Are Ethereum’s shortcomings a real problem?
Ethereum is undoubtedly a global phenomenon.
Nowadays, it can be said that there are two major technologies that count in the cryptocurrency market. These are Bitcoin and Ethereum.
In the case of the first technology, it is the prototype of cryptocurrencies, which is why users consider it to be the best.
However, its biggest rival, Ethereum, is not indebted to it. Despite the fact that many people point out its alleged weaknesses, the cryptocurrency holds up well.
In that case, does this cryptocurrency have any drawbacks?
Lack of privacy?
Many people believe that one of the biggest problems with this cryptocurrency is its wide openness. Undoubtedly, one can agree with this statement in relation to the public Ethereum network. Here, all transactions are public and anyone is able to verify them.
This makes many people consider it unsafe for companies and corporations due to the excessive openness of the data. Some transactions should not be visible to all users as they can become very sensitive data.
However, there is a way out of this situation. There are companies that offer special cryptographic solutions for corporations. If a given company is interested in implementing cryptocurrencies, it can function on the principle of a private Ethereum network.
In this way, the problem of the disclosure of sensitive data can be solved.
The problem with scalability
This is one of the most frequently raised arguments against the Ethereum network. We are talking about the transaction throughput, which is between 8 and 15 per second. This is not much, as Visa transactions reaching 1,700 per second can be used as an example.
The gap between the two technologies is currently very large. The low scalability of the Ethereum network means that mining software may, after a while, no longer be efficient enough to connect more blocks.
Because of this, mining the cryptocurrency may become less profitable over time than it was before. This is a problem that the cryptocurrency’s creator is aware of, and it is a problem that should be solved with the arrival of the next iteration of the network, Ethereum 2.0.
Is Ethereum mining expensive?
This is the third most common argument that is often used by sceptics of the technology. A certain defined amount of internal currency (Ether) is needed to resolve a transaction.
In the slang of the users, it has the name gas(oline), because it is accepted that this process is similar to driving a car. A certain amount of Ether is needed to reach the goal, which is the resolution of the transaction.
This is why it is often compared to driving a car because in order to get to your destination you first need to fill up with gas. In this way, mining os users can be rewarded with cryptocurrency.
Once again, it is worth mentioning the special solutions for businesses and the possibility of creating private networks, which can solve the problem of cryptocurrency consumption.
In conclusion, Ethereum is undoubtedly a global phenomenon. How the network functions and how transactions take place is one of the best processes that man has been able to invent.
Of course, the shortcomings that have been described above still exist. There are many indications that with the arrival of the second version of the network they should be solved. Time will tell what the biggest rival of the Bitcoin network is capable of.
In any case, in terms of impact on human development, the race between the two largest cryptocurrency technologies may well turn out to result in a technology that will have a very positive impact on the fate of humanity.
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