik Buterin emphasized that the vast majority of decentralized applications are either coded poorly or in a manner which unnecessarily bloats the size of smart contracts.
More importantly, he explained that the rapid increase in the average fee of Ethereum transactions is a direct result of the explosive growth of the ICO market. For instance, an investor in the BAT ICO included a $2,220 transaction fee in order to secure his investment in the project. Hence, Buterin noted that the average transaction fee is not an accurate measure to describe the scaling issues Ethereum is struggling with.
However, a new debate in regard to the scalability issues of Ethereum sparked after the controversial statement of FarmVille co-creator Sizhao Yang in which he stated that Ethereum transaction fees are much lower and the network itself is much more flexible than bitcoin. Yang emphasized that while bitcoin is facing a serious scalability issue, Ethereum network is prospering with appropriate scaling.
Yang’s statement in regard to the scalability of Ethereum is evidently non factual as various bitcoin trading platforms and digital asset exchanges including BTC-E and Coinbase halted trading due to the unstable operations of the Ethereum network.
On June 20, major cryptocurrency trading platform BTC-E issued the following statement: “More Due to the unstable operation of the Ethereum network due to the network load, the ETH withdrawals is temporarily unavailable.”
Jameson Lopp, engineer at BitGo, revealed that apart from the average fee statistic, Ethereum’s scaling issue is demonstrated with the growth of its blockchain size. Despite lacking actual decentralized applications and ICO projects with actual user base, Ethereum’s blockchain size surpassed that of bitcoin’s, exceeding 200 gigabytes.
