Ethereum (ETH) is the second most valuable cryptocurrency behind Bitcoin (BTC), and its smart-chain technology has revolutionized the game. Thanks to Bitcoin, we were able to send money without the use of an intermediary (such as a bank or government). Ethereum has gone one step farther than Bitcoin’s blockchain, which functions as a massive, powerful, and tamper-proof transaction archive.
We can establish smart contracts without the need for a third party with Ethereum. On the blockchain, these small pieces of self-executing code can be found. They also make the Ethereum network programmable, making it possible for anybody to construct decentralized apps on it (dApps). According to the State of the dApps report, Ethereum has around 3,000 decentralized applications.
Ethereum’s scalability challenges
Ethereum, despite being the first to use this technology, is not without flaws. Gas (transaction) prices are high since it is sluggish and has a lot of network congestion. It also consumes a significant amount of energy and is incompatible with other blockchains.
Ethereum is gradually being upgraded to Eth2, making it faster and more ecologically friendly. For example, Polygon (MATIC) is adding a new layer to the Ethereum blockchain to cut transaction costs and speed up the process. Layer 2 solutions are what they’re called.
Here are four to consider.
1. Cardano (ADA).
Charles Hoskinson, a co-founder of Ethereum, founded Cardano. It takes an exploratory approach to development, which means that before going live, each stage is peer reviewed and thoroughly tested.
In theory, this is amazing, but it also suggests that Cardano is just getting started with smart contracts. It still has a long way to go to catch up to Ethereum. This third-generation cryptocurrency, on the other hand, is more scalable and ecologically friendly, and the method of progressive growth ensures that the ultimate output will be far more trustworthy.
In addition, no upgrades are needed to solve the problems that Ethereum faces today: these solutions are built into the Cardano network.
2. Binance (BNB).
Binance is best known as a cryptocurrency exchange, so its presence on our list may come as a surprise to some. On the other side, the Binance Smart Chain is what makes BNB so exciting. Like Ethereum, it’s a programmable blockchain. The difference is that project creators can communicate with potential investors through the Binance trading platform. This is a powerful combination.
It’s worth noting that Binance has recently run into a slew of regulatory concerns, with governments all over the world imposing limitations on some of its riskier assets.
Binance has also been slammed for adopting a more centralized strategy. Part of the appeal of decentralization is the ability of these blockchains to eliminate intermediaries. Binance, on the other hand, frequently positions itself in the middle, a practice known as centralized decentralization.
3. Solana (SOL).
Solana is currently the quickest asset on the blockchain. It has a processing speed of 50,000 transactions per second (TPS). To put things in context, Ethereum processes between 15 and 45 TPS at the moment.
The Solana ecosystem includes over 400 projects, including stablecoins such as Circle’s USD Coin (USDC), which is integrated with Visa. It also powers wallets, decentralized exchanges, and other decentralized financial ventures.
One difficulty is that Solana does not support Solidity (the programming language used by Ethereum) (the programming language used by Ethereum). Several viable alternatives are now being explored, and Solana boasts that its Rust programming language is popular among developers.
4. Polkadot (DOT).
Polkadot is yet another cryptocurrency labeled the “killer” of Ethereum. Polkadot, like Cardano, was founded by a co-founder of Ethereum, Gavin Wood in this case. (By the way, Ethereum was created by eight people, some of whom had previously worked on other cryptocurrencies.) Polkadot, like the other projects on this list, aims to solve Ethereum’s scalability and cost problems.
Polkadot, on the other hand, has the advantage of interoperability, which enables blockchains to communicate with one another. As a result, it has been dubbed the “blockchain internet.” Developers will find it easier to transition to the Polkadot system using this way.
It’s worth adding that, given the quick speed of technical innovation, there’s a chance that a true Ethereum equivalent has yet to be established. Some say that the primary threat to Ethereum will not be another blockchain, but rather quantum computing, which has the potential to jeopardize the security of all major cryptocurrencies.
The basic challenge for all of these coins, aside from new technology, is implementation. It’s one thing to create a remarkable new technology; it’s quite another to get people to use it. And, with Ethereum accounting for nearly 80 percent of decentralized applications, any hypothetical Ethereum successor will have a long way to go.
One of the coins on the list above could dethrone Ethereum, but it’s more probable that a group of programmable blockchains will emerge victorious. Indeed, the majority of the initiatives discussed below claim to be intended to complement rather than replace Ethereum.
Still, if Ethereum can make the move to Eth2 without serious issues, it will likely continue to lead the cryptocurrency market for a long time.