Disadvantages

While Stellar is good in terms of what it offers, it comes with a few disadvantages:

  1. Limited opcode set: Stellar's list of possible operations is extremely limited, possessing only those operations that are relevant in a payment/funds transfer setting. This makes development of verifiable contracts harder.

  2. Questionable Security and Decentralisation: Stellar's mainnet and testnet have been down for multiple hours in the past, and Stellar's quorum based consensus algorithm has a side effect of nodes trusting the Stellar Development Foundation's nodes (they are enabled by default and most users use the default configuration). This increases dependency on the Stellar Development Foundation to not act maliciously, reducing security and decentralisation.

  3. Small Number of Full Nodes: The number of full nodes on the Stellar blockchain is limited (~140), making it easier for entities to collude and censor transactions.

  4. Absence of verifiable on chain computation: Stellar does not possess an on chain smart contract validation / transaction execution validation mechanism.

  5. Limited ecosystem resources and lack of exchange liquidity: Though Stellar was started in 2014, it has failed to gain traction in terms of Stablecoin adoption, Merchant adoption, and widespread adoption. The liquidity in popular markets for Stellar-native stablecoins is low, making large scale investments in projects (> $10000) difficult.

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