The crypto bull run is well underway and Ethereum has been performing remarkably in the past few weeks. After reaching a new all-time high above $2500, the smart contract blockchain has solidified its #2 spot by market cap.
With Ethereum being recently added to Bitlevex, it’s will be interesting to see what is waiting around the corner for the smart contract blockchain.
To find out if Ethereum can remain the number 1 smart contract blockchain, we will analyze its main competitors and compare their functionalities to the leading platform.
But first, let’s have a quick overview of Ethereum and why it’s such a popular choice among developers.
What is Ethereum?
Ethereum was released in 2015 and is the top smart contract blockchain for decentralized applications. Currently, it uses a proof of work consensus mechanism, which has shown to be inefficient for mass-scale usage.
This has resulted in an oversaturated network and extremely high transaction fees, making the community doubt the blockchain’s long-term viability.
However, the developer community is working to migrate towards a proof of stake model that would allow for a faster and more cost-efficient model. Meanwhile, a good number of competitors have emerged which offer a functioning PoS smart contract blockchain. Below are some of the most notable alternatives to Ethereum.
Binance Smart Chain
The Binance Smart Chain is a recent addition to the blockchain space and is not to be confused with the original Binance chain. It was released in 2020 as a complementary smart contract solution to the original blockchain, boasting full compatibility with the Ethereum Virtual Machine.
The BSC functions on a Proof of Staked Authority (PoSA) consensus mechanism, which ensures fast and cheap transactions, something Ethereum is yet to reach. This blockchain added a staking mechanism for BNB, allowing holders to participate in the governance of the blockchain and gain passive income for their efforts.
Worth noting is that the BSC was released in a fully functioning state, ready to host dApps and smart contract protocols. Thanks to this feat, the popularity of the blockchain exploded overnight, and today almost a hundred projects are hosted on its network.
Cardano (ADA) is a smart contract blockchain that was released back in 2017, during the ICO boom. It’s a third-generation blockchain, meaning it offers smart contract functionalities on a proof-of-stake model.
The ADA native cryptocurrency can be sued for staking and passive income as well as participating in the governance of the blockchain.
Worth noting is that we can’t really compare Cardano’s performance with the Ethereum 2.0 update as both blockchains are still in a development phase. This hasn’t thwarted the growth of Carano, as the blockchain managed to enter the top 10 by market cap during the current bull run.
Polkadot is a sharded network that aims to provide interoperability and cross-communication between blockchains. It allows data to be transferred seamlessly between blockchains offering a universal platform for the Web 3.0 generation.
Where Ethereum allows for the creation of new tokens, Polkadot offers the functionality to create parachains – independent blockchains with their own tokens that can communicate freely within the ecosystem.
The DOT token is used for governance and functionalities on the network, such as bonding parachains to the Polkadot network.
It’s clear that in its current state, Ethereum will have a hard time surviving the competition. The competitors on our list propose faster and more elaborate solutions. Consequently the upcoming Etherum 2.0 upgrade will be a crucial step forward to conserve its spot as the #1 smart contract platform.