Despite being considered a futuristic and efficient payment system, Ethereum is still unable to replace the traditional system. Whenever any system is made public, it should be affordable, familiar, and easily accessible to everyone. Ethereum is popular but affordable and efficiency is a major issue.
Let’s understand with an example!
The Ethereum payment system can make 7 transactions per second, while the traditional payment system can make 1700 transactions per second. Anyone can see the difference. Looking at the current Ethereum payment infrastructure, it’s clear it requires a lot of improvements to meet the day-to-day demands.
Apart from this, there are several other issues as well. Let’s explore these issues!
Ethereum is still a new technology with endless opportunities as well as drawbacks. Theoretically, Ethereum is a decentralized and secure solution for making digital payments. But there are several drawbacks as well. Here are some of them:
Ethereum’s popularity is increasing day by day; therefore, the number of transactions is also increasing. Here, the issue with Ethereum is that the number of transactions is increasing but the capability of Ethereum to store and share data is still the same.
Several factors like cost, capacity, networking, block size, and transaction fees are some of the limiting factors in Ethereum’s scalability. The point here is that even if Ethereum is widely accepted as a payment, it can be used for large-scale transactions. It lacks both in terms of efficiency and feasibility.
Whenever Ethereum or any crypto transaction comes into play, the first and foremost concern is gas fees or transaction costs. To verify any transaction requires a definite amount of gas, which adds additional charges while making transactions.
In simple terms, Ethereum transactions cost more than usual transactions. Switching traditional payment systems to Ethereum will massively impact common people. Moreover, as popularity increases, users are willing to pay higher prices for transactions. This is making crypto transactions more competitive.
Ethereum payment systems are theoretically impossible to hack. It requires verification from every node. Even if someone tries to hack the system, it requires modification at every node. This is considered the next-to-impossible task.
However, at the same time, blockchain is a nascent technology and there are endless possibilities. The system is vulnerable and can be attacked. It is too early to switch to an Ethereum-based payment system.
Ethereum-based payment systems are new to most people. That’s not the only issue. The entire blockchain and Ethereum industry is new and there are endless possibilities as well. Scalability and security issues are major concerns in the adoption of Ethereum as a payment system.