A research paper has found that the majority of transactions on three major blockchain platforms are valueless. In many cases, they are largely used for spam or for airdropping worthless tokens.
The paper’s abstract states: “Our analysis reveals that only a small fraction of the transactions are used for value transfer purposes. In particular, 95% of the transactions on EOS were triggered by the airdrop of a currently valueless token; on Tezos, 82% of throughput was used for maintaining consensus; and only 2% of transactions on the XRP ledger lead to value transfers.”
The authors of the paper—Imperial College London PhD student Daniel Perez, University College London researcher Jiahua Xu and Brave chief scientist Benjamin Livshits—tracked different transaction types on the above blockchains, noting their purpose and value. The authors conclude that while the above chains process a lot of throughput, the majority of it may be essentially useless.
“With EOS and XRP, the majority of the transactions exhibit characteristics resembling DoS attacks,” reads the paper. DoS, or denial-of-service attacks, are cyberattacks where large numbers of computers are used to put strain on a website, or other service, to take it offline.
Regarding XRP, the paper states, “the throughput on the XRP ledger during our observation period appeared to be fraught with zero-value transactions,” adding, “We learned that both transaction volume and token value on the XRP ledger are highly manipulable.”
As Decrypt has reported, XRP transactions are also used to trick exchanges. XRP is unique in that it can show transactions that have been paid in part, unlike other blockchains where you either have a transaction or you don’t. This means there are two different “amount received” parameters and if the exchange uses the wrong one, they might credit a trader’s account with far more XRP than they sent to the exchange.
Tezos (XTZ) transactions are closely analyzed in the paper, which concludes that the blockchain’s voting process is the source of most of its transaction volume. The paper states:
“For Tezos, since transactions per block are largely outnumbered by mandatory endorsements, most of the throughput, 82%, is occupied for maintaining consensus.”
Tezos is a proof-of-stake blockchain platform, where people who hold the Tezos coin can help keep the network running and vote on how it should be changed over time. So, while transactions may have no value, they might still be performing a useful function.
It’s worth noting that the paper was contributed to by Benjamin Livshits—chief scientist at Brave Software. The Brave Browser’s native cryptocurrency, Basic Attention Token (BAT), is built on Ethereum—which rivals other cryptocurrencies, particularly EOS.
The authors conclude that the above blockchains have the capacity and capability to handle high levels of throughput. But, they say, their current usage doesn’t live up to their potential.
“The bottom line is: the three blockchains studied in this paper demonstrate capacity to carry out high throughput; however, the massive potential of those blockchains has thus far not been fully realized for their intended purposes,” ends the paper.
What’s the point of being able to run millions of transactions per second, if the demand simply isn’t there?
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