Just 2–3 years ago, amateurs were discussing Blockchain as a new, promising technology and were speculating what the result would be. The world of cryptocurrencies, financial technologies and blockchain attracted more attention after the striking rise of Bitcoin’s rate. At the moment, a lot of people believe that there is no reason at all to enter the market, others, on the contrary, support the technologies and the development of the new projects. Thus, blockchain project CREDITS made itself known in the middle of 2017 as the alternative to the well-reputed Ethereum.
Will CREDITS be able to compete with Ethereum? First, let’s have a look at the differences.
Ethereum is a classical type of blockchain created in 2016 by Vitaly Buterin and Gavin Wood. This project is known for introducing and implementing smart contracts for the first time ever.
Smart contract — an algorithm used for making and maintaining commercial contracts in the blockchain technology.
At the time, there was a huge breakthrough thanks to which Ethereum did not vanish in Bitcoin’s shadow (BitCoin did not have viable or productive contracts).
Ethereum has its own cryptocurrency called Ether. Ether’s function is not limited to payments; it is meant for exchanging resources or registering transactions related to assets with the help of smart contracts. This is what distinguished Ethereum among the other competitors.
Ethereum operates in the PoW (Proof-of-Work) principle at the moment.
Proof-of-Work — a principle of protecting a distributed network from the misuse of services. It is based on the obligation of the inquiring party to perform a relatively complex task (POW-task), the result of which can be easily checked by the service rendering party.
PoW has many problems concerning safety and some shortcomings of a different nature:
- Waste of electricity: more powerful facilities are needed to create a blockchain successfully; much of the electricity is spent in the ‘miners race’ which is not reasonable for a financial, ecological or any other area of activity;
- Calculations performed actually remain within this network only; they do not have any practical value.
The network is protected by mining, and this is a temporary measure as a developer’s state. Ethash (Dagger-Hashimoto) algorithm is used for mining. This algorithm requires specific software; a minimum entry threshold for mining is 3.5GB of the main memory, if it is lower than that, the program will not work.
This safety system is not perfect, and this is why many attacks were made in on Ethereum. For example, in 2016 the platform survived a series of active DDos attacks. In fact, $30 million was stolen from users of Ether cryptocurrency in the summer of 2017.
It is also worthwhile to mention some technical characteristics of the Ethereum platform:
- Transaction speed is 1–5 minutes;
- Transaction cost is high (with the current rate);
- Amount of transactions per second is approximately 100;
- Average time of block creation is 15 seconds.
The biggest financial companies and soft developers show interest in Ethereum at the moment.
Whatever sort of innovator Ethereum is, it is not perfect, but it had still fixed its mistakes. By this I mean that as long as the existing projects have shortcomings, new ones will be inevitably catching up. With an alert and peppy newcomer , the CREDITS project enters the stage in June, 2018.
CREDITS is a new blockchain platform of registry type. It has the option of smart contracts like Ethereum. The multilevel system of the CREDITS software interface allows programmers to create applications based on the CREDITS adaptive platform. Users have access to modules and libraries. You can adjust these software components to your specific needs and conditions, be it business or IoT management.
The most striking novelty of the CREDITS platform are brand new, truly full-scale smart contracts. Not everybody knows that Ethereum, which was a pioneer in the smart contracts development, has limited facilities and cannot implement everything a user may want to. For example, you cannot adjust regular debit payments or a fixed debiting date. In this situation, you need to send a command to perform this or that operation from the external system. The CREDITS developers confirm that their platform is a full-scale and autonomous system that is able to perform all of these operations.
The platform model is B2B (Business-to-Business), and consequently, its target groups are banks, financial services and companies. It is critical to work out all of the aspects for collaborations with big companies — safety, technical characteristics and ease of use.
Narrow orientation will probably have influence on the amount of everyone involved in the project, but it is not a disadvantage of CREDITS.
The project advantage is the independence from mining (there is none) and the DPoS (Delegated Proof-of-Stake) principle based operation.
Delegated Proof-of-Stake — a technological tool used to democratize systems; it protects a system from the potential threat of making it centralized. DPoS implies that the company’s shareholders can influence the management process of their company by delegating their votes to competent network participants who are actually called delegates.
A homomorphic ciphering algorithm secures the system.
The homomorphic ciphering — a kind of ciphering that permits performing certain mathematical operations with a ciphered text and obtains a ciphered result which corresponds to the result of operations with an open text.
CREDITS uses mathematically complex protocols as a use of protection: Diffie-Hellman’s protocol is based on the elliptic curves and MQV (Menezes-Qu-Vanstone).
The CREDITS (CS) cryptocurrency is a local means of payment used within the system boundaries. You can use CS to pay for making a smart contract or for a currency exchange. Any use of the platform except reading is to be paid for, and this is somewhat a disadvantage. It should be mentioned that this could be an obstacle for a person but not for a company.
Here are some technical characteristics of the CREDITS platform:
- transaction speed is 0.01–3 seconds;
- the transaction cost is low (approximately 0.001 of US dollar of the amount, no more than 1$);
- amount of transactions per second is approximately 1 000 000;
- the average time of blockchain creation is 0.01–3 seconds.
Ethereum vs CREDITS:
the advantages of Ethereum:
- well-known on the market;
- well-involved users;
- innovator in smart contracts.
the disadvantages of Ethereum:
- not fully-scaled smart contracts;
- high costs;
- not really quick;
- uses some outdated technologies (PoW).
the advantages of CREDITS:
- transaction speed problem is solved;
- very low cost of transactions;
- full-scale extended smart contracts;
- millions of transactions per second.
the disadvantages of CREDITS:
- a newcomer on the market;
- a narrower orientation.
Each of these two platforms has its advantages and disadvantages which is normal. New platforms learn from the mistakes of their predecessors, and this is how the technological process works. This is why we observe the progress in the blockchain technologies.
One can conclude that these projects are oriented to different markets and different customers. Ethereum is more focused on the issue of tokens and responds to the needs of users with a small amount of transactions and to those who do not mind the question of price too much.
CREDITS is for a new kind of customer, for whom very low price and high speed are critical. We can say these are the customers who have not worked with Ethereum yet. They are new Blockchain users. The advent of projects like CREDITS cannot but creates satisfaction. Take the best from the predecessors and add new features, that’s the secret of success. We will keep up with the world of blockchain and cryptocurrencies and wait for new breakthrough projects.