An Alternative to the Alternative: 5 Ethereum Competitors
Perhaps, no other cryptocurrency has performed better than Ethereum this year. Sure, Bitcoin is doing fine and soaring to new heights, however, due credit must be given to the disruptive effect of the Ethereum blockchain for the digital industry. The value of ETH has increased by 8,500% this year, propelling Ethereum’s market cap to $66 billion.
Ethereum blockchain is the reason behind the rise of ICO in 2017. The vast majority of ICO tokens are compatible with the Ethereum ERC20 standard. However, in the last week of November, the Ethereum network encountered operational problems that caused doubts about their long-term effects. The culprit was a seemingly innocent game of breeding and selling digital kittens, CryptoKitties. This game caused the number of unprocessed transactions on the blockchain to skyrocket about 600% within a single week and revealed deep-set scalability issues with the network. Several startups postponed their ICOs due to the clogging of the Ethereum blockchain, and Kik, an online messenger, moved its tokens from Ethereum to Stellar.
By mid-December, the developers seem to have fixed the scaling issues. The cryptocurrency is currently traded at $795, however, it is a good opportunity for us to look at up-and-coming blockchains and cryptocurrencies that offer some of the similar features and may potentially take Ethereum’s place.
Launched in 2015, Cardano has been marketed as “Japanese Ethereum”. It is a blockchain with smart contracts written entirely in Haskell code, which is claimed to be resilient enough for mission-critical implementations. A highlight of the blockchain is its scientifically researched Ouroboros Proof-of-Stake (PoS) algorithm, that is claimed to be more stable to vulnerabilities. The developers claim that the Cardano network is more flexible, faster and scalable than Ethereum, and all changes are introduced via soft forks.
The fact that the network has not experienced heavy loads yet may cast doubts upon these claims. The rapid growth of the ADA cryptocurrency may also be based on nothing but people perceiving it as yet another pump-and-dump altcoin. However, the theory behind this blockchain looks very promising.
IOTA presents a new generation distributed ledger protocol (Tangle) that is designed to support transactions between machines and devices on the Internet of Things. It solves three problems that plague the Ethereum network now: scalability, transaction costs (it is feeless) and offline transactions.
Scalability is an inbuilt feature of IOTA, as its throughput grows the more activity is within the network. Another feature is that the IOTA nodes do not have to be online over the whole process of a transaction.
Some of the experts believe that IOTA is best used when it is not competing with other blockchains but in conjunction with it. This cryptocurrency has recently received support from Bosch Group, while a Microsoft representative indicated interest in their technology.
NEO is essentially a smart contract blockchain that supports decentralized applications (DApps). It is often referred to as the “Ethereum of China”. It had an impressive rise in late 2016, and now sits firmly in Top 15 cryptocurrencies by market cap.
NEO smart contracts are very similar to Ethereum’s, in that they, too, allow users to register, trade and circulate assets via a validated use scenario. However, NEO supports a variety of languages such as C#, VB.Net, F#, Java, and Kotlin, whereas developers have to learn Solidity, a native Ethereum code, before they can launch applications on the network.
Stellar has been around since 2015, founded by the creators of eDonkey2000 and Ripple, and has made waves ever since. Its premise is similar to Ripple: as an infrastructure for payments, it was designed from the start to simplify issue of tokens backed by fiat for financial institutions. Stellar also has an inbuilt distributed exchange where users can not only buy and sell currencies, but also convert from one currency to another.
Stellar may become the real contender for Ethereum in the ICO domain. Its major advantages over Ethereum are liquidity (thanks to the distributed exchange), high transaction speed and low commissions (5 seconds on Stellar vs 3,5 minutes on Ethereum), and security. Ethereum has a Turing-complete programming language, which means that you can write a smart contract of any flexibility using it but you can also write exploitable code. However, the majority of ICOs don’t need Turing-complete smart contracts, that is why a simpler but more resilient platform like Stellar may work better for them.
Qtum emerged in 2016 and was seen as a potential disruptor that could bridge the gap between Bitcoin and Ethereum ecosystems. Qtum is a hybrid blockchain platform that allows businesses to build DApps for mobile devices while being fully compatible with other blockchain ecosystems. In essence, it is a Bitcoin fork with an Ethereum-like virtual machine built over it. Qtum is compatible with ERC20 standard, which means it can host ICOs. Meanwhile, Qtum’s blockchain has improvements over Bitcoin. It supports SegWit and has a built-in system leveraging smart contracts called the Decentralized Governance Protocol (DGP). It allows users to modify blockchain parameters quickly and seamlessly without disrupting the ecosystem. For example, when a network is upgraded via DGP, the node operators won’t have to take any actions, and Qtum users won’t have to download new software.
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