Ted Cruz (R-TX) – a crypto-supportive Republican senator – believes a US Central Bank Digital Currency (CBDC) is likely to become a reality. The politician believes both the Federal Reserve and the White House currently want one, and that the Democratic party won’t vote against its issuance. In an interview published by What Bitcoin Did on Friday, Cruz discussed the current political climate surrounding crypto. In general, the senator believes Democrats are more opposed to the industry than Republicans, due…
Cryptocurrencies have grown both in adoption and popularity over the past two years. Even companies are onboard, with experts saying that it is the first step towards cryptos going mainstream. Bitcoin is in the lead with the highest market capitalization. Coming in second is Ethereum, leading the battle of the altcoins.
Ethereum gained and is still gaining popularity because it was the first crypto after Bitcoin to bring more usability. Its usability extends from just a means of payment to smart contracts. Due to this, it has managed to maintain its position just below Bitcoin since its launch. In the article, we shall look into what Ethereum is all about and why some projects could overtake the crypto;
A Look At Ethereum
Ethereum, as mentioned, is the second-largest crypto by market capitalization totaling over $240 billion. In just the past 12 months, it has generated a 650% return. However, Ethereum has a long rough road ahead to achieve a ‘decentralized computer.’
Ethereum is not without its issues. Other projects have criticized its high energy requirements, scalability, high transaction costs, and relatively slow transaction speed. The growing popularity of decentralized finance (DeFi) and non-fungible tokens (NFTs) brings massive competition to Ethereum. Offering better utility and reduced comebacks, Ethereum might just be thrown out of the market in the future.
On the other hand, several analysts believe that crypto has the most attractive bull case in the crypto space. The reason being, there are many catalysts for growth outlined for the future. Its biggest so far is the transfer of proof-of-work to proof-of-stake, the Ethereum 2.0 project. With that in mind, let us look into the altcoins and possible competitors of Ethereum today.
Can Cardano Outperform Ethereum?
Cardano is one of the most popular altcoins in the crypto space. Over the last 12 months, it has grown 840%. It was developed in 2017 by Charles Hoskinson. It aimed at being more energy-efficient than Ethereum, hence a suitable alternative.
Cardano is at the top of the list for several reasons. First, it operates on a proof of stake system. With a PoS system, users carry out transaction validations with an equity stake on the platform. Hence, energy saving when compared to Ethereum’s Proof-of-Work that requires a lot of electricity. In addition, it can handle up to 257 transactions in a second with a million target in the future.
Recently, Cardano received the much-awaited Alonzo hard fork upgrade. The upgrade is bringing in smart contracts to the network. Users can now create and deploy smart contracts to create dApps, blockchain games, and even NFTs. With more expected to come on the network, it stands to gain massively by the end of 2021.
Cardano’s program is in Haskell. The language is best suited for data analysis and business setups. Consequently, it gears future applications to financial or organizational. Through the usability and privacy protection measures, Cardano becomes a groundbreaking solution.
The project is still in its infancy, and a lot more growth is coming. However, achieving this has been slow because of the complex scientific methodology used to eliminate faults.
How About Solana?
This month, the Solana network’s cryptocurrency took the seventh spot in the top ten cryptos. SOL has grown about 12 times its initial price in a year, and its market value is at more than $48 billion. At the moment, it is one of the fastest-growing altcoins.
Its enthusiasts have termed Solana as an Ethereum competitor, and it just might be. It has a growing ecosystem whereby projects are built. Solana also accommodates an incredible 65,000 transactions a second. No one, including Visa, has come near this.
Currently, a transaction on the network costs between $0.00025 and $0.0001. Compare this with a 3 percent transaction cost of Visa, Bitcoin, or Ethereum for $10-$65. Charges for Ethereum should be so low that the problems about scalability are solved but are relatively high at this moment.
Many investors believe that Solana is a significant candidate to dominate this space due to its design and name. Sam Bankman-Fried (SBF) is one of the names himself. The SBF approval stamp is a significant thing in the crypto industry, and it is hailed by many as the world’s leading crypto-investor.
Maybe Polkadot is the Real deal among Altcoins
Nicknamed the “platform of platforms,” and by others, developers designed the “Ethereum killer,” Polkadot to be just that. Both Polkadot and Ethereum attempt to allow the development of decentralization applications on respective ecosystems.
Ethereum uses its ‘smart contracts’ to achieve this functionality. Developers can construct and test their ecosystem applications. On the other hand, Polkadot allows this by creating applications that connect via a relay chain with other ledgers. It is this functionality that makes Polkadot more attractive.
We can add improved scalability to this as well. The white paper of Polkadot mentions scalability as a shortcoming in the technological stacks currently available. A problem to be deployed on Polkadot — scaled-out — can be substantially simulated over many parachain systems. As a distinct section of the Polkadot network may perform all components of each parachain simultaneously, the system hence scales.
In other words, the parachains of Polkadot run and produce parallel blocks (hence the name). This feature enables a fast and smooth running of the network.
Although Polkadot is more recent, prominent developers like Advanca and Airgap have hopped on.
Last But Not Least, Binance Smart Chain
An additional project in the smart contract sector is the Binance Smart Chain (BSC). It is a blockchain built by the prominent digital asset exchange, Binance, in 2019.
The BSC Network facilitates the development of high-performance dApps and other smart contract-based applications. It is compatible with the native Binance Chain. BSC combines the Binance Chain’s high transaction performance with Binance Smart Chain’s smart contract features.
BSC seeks to assist traders and investors in managing their digital assets with low latency and cheaper costs. At the same time, it gives a rich toolset for dApp development — basically resolving 2 of Ethereum’s significant critiques.
Binance provides faster and cheaper transactions for Binance Smart Chain versus Ethereum. The network has an average 3.0 second block time and a 39.2 TPS performance. Due to this, it is three times faster than Ethereum. All these built-in features make it a viable Ethereum competitor that could even overtake it.
Conclusion – Battle of the Altcoins
Ethereum has become the basis of decentralized finance, despite its critique. Not surprisingly, the network has created about 79.23% of all dApps.
Its shortcomings have not gone unnoticed. Therefore, various initiatives have subsequently created blockchains and put them up as “Ethereum killers.” Their developers designed them to increase DeFi and smart contracts’ market share. At the same time, they tackle Ethereum issues such as scalability and transaction costs.
In the future, they may end up, not as its killers but as coexisting blockchains. The DeFi industry is growing at a high rate every year (88x). Hence, there is room for all projects to contribute to the future of Web3 together. The future of DeFi is also likely to develop on multiple high-performing networks rather than one single entity, a measure of true decentralization.