When the project was launched in August 2014 amid party and pomp, ether caused no small stir. It was tipped as Bitcoin’s surest competitor, the ultimate alticoin, the cryptocurrency of the smart economy. It was lauded as the future of smart self-executing contracts, a solution for applications that “run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference”. And that’s the reason many people threw their savings on ether’s Initial Coin Offerings (ICO), with the hope that it might be “the next bitcoin”.
Yet, Ethereum was riding on blockchain, a technology that had come to prominence courtesy of Bitcoin. Ether’s supposedly big (and only) innovation was that it was capable of supporting smart self-executing contacts; applications that rely on if-then scenarios to execute specific terms of an agreement. It’s now 3 years since it was launched and developers have only managed breaking their backs as they continue to work on newer ethereum versions. No major breakthrough project is running on ether, except a few completed projects that are sitting there for display with a handful of users. It’s now evident that ethereum is just another over-hyped altcoin, conceived and born with all limitations that are inherent to blockchain technology.
Limitations of Blockchain Technology
In case you think that Geo.Appsmith is just a hater of blockchain technology or ethereum you better read this post: Blockchain, The Future Hope which we posted months ago in which we were all praises about Satoshi’s mind blowing revolutionary technology.
We must, however, point out blockchain’s glaring limitations of scalability, transaction fees and offline transactions. As we are writing this post there is ongoing bitcoin block size debate, problems of scalability and unconfirmed transactions piling up every single minute. During its first years of existence, bitcoin was touted as having “near free” transaction fees. Today, the minimum transaction fee recommended while sending bitcoin continues to increase. About 4 years ago, content publishers often added a bitcoin address to their articles so that people who felt that this articles were deserving could tip them a small amount of bitcoin. If you want to tip us bitcoin today it will cost you $2 of transaction fee for a $1 tip.
You may think that’s a problem with bitcoin’s Prove of Work (PoW) until you learn that ethereum’s casper Prove of Stake (PoS) is only on paper, still under development like everything else ether. As bitcoin core contributor Luke Dashjr says, you can as well consider it ‘vaporware’. Going foward, ethereum enthusiasts still hope that newer versions of ether will be better in the future. Well, the only way to find out is to wait.
In the meantime, there is already a promise of a bright crypto-future in the name of IOTA. We have already written about this revolutionary crypto-currency on this earlier post: Exit Bitcoin. Enter IOTA.
How Different is IOTA
IOTA is different from anything that we have ever seen before. It is the first ever cryptocurrency without a blockchain. IOTA runs on a revolutionary network technology called the Tangle (Directed Acyclic Graphs), which is simply the solution to the architectural weaknesses of blockchain. It solves the major flaws of today’s cryptocurrency ecosystem i.e transaction costs, scalibility and offline transactions.
Unlike ethereum, IOTA was conceived out of the need to provide a truly fee-less platform to serve the machine economy. And true to its word, the Tangle is a real peer-to-peer network without any transaction fees. The zero transaction fee is achieved by eliminating “miners” from its network. In IOTA each network participant is active in the consensus and the validation of transactions.
Another remarkable feature of IOTA is it’s less rigorous design, which enables it to build clusters and even make transactions in an offline environment. This is the key feature that makes IOTA highly adoptable in the machine economy and Internet of Things (IoT), where devices use different networking protocols (e.g. ZigBee, Bluetooth LE, LPWAN, Lemonbeat, etc.)
Another astounding strength of IOTA Tangle is that it provides an architecture in which transactions can be validated in parallel. This wonderful architecture takes cryptocurrency to new heights. Instead of limiting transactions to sequential blocks that are added to the chain one-at-time, in IOTA thousands of transactions can be processed concurrently. And as the newtork grows, so does the transaction processing speed. Which means that IOTA is infinitely scalable!
Now compare this with ethereum, which is not only getting slower but also energy intensive. According to the Motherboard, the entire ethereum network is already consuming more power than a small country worth of electricity.