Ethereum (ETH) is the clear leader of today’s blockchain platforms and the foundations for countless other crypto projects.
Many smaller decentralized platforms use the Ethereum platform for the execution of decentralized smart contracts. Ethereum’s goal is to become the global platform for these applications. That goal is certainly plausible as Ethereum accounts for nearly 20% of the total crypto market capitalization.
However, newer platforms are gaining users at a faster pace now as low transaction speeds and high gas fees drive crypto enthusiasts elsewhere. Unless Ethereum reduces those fees and enables faster transaction speeds with the full completion of Ethereum 2.0 in a timely manner, those competitors will continue to take more market share as investors and developers look for platforms more equipped to handle growing demand.
Solana
The number one Ethereum alternative is most likely Solana (SOL) at the moment with its introduction of “Wormhole” that acts as a bridge between the Ethereum and Solana blockchains. Wormhole essentially allows assets based on the Ethereum network to move between the Ethereum and Solana networks with ease.
The two biggest reasons Solana poses a serious threat to Ethereum’s supremacy though are its incredible transaction speeds and low fees. Solana is currently able to complete 65,000 transactions per second compared to Ethereum’s current ability to complete roughly 15-45 transactions per second. The massive difference means Solana users avoid long waits for transactions and fees amount to a fraction of a cent ($0.00025 average for SOL vs $15.13 average for ETH).
Solana’s far superior speeds have led to many institutions such as JPMorgan and Bank of America believing it can become the dominant platform, however, the institutional interest has led to some crypto decentralization purists avoiding it for now. Ethereum 2.0 should help alleviate many of the transaction speed and fee issues as the older platform moves to a proof-of-stake model but the longer it takes to complete, the more likely users move to other platforms.
Cardano
Cardano (ADA) is another platform which uses the proof-of-stake (PoS) model that allows users to stake holdings in order to receive rewards. The platform has a more academic orientation and claims to be the first research-first driven approach to a blockchain project. Developers are now able to build customized tokens and altcoins on the platform just as they are able to with Ethereum. Additionally, Cardano just released its first decentralized finance (DeFi) exchange in SundaeSwap.
When compared to Solana, Cardano does not compete at 250 supported per second at the moment, but it remains far faster than Ethereum currently is. Recently one of Cardano’s software engineers, Sebastian Nagel, said its Hydra upgrade should come before the end of 2022, meaning that it should support up to 1 million transactions per second if all goes to plan. That ability remains to be seen, but should it occur it would most likely make Cardano the fastest crypto transaction platform available.
Polkadot
The Polkadot (DOT) platform remains one of the biggest alternatives to Ethereum as well with its strong interoperability with the Ethereum platform. The technology connects multiple networks together allowing for the exchange of data between networks in a decentralized manner. The platform also supports dApps and non-fungible tokens (NFTs) in addition to the exchange of arbitrary data, not just certain data on select blockchains. With Polkadot allowing for the transfer of all kinds of data, it is in a unique position to capitalize on newer blockchain technologies, such as NFTs, growing in popularity.
Finally, the platform supports up to 1,000 transactions per second, easily surpassing Ethereum yet again and allowing for far lower fees as well as faster transaction completions.
Avalanche
Lastly, Avalanche (AVAX) is a newer crypto platform that started in September of 2020 that has already grown massively in popularity as it supports up to 6,500 transactions per second. The platform has also worked on its own ecosystem with the development of dApps and DeFi exchanges. Additionally, some Ethereum-based projects have already integrated with Avalanche as Avalanche has remained focused on developing bridges to improve the interoperability of the two ecosystems in a similar manner to Polkadot.
Wrapping Up
At the moment Ethereum still is the clear leader for blockchain platforms due to its massive size and the fact that it was first. However, the older has to undergo some massive growing pains with its outclassed transaction processing speed and longer than expected wait to reach Ethereum 2.0. There are many alternatives now ripe to take over more market share as the crypto ecosystem gains in popularity and users look for the most advanced platforms. That’s not to say Ethereum won’t still be the top choice in years to come, but it is going to have to fight for that position against some strong competitors.
