By Anastasia Chernikova
In 2013, software engineer Vitalik Buterin proposed that blockchain, the technology behind cryptocurrencies, could be used to support not only funding, but all kinds of decentralized applications. Buterin’s idea became the basis of Ethereum, the second largest cryptocurrency and the “world computer,” a platform for running applications without the need for centralized servers.
From social networks to collectible cards, news publishing and virtual reality games, the Ethereum blockchain today powers all kinds of decentralized applications (dapps). But as the first blockchain of its kind, Ethereum is not a perfect platform. It suffers from high power consumption, slow transaction speeds, and high transaction costs. It also suffered from scalability issues, which means transactions and applications become slower as more and more users are added to Ethereum.
In recent years, several other blockchains have sprung up, providing platforms for currency exchange and application execution while addressing Ethereum’s shortcomings. Here are five Ethereum alternatives that have great potential and are worth pursuing in the next few years.
Free TON is a high performance, scalable and secure blockchain platform with a throughput of millions of transactions per second. It is a spin-off of the Telegram Open Network (TON) project, the original plan for the Telegram messaging platform to move its app to its own blockchain.
Free TON works on multiple blockchains, which gives it the power to speed up millions of transactions. The platform supports the development of services and applications for a wide range of industries, from government agencies to private companies and individual users.
Unlike Ethereum, Free TON is not managed and maintained by a centralized organization. It is supported by a Decentralized Autonomous Organization (DAO), a community of diverse parties who use smart contracts to vote and approve project changes and directions.
The currency of Free TON is the TON Crystal. Some of the main features of the TON Crystal are its fast speed and very low transaction fees. TON users will be able to transact for less than $ 0.01 in fees and pay less than $ 0.05 per coin exchange transaction (swaps). Free TON also uses the proof of stake consensus mechanism to approve and record new transactions on its blockchain, which is much more energy efficient and environmentally friendly than the computational heavy proof of work consensus used in Ethereum and Bitcoin.
Polkadot is a multi-chain network that links multiple blockchains together, which is why it is known as the “blockchain of blockchains”. It acts as a framework that allows developers to easily create dapps and smart contracts for various blockchains and cryptocurrencies without worrying about the underlying mechanisms that connect them.
DOT is Polkadot’s cryptocurrency. Besides its monetary value, DOT allows cardholders to vote on potential code changes, which are then automatically upgraded across the network if consensus is reached. Like Free TON, DOT uses the Proof of Stake consensus mechanism to verify and approve new transactions.
Since its launch in 2020, Polkadot has climbed to become one of the top ten cryptocurrencies with over $ 40 billion in market capitalization and $ 14 million in 24-hour trading volume. The Polkadot multi-channel already hosts more than 430 projects and more are added every day. And although he is young, he has already been approved and listed on several top exchanges. Polkadot also hosts its own decentralized exchange (DEX) platform, Polkastarter.
Cosmos aims to be an “Internet of blockchains”. Like Polkadot, Cosmos’ vision is not to have a “blockchain to rule them all” but to have a constellation of blockchains that can coexist and interoperate (hence the name Cosmos). Cosmos has a simplified model that allows developers to build their own blockchains in a short time. To show off the power of the system, the creators of Cosmos used the platform to create an Ethereum clone called Ethermint, which not only supports smart contracts and dapps, but is also compatible with the original Ethereum.
Cosmos is made up of three components. Tendermint is a consensus mechanism that allows developers to create proof of stake protocols that are scalable, fast, and secure. The Cosmos SDK is the programming platform that allows developers to create their own blockchains on Tendermint. And the inter-blockchain communication protocol (IBC) is the system that allows different blockchains to communicate with each other.
The native cryptocurrency of the Cosmos network is ATOM. ATOMs give their holder the ability to stake and validate blocks, vote on governance issues, and pay transaction fees.
EOS was launched in 2019 as a direct competitor to Ethereum. Developers and supporters of EOS market it as “Ethereum for Large Business” and say it is intended to address the scale and usability issues developers face when building apps on top of it. the Ethereum blockchain.
Like Ethereum, EOS supports dapps and smart contracts. However, the blockchain outperforms Ethereum in terms of execution and transaction speed.
EOS is owned by the block.one company. Among its developers is Daniel Larimer, who is a veteran of other blockchain projects (BitShares and Steemit) and is said to have been in contact with Nakamoto during the early days of bitcoin.
EOS’s cryptocurrency is the EOS token, which is used to exchange value on the EOS blockchain. It is currently among the 20 most valuable cryptocurrencies. EOS also has an operating system, EOS.IO, which manages and controls dapps and smart contracts on the EOS blockchain. Developers must hold EOS tokens in order to use network resources and run applications on the blockchain. EOS supports between 10,000 and 100,000 transactions per second, which is why it markets itself as a suitable platform for large enterprises.
EOS uses the ‘delegated proof of stake’ consensus mechanism, in which token holders elect a limited number of voters to maintain EOS blockchain transactions and updates.
Cardano is another blockchain which, like Ethereum, is intended to run decentralized applications. Among the main characteristics of Cardano are speed and scalability.
Cardano is developed by three organizations: IOHK, Cardano Foundation and EMURGO. IOHK does most of the engineering effort, and one of the key characteristics that sets it apart from other blockchain development teams is its dedication to scientific methods. IOHK works with academic researchers around the world to peer review and verify updates before deploying them to the platform. Among the founders of Cardano is Charles Hoskinson, one of the co-founders of Ethereum.
Cardano has already implemented several robust applications on its blockchain in the banking, identity management, retail, supply chain and education industries.
Cardano’s cryptocurrency is ADA, which is supported by the eco-friendly Proof of Stake consensus algorithm and is currently in the top 20 most valuable cryptocurrencies.
Some final thoughts
While cryptocurrencies and blockchains are still in their infancy compared to fiat currencies and centralized banks, they hold great promise and may be the future of money and IT. The landscape is still diverse and fragmented, and not all existing solutions will reach the finish line. Utility, scale, speed, and community adoption are four key traits to look out for when reviewing blockchains and cryptocurrencies.
About the Author
Anastasia (Nastya) Chernikova is a technical journalist whose articles have been featured in Forbes and Esquire in Russia, Business Insider, Inc.com and other publications. She interviewed prominent tech founders, such as WhatsApp founder Jan Koum, right after Facebook bought his app for $ 19 billion, and Vitalik Buterin, founder of Ethereum, as his cryptocurrency ether was only at the beginning of its triumph. She likes the idea of the decentralized world and what blockchain brings to the financial system.