While Blockchain led to an economic revolution in the year 2008 when Satoshi Nakamoto released the world’s first decentralized ledger, it was the Ethereum project launched in the year 2015 which the entrepreneurship and startup sector.
The project which raised approximately 3700 BTC in the first 12 hours of its ICO launch was then adopted as a protocol on which other major startups such as TRON, BAT etc. were built.
After all, automated smart contracts, better transaction times, flexibility and versatility, what more could the users ask for?
However, the tremendous growth and adoption of this Blockchain which currently has around 35 million unique users, brought to light a number of issues which were previously unknown.
While some of these issues may directly affect your business, a few others have an indirect effect. Whatever the case be, you as a business owner should be aware of the possible disadvantages Ethereum Blockchain faces, which make it a bad choice for your business.
Smart Contracts Written in Solidity Are Vulnerable to Attacks
While developers are increasingly learning and understanding about this language, it still stands as one of the newest entrants into the programming realm and has its flaws. This has led to the generation of unknown loopholes and backdoor entries into the code which cost projects an upwards of $1 billion, according to a report by CNBC.
It faces serious scalability issues
During its early years with only a few people being a part of its ecosystem, Ethereum was viable and probably the best option to go for.
However, the explosive growth it has seen in years has slowed this Blockchain down and the network even clogged back in the year 2017.
While the company continues to explore methods such as sharding, and integrations with applications such as Raiden, the issue of scalability may affect a project’s growth. It is because the Ethereum network will start to clog after a while.
Gas Prices Are Unpredictable
Gas prices are typically service fees you pay in order for Ethereum Blockchain to process your transaction.
Now, as the network gets busy and there are multiple transactions for the Blockchain to process, these costs tend to rise.
A small fluctuation in price is something which most business users and owners can handle. The fluctuation shown below gives an insight into how volatile the Gas prices can be.
This problem can be contained and solved if the transaction speed of Ethereum can be increased, however, till date the process of optimizing and improving the performance is still in process.
During network clog, as mentioned above, the gas prices had already risen by 7000% and can rise even more with the increase in adoption and utility.
With the growing number of users, Ethereum is already seeing a fall concerning its speed and transaction settlement time. It is not wise to choose Ethereum and only do what most businesses are doing.
While there were not many options back in 2014, there are strong competitors to Ethereum in present times such as Lisk, Cardano, Neo etc. To know about Blockchain better than Ethereum click here: ‘6 Blockchains better than Ethereum’.
As a business owner, choose what best suits your business while making sure that the very foundation of your business is not susceptible to vulnerabilities.