Alternatives to Ethereum
There is no doubt that the world of blockchain and cryptocurrencies has become highly competitive — new cryptocurrencies and platforms constantly emerge offering improvements or solutions to the problems of the existing ones.
Ethereum is the first platform on which you can create smart contracts and decentralized applications. In the last year there have been some platforms that promise to solve the current problems of the previous ones. Ethereum is also working on improving its platform.
Ethereum has a lots of competitive platforms that try to overcome them in popularity and usability, but for now there are only promises. Today we will look at some of these alternative platforms. Each platform, besides trying to solve existing problems, it adds value to itself by creating something new that does not exist in Ethereum.
Introduction to Blockchain
Let’s first talk about blockchain and what it is exactly. The concept of the first blockchain technology gets its final look back in 2008, behind the creation of it is one or a group of several people united behind the nickname Satoshi Nakamoto. In 2009, the first application of the blockchain technology, the cryptocurrency Bitcoin, was released, where this technological novelty called Blockchain serves all transactions. Bitcoin technology blockchain solves the problem with the Double Spending (spend value more than once) without the need for a central server to guarantee the authenticity of the transactions.
Blockchain is a decentralized public register for all transactions that have ever been made on a network. A number of transactions forms a single block. As all blocks are linked to each other and encrypted, containing information about their predecessor, they also have a timestamp of their creation, transaction data where each transaction contains information about the previous one. In this way, the block allows full transparency of the information recorded in it.
Blockchain technologies provide a “peer-to-peer” connection, using a protocol to validate new blocks. Once data is stored in any block in the blockchain, they can not be changed (they are immutable) without affecting the previous block they are linked to. Thanks to this, the blockchain technology is supposed to be extremely secure.
Introduction to Ethereum
And because we’re going to talk about what Ethereum’s alternatives are, let’s talk about it and what is connected with this platform.
Ethereum is a decentralized platform that can run smart contracts, applications that work exactly as they are programmed, free of censorship, fraud, or third party interference. It is one of the most famous blockchain platforms. It was created in 2013 by Russian-Canadian programmer Vitalik Buterin. In 2014, is officially announced, with the initial coin offering or in other words, ICO, between July and August, the same year. The platform became a reality on July 30, 2015 with 11.5 million coins released in circulation.
The consensus protocol that Ethereum currently uses is Proof-of-Work (PoW), which can process only 15 transactions per second.
This consensus method also prevents Ethereum from being able to repair decentralized applications on the network where there are bugs. The solution to repair a bug in the Ethereum network is by making a Soft or Hard Fork (Hard Fork is a protocol change that makes older versions of a block invalid, and in Soft Fork the blockchain can also work with the older version).
Ethereum are working on the scalability of their platform (PoS and Sharding) and are said to be up to 30,000 transactions per second. It is said that by the end of the year Ethereum will pass the Proof-of-Stake or a hybrid between the two consensus protocols. As you may know, the PoW protocol requires a large computing power, and PoS requires a certain number of coins to be used as a deposit. Let’s move on with the presentation of Ethereum and not dive into these consensus protocols.
As I mentioned, Ethereum is a platform for decentralized applications, not just one of the many cryptocurrencies. Writing smart contracts on the platform is most often done through the Solidity programming language. This is to a certain extent a minus, because in order to be able to write applications, you have to learn another programming language (in my opinion, this is not a problem for experienced developer). While the other platforms we are going to look at make it possible to write a smart contract on familiar programming languages like C#, C ++, Go, etc.
Having briefly reviewed what Blockchain is and what Ethereum is, we can move on to the alternative platforms. We will only look at the platforms that I think deserve our attention and interest.
Aeternity
The first alternative platform of Ethereum is Aeternity. It is a new platform for decentralized applications (dapps) that was launched on a test network in 2017 and is expected to become a reality in August, 2018. The interesting thing in this project is the great Bulgarian participation and the fact that the creator of this project is the “godfather” of Ethereum. Aeternity successfully launched an ICO in 2017 for its Aeon (AE) token and raised approximately $30 million.
The project focuses on scaling smart contracts and decentralized applications. Scalability is achieved by shifting off-chain contracts. Instead of blockchain, Aeternity’s smart contracts are executed in state channels between the parties involved in the contracts. State channels are, in simple terms, lines of communication between parties in smart contracts that do not touch blockchain unless they need it for some kind of valuation or transfer of value.
Aeternity includes several other features that distinguish it from the other decentralized application platforms. In particular, it includes a decentralized machine with an oracle that provides access to data from the outside world and submits them for use in smart contracts. This may mean a time check in Sofia, a football match result or a currency pair price.
