Though many emerging blockchain platforms provide amazing functionality, Ethereum continues to enjoy major advantages over the others.
Ethereum was the first functional blockchain to allow users to deploy smart contracts and build DApps. For a time, learning Ethereum’s native programming language, Solidity, was the natural choice for aspiring blockchain developers. Since blockchain is a relatively new field, Ethereum’s standards and Solidity have emerged as industry standards, giving Ethereum a first mover advantage.
As knowledge of blockchain technology has become more mainstream over the past few years, many companies have started testing it and building proofs of concept that take advantage of the blockchain’s scalability, decentralization, security, and other attributes.
As discussed above, a plethora of Ethereum developers is readily available to work on new projects. It is possible to find developers to work on other platforms, or to build a platform, but there are few such developers and they are expensive.
Ethereum also has the highest number of developer tools available in its ecosystem. The more Ethereum developers there are, the more the platform gains critical mass and attracts more companies and developers. Savvy blockchain startups want to be compatible with Ethereum and Solidity to encourage developer adoption. This virtuous cycle helps Ethereum maintain its position as the dominant blockchain platform.
From a developer’s perspective, there is plenty of work on Ethereum. Learning a new platform is a great addition to a developer’s skill set, but many of them prefer to stick to Ethereum while waiting to see which other platforms become mainstream.
All blockchain platforms face the ‘Scalability Trilemma’, in which a blockchain can only stress two of the following three properties: security, decentralization, and scalability.
Many emerging challengers to Ethereum have sacrificed decentralization to improve scalability. In accordance with the Scalability Trilemma, increasing transactions per second requires decreasing the number of nodes on the blockchain, which sacrifices decentralization. For example, a network with only 10 nodes will work fast, but you have to trust these nodes indefinitely. This eliminates (or at least significantly reduces) the ‘trustless’ nature of the blockchain.
While certain new blockchain platforms are faster and more scalable than Ethereum, they have fewer nodes and are therefore less decentralized. Since decentralization is at the very essence of blockchain, these newer platforms are similar to regular computer networks rather than distributed, immutable, and public ledgers.
For companies and developers, trust in a platform is paramount. For a blockchain, trust comes from distribution of nodes. Ethereum currently has nearly 25,000 reachable nodes around the world, resulting in a trustless ecosystem.
Withstanding the Test of Time
A blockchain is most vulnerable to a 51% attack (in which one user takes control of 51% of nodes and can therefore tamper with the blockchain) when it is in its initial stages and has fewer nodes. Since Ethereum is a mature blockchain (active since July 2015) with a large number of nodes, it is less vulnerable to potential 51% attacks than newer blockchains are.
Scalability on Ethereum Sidechains
If all of the world’s applications were adapted to run on the blockchain, it would be virtually impossible for them to run on the same one. It would not matter how many transactions per second it could handle. No blockchain could hold that many entities on one chain. Even assuming that it was possible to put all of the world’s applications on one blockchain, it would not be desirable since they would become more vulnerable to attacks.
However, Ethereum can be set as the first layer (the main chain), with multiple sidechains connected to it. This setup allows for decentralization from the main chain and scalability from the sidechains without sacrificing security.
Since each sidechain is much smaller in scale than the main chain, it is less decentralized. This is acceptable because the sidechain also requires less trust. Anything of value can be moved to the main chain for security, so that cyberattacks on the sidechain layer do not result in significant damage.
With the Ethereum main chain providing decentralization and security, developers can execute scalability on the sidechain layer (thereby resolving the Scalability Trilemma to a considerable extent).
Today, Ethereum is reaping the advantages of being a first mover in smart contract and DApp functionality. These advantages include a large number of Solidity developers, a diverse array of developer tools, and a reputation as a trustworthy platform that respects decentralization while withstanding the test of time. Developers can also avoid the Scalability Trilemma and simultaneously provide security, decentralization, and scalability by putting high value items on the Ethereum main chain and using faster but less secure sidechains for scalability.
Though Ethereum is the industry leading platform today, blockchain technology is still in its early stages and in a rapidly evolving space. Therefore, it is not clear which platforms will power the next generation of blockchain-enabled internet technology. Newer platforms have the luxury of improving on various aspects of Ethereum or tailoring themselves for specific uses. It is likely that different industries will have different industry-specific blockchain platforms in the future.
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