Ethereum has become one of the most well-known and influential names in the world of cryptocurrency. It is also the only one that comes remotely close to competing with Bitcoin in terms of value as an investable asset. While Bitcoin is recognized as the leading digital currency however, the value of Ethereum is that it is a blockchain “designed to store different types of data.” In other words, while the Bitcoin network is exclusively reserved for Bitcoin transactions, the Ethereum network is built to be adaptable, and to facilitate the transfer of all manner of types of data.
This has led to a staggering number of different applications over the years –– many taking the form of “smart contracts,” through which data and/or financial transactions are verified by the blockchain when agreed-upon parameters are met. And it is the endless potential for new contracts and applications to be designed that leads many to trust in the long-term value of Ethereum. There is in theory no end to the ways in which the platform can be used (which has even led some to describe it as something that could become a “new internet”).
As much as that potential exists however, it is also being challenged indirectly by competitors. While Ethereum was arguably the first blockchain network to gain attention as a platform for app-building and innovation, it is far from alone in its category. In recent years the following, in particular, have emerged as Ethereum counterparts worth knowing about.
In a prior comparison of Ethereum and Cardano, we noted that developers can use both blockchains to execute smart contracts and create decentralized apps (or DApps). And that more or less sums up what makes a given blockchain competitive with Ethereum: If it supports the building of smart contracts and DApps, it is effectively designed as a direct alternative of Ethereum. In the case of Cardano, however, there are additional benefits that make it worth watching as a competitor. First, its proof-of-stake consensus method for verifying transactions is viewed as a more environmentally friendly method than those practiced on many other networks. Second, its native token (ADA) has a finite supply, which lays a foundation for future demand (once said supply is largely or entirely owned, and the platform is still being used in new ways).
Solana actually has a higher market cap than Cardano, and is also positioned to be a long-term competitor with Ethereum. Once again the platforms perform similar functions. But the primary reason some buy Solana as an alternative is that it operates via a proof-of-history verification process. This has been described as being like a “decentralized time stamp or clock” that helps the network to agree on what’s occurred and when –– which in turn leads to the extremely fast verification of blocks of transactions. The simple way to look at it is that Solana effectively does what Ethereum can do –– and does it faster.
EOS is a fairly straightforward Ethereum imitation, with one crucial difference: It is designed to make it easier for developers to design smart contracts and DApps. There is almost a parallel to be made here to how web design has evolved over the years. Once upon a time, web design was largely reserved for experienced developers who knew their way around computer code; now, there are numerous platforms that simplify the process for those who don’t have development experience. EOS doesn’t make building smart contracts or DApps quite as easy as a no-code development platform makes web design. But the purpose is similar, and gives this particular network the potential to democratize Ethereum-style functionality to some extent.
Polkadot is perhaps the most complex alternative we’ll mention here, but in the eyes of some, also the one with the most potential. The purpose of Polkadot is to “connect different blockchains into a unified network,” establishing what we now know as “parachains.” Basically, rather than being a single blockchain into which smart contracts and DApps can be programmed, Polkadot connects entire blockchains under its own proof-of-stake validation and security process. Within this broad functionality, developers can create their own blockchains as new parachains.
These four are not the only Ethereum competitors out there. But they are certainly some of the main alternatives to know about, and together they demonstrate several ways in which the Ethereum concept has already been adapted. Time will tell just how influential these various versions of the concept can become.