Ethereum
4 Blockchain Competitors Competing With Ethereum
The advent of Ethereum has created a new paradigm in the still young blockchain industry and shifted its focus from cryptocurrencies as financial tools to a more utilitarian purpose. With smart contracts on Ethereum and similar blockchains, processes that involve some data transaction can achieve autonomy while remaining irrefutable and transparent. Startups and mature enterprises alike have developed ways to use smart contracts to create low-overhead workflows, and creatives are also using them in their innovations.
A recent project on the Ethereum platform called The Crypto Kittens The cat has been getting a lot of buzz in the community for a number of reasons. The idea behind Crypto Kitties is that people can use Ethereum to trade and breed virtual pet cats via a smart contract, resulting in interesting and rare “cattributes.” The rarer a cat’s trait, the more valuable it is in ETH.
Despite the novelty of the idea, or perhaps because of it, this simple game has enjoyed meteoric popularity. It has managed to temporarily take more than 13% of traffic on the Ethereum blockchain via the Crypto Kitties smart contract. The event slowed Ethereum down considerably and exposed some of the daunting problems facing its scaling efforts. (See more: CryptoKitties Still Exist. Here’s Why.)
Ethereum’s Achilles Heel
Ethereum has a long way to go if it wants to achieve its ambition of becoming the world’s “decentralized computer.” Even Vitalik Buterin, Ethereum’s creator, doubts its current ability to scale, saying that “scalability [currently] “This sucks; blockchain design is fundamentally based on bottlenecks where individual nodes have to process every transaction across the entire network.”
He’s right. The Ethereum blockchain is constantly growing and is placing an ever-increasing footprint on miners’ and users’ hardware. Additionally, its relatively outdated algorithmic programming makes inefficient use of the chain’s processing power and returns a dismal number of transactions per second. This is a problem for businesses that rely on Ethereum smart contracts and impacts its future applicability and pricing. Fortunately, there are other smart contract platforms built on the blockchain that are working to further evolve the concept.
1. QTUM
One of the most promising contenders for the Ethereum title is QTUMa hybrid cryptocurrency technology that takes the best attributes of Bitcoin and Ethereum and combines them. The result is a solution that resembles Bitcoin’s core, but also includes an abstract accounting layer that gives QTUM’s blockchain smart contract functionality a more robust x86 virtual machine.
It’s essentially a layer-off scaling solution similar to what Bitcoin is looking for in SegWit and the Lightning Network, combined with the ability to create and host smart contracts. This has made QTUM a popular destination for developers, who appreciate the protective clauses built into the platform that make it nearly impossible to commit the kind of coding violations that could one day become a multi-million dollar problem. They also appreciate the presence of layer-two storage, despite its implications for decentralization, because stable commercial applications are their primary desire, and they should be.
2. Ethereum Classic
The first hard fork that the cryptocurrency community witnessed was the Ethereum fork from Ethereum Classic in 2013, who created a new prototype with the ambition of filling gaps in Ethereum’s code. Controversy surrounded a hack where an individual stole over $50 million in ETH from a smart contract that held it in escrow as part of the original Decentralized Autonomous Organization (DAO) project.
After the hacker created a glitch that removed users’ ETH instead of depositing it, the community voted to create a new chain that would be backwards compatible with the old one, so that mistakes like these could be reversed and the coins returned to their rightful owners. hard fork has installed a new update to the old Ethereum code that makes it impossible to roll back, even in the event of heinous violations, of which there have been several. Ethereum Classic is continually updated in this way, thanks to a vibrant and active community, and remains in step with other projects despite its age.
3. NEO
NEO is what people like to call “Chinese Ethereum”, and for good reason. First of all, the two are very similar and present themselves as hosts of decentralized applications (dApps), ICOs, and smart contracts. They are both open source, but while Ethereum is backed by a democratic foundation of developers, NEO has the full support of the Chinese government. This has made it popular both domestically and abroad, and also for its unique value proposition.
NEO uses a more energy-efficient consensus mechanism called dBFT (decentralized Byzantium Fault Tolerant) instead of proof-of-work, making it much faster at a rate of 10,000 transactions per second. Additionally, it supports more computer languages than Ethereum. People can build dApps with Java, C#, and soon Python and Go, making this option accessible to startups with big ideas while also contributing to its long-term viability.
4. Cardano
One of the latest entries in the smart contract platform competition, Cardan is a dual-layer solution, but with a unique twist. The platform has a unit of account and a control layer that governs the use of smart contracts, recognizes identity, and maintains a degree of separation from the currency it supports.
Cardano is programmed in Haskell, a language particularly suited to commercial applications and data analysis, so its future applications will likely be financial or organizational. This ideal blend of public-sector friendliness and privacy protection makes Cardano a potentially revolutionary solution, but it is still very early. While the developer team’s use of a deliberate and hermetic scientific methodology will slow progress, it will likely be free of any parity or security errors that are an unfortunate reality among its more random peers.
The essential
Despite its problems, Ethereum remains the gold standard for smart contracts and blockchain-based applications. These new challengers all have compelling value propositions, but they also need to prove they can attract a large enough user base to drive widespread adoption and success.