StellarX Co-Founder Details Why ICOs Shouldn't Be Held on Ethereum in New Research Paper

A StellarX co-founder has released a new research project that describes why ICOs shouldn't be held on the Ethereum network.

While we finish up StellarX, we wanted to share a research project on Ethereum we did earlier in the year.

According to the report, all of the data was collected by the co-creator and his team, which spent $13,000 running an "At-scale" app for 10 hours on the Ethereum network.

If a company desires to issue a token, let users trade and experience transactions in real-time, the StellarX team presumes that Ethereum is the wrong choice.

The first problem the StellarX team discovered was Ethereum's method of queuing transactions, which was considered miserable for enthusiastic users.

Christian goes on to explain the intricacies of Ethereum's queuing process, overall comparing it to the "Please take a number" system users experience at places like the DMV. Unlike people working at the DMV miners running the Ethereum network aren't accountable for the next "Number" in line.

Cost is another issue that Ethereum faces, according to StellarX. The Ethereum app's per-user costs, for example, go up extremely quickly when it adds more accounts-seeing a 7,000 percent price spike, in some cases, when multiple users try to use the network across a number of accounts.

One StellarX experiment, which cost $1,445 for a single hour when Ethereum's gas prices were low, saw the team run several basic tests that completed 8 transactions per second.

Had the latter been true, StellarX concludes that 21 percent of the company's net income in 2017, $380 million, would have gone to Ethereum network feeds.

While more than 50 percent of ICO projects launched on the Ethereum network have completely disappeared after their token sales, it's no surprise that the StellarX co-founder recommends Stellar's network as the solution.