Atlanta-based Storj Labs Inc., developers of the blockchain-based cloud storage network Storj, announced today it will be switching its digital currency (SJCX) over to the Ethereum token framework.
Since launching, Storj Labs has used the Counterparty smart token platform, which runs on top of the Bitcoin blockchain.
But rising Bitcoin transaction fees and delays, coupled with the lack of development and updates of the Counterparty platform, have prompted the Storj development team to migrate to the more popular Ethereum ecosystem, which Storj Labs CEO Sean Wilkinson called a “more active and robust development community.”
In his blog post, Wilkinson explained that the rising transaction fees of the Bitcoin network have created an untenable situation for Storj cloud storage providers:
“For the February farmer payout we paid over $1,600 in transaction fees, or about 13% of total payouts. This is not sustainable or scalable.”Storj Labs partnered with Counterparty last year to work on ultra-fast micropayments for SJCX, which would have been based on the upcoming Lightning Network being developed by Bitcoin Core developers.
However, Storj developers now believe that this path is “unlikely to be broadly useful” as the Counterparty platform has very little adoption, “The Counterparty ecosystem is small. Very few other organizations are using it at scale.,” said Wilkinson.
As a result of the mounting issues with the Counterparty platform, along with many requests from within the Storj community itself, the Storj Labs team made the decision to migrate its token to the Ethereum ERC20 token standard.
Ethereum’s token platform already supports the tokens of major projects like decentralized computing platform Golem (GNT), as well as REP, the token of the decentralized prediction market Augur.
Wilkinson said a roadmap will be laid out for the migration process, and existing SJCX holders will be allowed to swap their Counterparty-based tokens to Ethereum-based SJCX.
The news lifted the SJCX/BTC exchange rate to a 4-month high of 0.000238. At press time, one SJXC token costs about 0.000206 BTC: