Since Vitalik Butterin first proposed the concept of Ethereum in his white paper, the project has made several noteworthy strides. This project was eventually finished in 2015, and today, the market capitalization of Ethereum increased to over USD 250 billion with 2970 projects and 50.5 million smart contracts. With the introduction of Ethereum, the emerging blockchain technology shifted in focus from cryptocurrencies as financial instruments to something more useful. Ethereum has become popular among blockchain programmers and small and large organizations due to its free public accessibility and smart contract capabilities.
As blockchain technology progressed, many new blockchain platforms emerged with their unique advantages for building blockchain applications. Though the market share of Ethereum is still the highest, with millions of decentralized application projects running over this network, new networks like Solana, Cardano, Binance smart chain (BSC), and Polygon are also trying to capture the market share. The race for blockchain technology will continue in this web3 era of decentralized distributed ledger technology (DLT). Let's explore the various blockchain networks and their goals in this article.
Ethereum debuted as a distinct blockchain platform in July 2015. However, it was inspired by earlier works like Bitcoin and had a similar structure. Like Bitcoin, it employs the Proof of Work paradigm. The platform's native currency is Ether (ETH). The first chance to create a blockchain application on a network to the blockchain community was provided by Ethereum. ‘Ethereum Merge’, also called Ethereum 2.0, took place on September 15th, 2022. The merge is a technical advancement that changed the proof-of-work consensus paradigm that Ethereum had previously used to a proof-of-stake approach.
Ethereum (ETH) development has persisted in demonstrating that its decentralized blockchain platform wants to stick around for the long haul with its first-mover advantage and launch of Ethereum 2.0 would dramatically lower its carbon footprint and create the foundation for future scalability advancements. Developers, startups, and established institutions continue to favor this network. Ethereum has created new products and services that can improve different areas of our lives. Some of the notable projects on the Ethereum network include:
DeFi refers to decentralized finance, and it has no centralized authorities that can prevent you from making payments or gaining access to anything at any time. Traditional financial process services rely on intermediaries, whereas a decentralized financial system works on public, permissionless blockchain technology. DeFi leverages smart contracts and cryptocurrency to offer services without using intermediaries. A smart contract is a specific solidity code that runs on predetermined criteria on the Ethereum blockchain. When a smart contract is deployed on the Ethereum network, it becomes immutable and always functions as specified in the smart contract. DeFi covers various activities and service categories such as - Stablecoin, exchanges, credits, derivatives, insurance, asset management, etc.
Another Ethereum blockchain application is Decentralized Autonomous Organization (DAO), a jointly owned, blockchain-governed organization pursuing a common goal. DAOs enable us to collaborate with like-minded people worldwide without relying on a kind leader to oversee the finances or daily operations. No CEO or CFO has the authority to spend money at will or to tamper with the books. Instead, the organization's operations and financial decisions are governed by blockchain-based rules built into the code. They have internal treasuries that nobody can access without the group's consent. To ensure that everyone in the organization has a voice and that everything takes place in full transparency on-chain, decisions are made through proposals and voting. It uses the consensus mechanism of the Ethereum platform.
Ethereum blockchain network is the first and most used platform for developing NFT technology projects. NFTs are tokens used to signify ownership, like works of art, valuables, and even real estate. No one can alter the record of ownership or copy/paste a new NFT into existence, which secures ownership of an asset. Applications for NFTs are growing by the day. Most NFTs are created according to the ERC-721 standard. There are additional standards like the ERC-1155 standard, which is very helpful in the gaming industry. And more recently, EIP-2309 has been implemented to significantly increase the efficiency of NFT minting.
Digital decentralized applications (DApp) run on blockchain networks, most of which are created on the Ethereum platform. These DApps can be designed for several uses, such as social media, gaming, and banking. Smart contract code for DApp runs on a decentralized blockchain network, where data is stored on the Ethereum blockchain and implemented app logic using smart contracts. Dapps cannot be changed once they are deployed on the Ethereum network.
These are a few examples of popular blockchain projects that can be created on any blockchain platform. As new blockchain platform growth is happening, new competitors are ready to challenge the authority and monopoly of the Ethereum blockchain platform.
One of the swiftest blockchain platforms, Solana is an excellent substitute for Ethereum. It supports many decentralized apps, smart contracts, and NFTs, DApps. Solana proposes the Proof of History (PoH) technique to validate transactions and the creation of blocks across the whole blockchain ecosystem. The native token of Solana is Sol. Some of the strengths of the Solana network include quick transactions with transaction per second (TPS) of 50,000, with minimal transaction costs, and more compatibility with NFTs and smart contracts. One significant drawback of Solana is that it is not entirely decentralized, unlike Ethereum, which has more than 200,000 validators.
Charles Hoskinson, one of the Ethereum co-founders, founded and launched Cardano in 2015 and 2017, respectively. It employs the Proof of Stake (PoS) Ouroboros blockchain consensus mechanism. It focuses on decentralization, smart contracts, scaling, and governance. The network's native token is called ADA.
