A Winner-Takes-It-All Game or Complementary Co-Existence?

If we talk about Ethereum (ETH), we actually talk about Bitcoin 2.0, smart contracts, and a decentralised world computer. Ethereum was the first blockchain that enabled full scripting, i.e. it is Turing-complete, and thus was the natural inception-trigger for the ICO hype in 2017. At present, ETH is the native blockchain for ITOs (particularly ERC-20 token offerings). Of the top 700 tokens by market capitalisation, 87% are ETH tokens (Source: Incrementum Crypto Research Report — October Edition).

However, the subtle cryptocurrency observer/reader has certainly identified the challenges that ETH is facing: technical scalability and the slow development process with its development program Metropolis (specifically the Casper phase). This circumstance has led to the current situation where other blockchain platforms have come to the fore: most notably EOS, NEO, and Cardano (ADA). Naturally, the new amplitude of platforms gives rise to the question, whether it is a winner-takes-it-all game or a complementary co-existence that will prevail in the long run.

Let us have a look at the three ETH challengers separately.


EOS is known to most people as the largest ICO ever carried out on Ethereum (yes, on ETH itself as EOS was still in its infancy) raising a terrific amount of $4 billion. Since 1000s of transactions per second are possible (or millions employing parallelisation in theory), people sometimes also refer to EOS as the “Ethereum on Steroids”. They launched their mainnet on the 2nd of June this year, swapping the Ethereum-based ERC-20 token for their own coin on the EOS blockchain.

EOS leverages the idea behind Ethereum’s smart contract concept, while providing a similar environment based on the less human-friendly programming language C++. Nonetheless, C++ belongs to the most popular programming languages; see e.g. TIOBE Programming Community Index. I do not want to delve into the trade-off between Solidity and C++, however, let me emphasise that mainstream adoption is most frequently achieved by human-friendly products / services that are easy to understand and leverage.

Using smart contracts one can also develop decentralised applications (dApps) on the EOS blockchain. Thus, with respect to potential real-world applications of dApps, EOS provides a viable alternative to Ethereum, even though it is possible for dApps to run on multiple smart contract environments (e.g. Bancor case).

A further distinction to the ETH setup in the EOS ecosystem is given by its delegated proof-of-stake (DPOS) consensus algorithm, implying the simple logic of one token = one vote and therefore the influence on the network increases linearly with the number of tokens held. In order to achieve block validations, EOS token holders elect 21 block producers that are in turn rewarded by newly created EOS tokens (there are no incentive-based transaction fees on the EOS blockchain) and are in charge of keeping the network secure and functional. Ethereum maximalists are criticising the number of solely 21 block producers, stressing “this is not decentralised enough”. I am not judging the degree of centralisation, since it is a relative concept for me (e.g. relative to the hashing power of each party), however I want to point out (again) that we are facing the blockchain trilemma here: the trade-off between decentralisation, security, and scalability.

Eventually, what is really diametrical to the ETH ecosystem, the EOS ecosystem does not support ICOs, but only knows Airdrops. Of course, on can conduct a funding round using airdrops by distributing tokens for free and after reselling the retained team tokens in the market where the price is decided upon supply and demand. Nonetheless, the process is not straightforward and entails potential legal risks (e.g. airdropping security tokens). Further funds can potentially be raised via the venture capital firm (which is run by experienced venture capitalists based in Hong Kong) that conducts strategic investments in various EOS-based blockchain projects. The major question here remains what the influence of is?

Overall, I see EOS and Ethereum as complementary ecosystems that are not mutually exclusive nor collectively exhausting and have to be developed significantly further in order to achieve their respective visions.


A further ETH challenger that deserves our attention is the China-based project NEO, sometimes referred to as the “Chinese Ethereum” and formerly known as Antshares (rebranding was conducted in June 2017). The very basic question is, whether a blockchain project that put itself into the service of the Chinese government and exhibits a top-down governance character can have long-term success on a global scale. Of course, only time will tell, but let us have a look at the specific features of the NEO platform in order to assess the fundamental differences to ETH.

NEO’s vision is focussed on speed and regulatory compliance in order to provide structures for the smart economy. They claim that they already support a GDPR-compliant digital identity solution with PikcioChain that provides the fundamentals for the future digital economy. Moreover, NEO is also working on privacy and data protection solutions. Hence, one can already understand that the scope of the NEO project differs significantly from the one of ETH.

In terms of smart contracts, NEO provides a framework for multiple programming languages such as C#, Java, Python and plans to integrate additional ones in the near future such as C, C++, Golang, and JavaScript. Such a multitude of coding languages can attract a lot of different developers who are already proficient in one of the abovementioned languages and therefore has the potential of significant community growth and thus (real-world) applications.

Furthermore, NEO also enables ICOs that can be conducted on their platform. Nonetheless, ETH remains the winning ICO platform here since standards have already emerged (e.g. ERC-20) whereas on the NEO front this still needs development and multiple use cases.

Regarding the NEO protocol, there are various distinctions to the ETH ecosystem. First, the applied consensus algorithm is the so-called delegated Byzantine fault tolerance (dBFT) that underlies the governance model of a representative democracy. How it works on a high-level basis is that the NEO token holders appoint in total seven accountants (the delegates) who maintain the network. If the accountants reach a consensus of 66% of the new state of the blockchain, the new version is broadcasted. It is important to note here, that the accountants have digital identities and real names compared to the anonymous Ethereum nodes.

Second, on the NEO blockchain no forks are possible in theory (there was an accidental fork just recently however)! Hence, splitting up the blockchain in multiple chains is impossible. Third, gas is paid in an additional gas token (not the NEO token) in contrary to ETH where gas is paid in Ether. Last but not least, the NEO token is not divisible leveraging this feature for the tokenised share-character of their token.

To conclude, NEO’s and Ethereum’s vision are to some extent overlapping but are mostly complementary to each other and therefore I see both platforms in a co-existing state in the future.


Finally, ETH is also challenged by ADA, also known as the “Japanese Ethereum”. Overall, there is little secure information on the ADA project for an outsider. Nonetheless, this project is by far the most academically-driven one of the platforms analysed above (partially due to its peer review system) and strictly focusses on accuracy and correctness by formal mathematical verification of code.

On Cardano’s platform, smart contracts represent a native part. While with many other projects the accounting of value transactions and the execution of smart contract commands are one and the same, with ADA, these processes are separated into two different “layers”. There is the “settlement layer” for value transfer and the “computational layer” for the application of smart contracts. ADA hopes that this split will enable it to better reconcile key aspects such as scalability, privacy, regulatory issues, and compliance (Source: Incrementum Crypto Research Report — October Edition). Also, for each of these layers a different programming language is used.

In terms of consensus mechanism, ADA employs the well-known and sustainable proof-of-stake (PoS) algorithm with planned improvements in 2019/2020. PoS is a consensus distribution algorithm that rewards earnings based on the number of coins you own or hold. The more you invest in the coin, the more you gain by mining with this protocol.

To conclude, a lot is still work in progress and the promises need to be implemented. In the current shape ADA is running after ETH and can only challenge and overtake them once the theoretical concepts are running.


Summing up, I see both EOS and NEO as co-existing parts of the ecosystem, whereas Cardano can be regarded as the real challenger to Ethereum. Which protocol will prevail in the long run remains to be seen. However, as of now, Ethereum is clearly in the lead in terms of accessibility from a community perspective and the other protocols still need to be developed significantly further in order to leapfrog Ethereum’s first mover advantage.

Alethena is the first Blockchain-Asset Rating Agency made in Switzerland that is 100% independent, transparent, and neutral. Visit for more information.


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