Ethereum’s network has experienced extreme delays as a result of initial coin offerings (ICOs) clogging up transactions, indicating that the top two cryptocurrencies now experience scaling issues.
Over the last year Bitcoin’s scaling issues rose to infamy, with its block size debate and gridlock leading to social conflicts, slow transactions, and ever-higher fees. Ethereum may have seemed to be a breath of fresh air as a second option, with faster and cheaper transactions. However, because of the highly-popular Status ICO, Ethereum has now experienced similar congestion issues:
— Ryan Shea (@ryaneshea) June 20, 2017
The Status ICO pegged as a main culprit
The recent Status ICO received much of the blame for Ethereum working so slowly. Since the ICO started on the 20th, 28,670 additional transactions were added to the network, which on average processes about 8,710 transactions per hour.
causing severe congestion issues. As a result, at time of writing, 8,655 transactions are still pending on the Ethereum network. Bitcoin, by contrast, has 26,071 transactions backlogged at present.
As a result, several exchanges announced delays with Ethereum transactions and halted withdrawals:
NOTE: We are taking down Ether/ERC-20 tokens as the Ethereum network continues to experience extreme delays. Stay tuned for updates
— ShapeShift.io (@ShapeShift_io) June 21, 2017
Dash scales well now, but is working on better long-term solutions
Blockchain-based networks have the potential of becoming the victims of their own success and running into network congestion, and Dash is no different. However, Dash’s governance model allows the network to vote on funding and development decisions, including potentially firing the development team if they fail to perform, which increasing the likelihood that timely scaling solutions will be reached. Early last year, the masternode network was put to a vote on whether or not the block size would be increased when its limit was reached, and the network overwhelmingly voted yes.
Additionally, InstantSend allows these sudden periods of high network activity similar to ICO mania to go much more smoothly. InstantSend locks in a transaction, allowing it to “go through” instantly without the possibility of double-spend or failure while the miners catch up with confirmations as with similar proof-of-work cryptocurrencies like Bitcoin. This means that while total transactions are limited to the block size and interval, priority transactions can go through instantly without spiking fees across the network. Under high-stress moments for the network, within reason, important transactions can go through as usual, while less pressing business will be processed later.
While the current transaction limit will likely be sufficient for several years’ worth of growth, a different solution will need to be discovered in order to reach VISA levels of thousands per second. The Dash Evolution team is slated to reveal the current status and future roadmap of the upcoming Evolution release within the coming week, and scaling is sure to be a hot topic.