“We Chose Stellar Because it is 100k Times More Cost-Efficient than Ethereum” – Connecty CEO

“We Chose Stellar Because it is 100k Times More Cost-Efficient than Ethereum” – Connecty CEO

“To run 100,000 transactions on the Stellar network, we discovered that we can expect to pay 1 XLM on average. At current XLM prices, that equates to just over $0.20 which itself equates to the cost of one single transaction on the Ethereum blockchain – when its network is not congested! There was no hesitation, therefore, in which choice of blockchain technology we were going to opt for.”

Those are the words of Olivier Alirol, CEO of Connecty, explaining to ICOExaminer the reasons for which the Connecty project – a comparatively rare French ICO – has chosen Stellar technology as the basis for its eventual platform.

Setting out to become the world’s first globalised knowledge marketplace, the team’s technical leads have pointed out that their choice, however, was not purely economic. 

“Handing Power to the Payee”

Alirol cited several further features of the Stellar platform which helped tilt the balance in its team’s choice of platform: threshold signatures, path payments, and the Stellar compliance protocol.

Threshold signatures categorise transaction signatures according to types, each of which carries an allotted weight. The idea is that no transaction can be actioned unless the weights involved in the submission of that transaction to the network sum to a given figure. And by assigning a specific, non-replicable weight to the signatures of payees themselves, Stellar thus allows for a transaction mechanism which grants the receiver of funds the ability to accept or reject those funds. 

“It was important for us to implement a PayPal-type facility in which payees themselves can approve or reject the transaction. Stellar was the only platform amongst the options we studied which offers this capability,” explains Alirol.

In recent weeks, Stellar has emerged as arguably the leading contender for general mass adoption amongst the long list of public blockchain payment technologies competing in the field. In mid July, Coinbase announced that it had shortlisted Stellar as a candidate for integration as a base trading pair on what is the United States’ leading crypto trading platform. 

Over the course of the same week, the Central Bank of Bahrain granted a formal Sharia Compliance certificate to Stellar’s underlying XLM currency – the first cryptocurrency to receive such recognition in a move that potentially opens up the technology to a $1 trillion asset market. 

The Connecty project has become the latest in a long line of ICO projects to plump in favour of Stellar technology. Whether, however, this will ultimately translate into good news for HODL’ers of XLM is another question.

The almost negligible price of transactions effected through XLM appears to imply – according to one eToro cryptocurrency analyst – a velocity of money metric which, in turn, may suggest difficulties in XLM emerging as a store of value. 

“Because the transaction fees are so incredibly low and the total supply of coins is so incredibly high, the velocity of the tokens is virtually insignificant, there is very little economic case for the tokens to rise in value in the near future,” eToro analyst Mati Greenspan notes. 

There is however significant upside potential … if the total crypto market capitalization were to rise to $10 trillion .. and Stellar maintained its share of the market, one XLM would be worth $8.55,” his report concludes.