Cardano focuses on enterprise DApps that can make it simple for businesses to utilize blockchain resources. Its benefits include being a green product that is good for the environment and having a two-layer architecture that is more effective than other platforms. It also leverages the Cardano Clearing Level, which enables users to trade ADA for relatively low fees and quickly.
One of Cardano's disadvantages is that its blockchain is currently being developed; many crucial elements, like scalability, are still under development. According to a recent survey, Cardano's developer environment was one of the slower-growing ones, rising by only 90% compared to other ecosystems like Solana and Near, which both had over 4x developer growth while having smaller market caps than Cardano. Haskell's complexity as a programming language may be to blame for the lack of developer interest.
One of the most well-known blockchains in the world, BNB Chain, is committed to providing the fundamental infrastructure required for future widespread adoption while continuing to be a community-first, open-source ecosystem with a permissionless and decentralized environment.
BNB Beacon Chain (BC) and BNB Smart Chain are the blockchains that makeup BSC Chain. The blockchain element in charge of the BNB Chain's governance and staking and voting on the BNB Chain is known as the BNB Beacon Chain. The BNB Smart Chain, on the other hand, is a blockchain component with hubs for many chains, is compatible with EVM, and has consensus layers.
When Binance determined that Binance Chain couldn't provide users with the best experience, Binance Smart Chain (BSC) was created. To benefit from the speed of the blockchain, developers could move their projects from Ethereum to BSC because BSC is EVM compatible. The ecosystem's broad range of options for whatever you want to accomplish is one of BSC's greatest advantages. Some of the drawbacks of this system include deflationary tokens and overdependence on Ethereum. Therefore, BSC will always exist in the shadow of Ethereum if it doesn't develop in more innovative ways.
Polygon is an Indian blockchain layer 2 platform. It aspires to provide an Ethereum-compatible multi-chain blockchain environment. It uses a Proof of Stake (PoS) consensus methodology, which first validates transactions using a network of off-chain validators before completing them on Ethereum's main chain. This can significantly lighten the load on the primary blockchain (layer 1), reducing network congestion, accelerating transaction processing, and decreasing gas costs. The native token of Polygon is called MATIC.
The Polygon network offers two types of chains: standalone chains, independent blockchains on the Matic PoS chain compatible with Ethereum, and protected chains, which increase their security by relying on a network of knowledgeable validators.
One of Polygon's drawbacks is that it is more dependent on Ethereum, and the cross-bridges used for transferring transactional data from Layer 2 (polygon Matic) to layer 1 (Ethereum network) is not very foolproof hence cross-bridge attacks and zero-day vulnerabilities are hot favorites for cyberattacks. How the switch to Ethereum 2.0 will impact the growth of the Polygon network is still under scrutiny, there is a severe threat to this network from the intense competition among different scaling options.
One of the top Layer 1 crypto projects of 2022 is Avalanche, a blockchain powered by smart contracts on Layer 1. It strives to tackle some of the most challenging problems facing the sector. These problems include scalability and high transaction costs. The primary distinction between it and other blockchains is that Avalanche is composed of three blockchains rather than one. All three blockchains are protected and verified by the primary network. As a result, Avalanche can retain a sufficient level of decentralization while achieving a high throughput of 4,500 transactions per second.
Algorand is another cryptocurrency that seeks to overcome the scalability blockchain trilemma and has become an important name in the best Layer 1 crypto projects list. It is compatible with BFT (Byzantine Fault Tolerance) and operates on a Pure Proof of Stake (PPoS) consensus. It is claimed that the transaction throughput is comparable to that of major banking and payment networks.
Smart contracts in Algorand are created in a language called Transaction Execution Approval Language (TEAL) and Python using the PyTeal package. Because it supports loops and subroutines, TEAL is Turing-complete and resembles an assembly language. Algorand Virtual Machine (AVM) runs on every node on the blockchain and interprets the TEAL codes to run smart contracts. AVM attempts to make blockchain development more accessible.
A virtual machine called Aurora is based on Ethereum (EVM), one of the highest-performing third-generation Layer 1 protocols from one of the most well-known companies in the field. It is based on the near protocol. It aims to be an Ethereum-compatible scaling solution. As a result, developers can operate their applications on a high-throughput, scalable, and future-proof platform while charging their consumers less for transactions.
Other notable blockchain competitor platforms include Tomo, Fantom, ARBI, Celo, Moonbeam, Moonriver, Gnosis, etc. Many new blockchain platforms are available for blockchain developers to choose from, but new security risks threaten this network until appropriate security measures are established.
BlockChainSentry’s blockchain security solutions gather the most up-to-date knowledge and experience working with a broad range of blockchains, including Ethereum, Solana, Cardano, BSC, Polygon, Quorum, Avalanche, etc., and all EVM-compatible blockchains. Expert team of blockchain and smart contract auditors with security backgrounds in this area work with BlockChainSentry. We specialize in cybersecurity and due diligence and operate with the newest technologies and tools to provide the safest and most efficient security solutions for all layer 1 and 2 blockchain projects.