Ethereum faces heavy competition from up-and-coming blockchains. Cointelegraph Research asks: Which can vie for the top blockchain spot?
Ethereum is a decentralized finance giant that has seen significant growth over the past few years, spurred on by events like “DeFi Summer” and the rise of nonfungible tokens (NFTs).
Ethereum’s popularity, however, may be leading to its downfall, as other protocols look to eat away at or completely consume its market position.
Bitcoin (BTC) is the mother of all blockchains and was the first modern iteration of what is widely known today as cryptocurrency.
Since then, there have been numerous attempts to provide users greater functionality, but most have not had the staying power.
One that has risen to the challenge is Ethereum, with its native Ether (ETH) coin now the second-largest cryptocurrency by market capitalization.
Cointelegraph Research has released a 74-page report that does a deep dive into Ethereum’s rise to this position, starting off by examining Bitcoin alongside Ethereum’s history and where it is today.
Ethereum provided users with a way to create smart contracts in a way Bitcoin could not, which helped propel Ethereum to its current status as the leading blockchain for DeFi.
It’s clear that Bitcoin is here to stay, and there have been advancements in its DeFi capabilities — mostly utilizing layer-2 solutions to help scalabilities.
Such as Lightning Network, Portal, and DeFiChain. However, Ethereum is still out in front of Bitcoin in the DeFi space, but can it stay there?
Ethereum saw unprecedented adoption in 2021, peaking at 800,000 daily active users in November.
It has real-life adoption use cases, with a total value locked of over $150 billion across DeFi applications running on the blockchain in 2021.
Some of the services offered by decentralized applications on Ethereum include lending, derivatives, asset management, stablecoins, trading, and insurance.
However, due to the increasing adoption of the blockchain over the past several years, its popularity is also its curse.
The more the network is used, the more congested it gets and the higher the transaction costs, also known as gas fees, subsequently become.
These fees are there to help incentivize the network’s miners to engage with the proof-of-work consensus mechanism it utilizes. There is an answer to the congestion and scaling issue,
And that is Ethereum’s switch to proof-of-stake and other upgrades in its full transition to what is known colloquially as Ethereum 2.0.
However, delays in going live with the various stages of Eth2’s full rollout, combined with the rising popularity of other smart contract blockchains, could knock the crown off of Ethereum’s head.
There are plenty of blockchain protocols out there trying to climb to the top of the crypto charts. In recent years, only a few have shown strong adoption, popularity, and real-world use cases,
And they are starting to get attention from some in the blockchain space who would normally go to Ethereum.
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Cointelegraph Research’s report dives into three of these blockchains: Solana, Polkadot, and Algorand. Each protocol’s history, unique characteristics, ecosystem.
And the potential to scale is explained in detail to help determine if any of these chains have what it takes to be the “Ethereum Killer.” - Cointelegraph!