A full half of the networks of the top six cryptocurrencies are experiencing extremely overloaded transactions.
Bitcoin has experienced an impressive bull run recently, rising from just under $10,000 to nearly $17,000 over the course of a week. This has put the market cap over $250 billion, with a combined cryptocurrency market cap of over $414 billion. This influx of new investors, however, has significantly delayed transactions, creating a backlog of over 170,000 unconfirmed transactions. This sudden spike has caused disruptions in the accuracy of data to Blockchain.info:
— Bruce Kleinman (@Pressed250) December 7, 2017
Ethereum’s network is congested by Crypto Kitties, IOTA’s by deliberate spam attacks
Meanwhile, the second most valuable network, Ethereum, has also encountered severe disruptions due to traffic. However, instead of new investors discovering the project or escaping from a failing currency, this traffic jam has a more whimsical cause: digital cats. CryptoKitties, an Ethereum app, has become wildly popular, and their use and trading has brought the network to a crawl:
There are a lot of "stuck"#CryptoKitties so, spent the last 4 hours building/running a #CryptoKitties miner.
tl;dr the #Ethereum API is crap, the docs are terrible, and the network is crawling. But hey, I just profited .5 ETH mining adorable cats! 🐱 @CryptoKitties #Crypto pic.twitter.com/ymSYCQsCRj
— Boris Kozak (@boriskozak) December 6, 2017
Finally, IOTA, a newcomer to the top rankings, has fallen victim to spam transactions. IOTA leverages a system called a tangle rather than a blockchain, in which transactions, rather than costing a fee to miners, are free so long as the broadcasting node also confirms two additional transactions. However, due in part to a limited amount of nodes currently, an attacker was able to spam the network with a flurry of transactions containing the taunting message “Coordinator Sucks.” As Reddit user Moschatus explained, the spammer was able to effectively hold the network hostage:
Dash’s long-term scaling plan aims to prevent similar congestion
The “survivors” from the massive network load that has affected the top six coins so far have been Dash, Bitcoin Cash, and Ripple. Bitcoin Cash is nearly identical to Bitcoin, except that it has eight times the block size, meaning a theoretical network capacity many times larger. If the transaction capacity ever grows to a similar size as Bitcoin, Bitcoin Cash can in theory simply raise the block size again, something that the community at present seems to favor. Ripple, rather than a general public use blockchain, focuses more on transfers between financial institutions (much like an updated version of the SWIFT banking network), and as such hasn’t been exposed to the same rushes of unexpected usage.
Dash has a similar capacity to that of Bitcoin Cash, with 2mb blocks with a block interval four times as fast, meaning that it too could field several times Bitcoin’s transaction load at present. In addition, however, Dash’s InstantSend functionality allows transactions to be confirmed instantly even during times of high congestion, and incentivized nodes mean that the network can continue to grow without running into either a node deficit or centralization issues. Finally, Dash has a long-term roadmap to scale to 400mb blocks and beyond, including specialized open-source hardware specifically designed for the network to handle high transaction volumes, similar to those of the present-day VISA network.