Storj leaving Counterparty for Ethereum highlights problems with Bitcoin as a platform

This week Storj, the distributed cloud storage project, announced that they will migrate their token to Ethereum. The Storj token (SJCX) was issued on the Counterparty platform in 2014. Problems caused by Bitcoin's recent troubles were prominent among the reasons cited, but the lack of development progress and small ecosystem were also mentioned. This must come as a blow to Counterparty, who issued a statement a few days later outlining their plans for innovating the platform.

Storj is the largest Counterparty token with a market capitalization of 10.5M USD and was the only Counterparty asset in the top ten largest blockchain assets by market cap according to CoinMarketCap.com. With the addition of Storj, the Ethereum platform will host 7 of the top 10 such assets.

The remaining Counterparty assets with a market capitalization greater than 1M USD are BitCrystals (BCY), the token powering the in-game economy for the forthcoming mobile game Spells of Genesis and the Rare Pepe fad tokens. These projects use Counterparty tokens to represent ownable and tradable assets, such as digital collectible cards. The Bitcoin scaling issues are affecting the Spells of Genesis user experience as well and this will only become more apparent when the game is properly released later this year. As a Spells of Genesis beta tester, this author personally experienced transaction wait times of over a week for blockchain in-game card transfers. This is not the sort of user experience that will be tolerated by the average gaming public.

This move is critical for Storj to keep pace with similar ventures such as Maid Safe and IPFS, but Counterparty's efforts might be too little, too late to compete with the powerhouse that is Ethereum.