In many blockchain projects, oracles pose a security risk and a potential failure point, as they tend to be separate, centralized data streams. Aeternity suggests solving the problem of oracles and their security by creating a decentralized oracle. Such oracles would make the external data unchangeable once they reached the Aeternity blockchain.
Aeternity blockchain uses as a hybrid consensus protocol between PoW and PoS. PoW establishes a consensus on the Aeternity platform, and PoS controls the platform’s ecosystem. Generally, AE token owners can vote for development suggestions and changes based on their share of AE tokens they own. In PoW, miners are checking new blocks similarly to the current Bitcoin and Ethereum model. However, Aeternity uses light variations to optimize the consensus mechanism for easier network scaling.
The Cuckoo Cycle is a new graphical-theoretical Proof-of-Work algorithm that combines the scalable memory requirements with an immediate check. The Cuckoo Cycle stimulates devices with dynamic RAM, whose design means you can mine Aeternity tokens from a mobile device.
Also, Aeternity will introduce a new, more secure language for writing smart contracts called Sophia — a strongly typed, functional programming language resembling ML and Reason languages. It is compiled on the Aeternity virtual machine — a high-level machine called FTWVM (Functional Typed Warded Virtual Machine). Sophia’s main use will be in the level of system programming, or in other words, more sophisticated applications. Another language that will be able to write smart contracts is the language Varna, which resembles Bitcoin’s scripting language, but without loops and a fixed price of gas. It uses its own virtual machine — HLM (High Level Machine). Varna is designed to be used for fast, everyday smarter contracts. And the last language for smart contracts to write is the well-known language in blockchain community — Solidity.
In my opinion, this is one of the most promising projects and with the innovations they bring, I think it seems to be a very good alternative to Ethereum.
EOS
EOS is one of the projects and perhaps the only one to be a direct competitor of Ethereum. Many people wonder if this project deserves the title “The Ethereum Killer”. Let’s look at this platform, and let everyone decides for themselves how much this platform is a competitor to Ethereum.
EOS.IO was introduced to the world in 2017 by the company called block.one, the CTO of this project and the person most likely to associate with is the developer Daniel Larimer, who also co-founded Steemit. EOS announced a 350-day ICO. June this year they announced the launch of the mainnet platform, but it turned out to have a lot of software bugs and work on resolving them, which in turns has pushed many investors out of the project, and people have also stopped believing in this project. However, let’s explain more about this platform and what it does to its users, besides promises to this date.
It is said that the EOS platform includes horizontal and vertical scaling, enabling it to perform millions of transactions per second, and thus provide the use of blockchain technology by the everyday user. If this becomes a reality, it will exceed the current transaction speed and will certainly make EOS one of the leading platforms for creating decentralized applications. EOS is positioned as a solution to all the problems faced by Ethereum, both in scaling and in use.
The consensus algorithm used is called Delegated Proof-of-Stake (DPoS). With the DPoS protocol, coin holders can vote for representative nodes, which are responsible for transaction verification and consensus building. These representatives are also paid to perform the work and are called delegates (21 delegates). Through this consensus protocol, EOS claims they will be able to perform over 1000 transactions per second. This, to some extent, denies the saying that EOS is fully decentralized, but this is for an other discussion. To write smart contracts, EOS allows users to use any language that can be compiled into Web Assembly (WASM), and because of this, the majority of developers prefer to use C++ that is supposed to be one familiar programming language for many.
As I mentioned, EOS is one of Ethereum’s leading alternatives, and if it succeeds in delivering all its promises, it will not just be a leading alternative, but a leading platform in the block technology world.
NEO
NEO, also called the “Chinese Ethereum” in the crypto world, is the first open source network created in China. Both NEO and Ethereum offer a decentralized network and a platform for smart contracts to work without third party intervention. Both platforms are great in this but have some significant differences.
As a major difference, we can mention that NEO is much more scalable than Ethereum. It can handle multiple transactions at once, significantly reducing the waiting times of its users. Although Ethereum developers are working on network scalability, it still can not approach the 1000 transactions per second of NEO. NEO uses the delegated Byzantine Fault Tolerant (dBFT) consensus mechanism. This is the improved version of PoS. dBFT makes NEO a more scalable platform than Ethereum.
Another major difference between NEO and Ethereum is that the first one supports multiple programming languages, while Ethereum’s Solidity language is similar to JavaScript, but it still requires users to learn a new programming language. NEO allows developers to use C#, Java and Python to write smart contracts. Perhaps this is one of the reasons for the popularity of the NEO platform, except that it is the first Chinese one. One major downside, I think, is that most of the documentation is in Chinese, and this would stop many developers from starting to develop on this platform, although it supports so many programming languages.
NEO wants to prevent any opportunities for Hard Fork such as Ethereum / Ethereum Classic. For this reason it is programmed in a way to avoid this entirely. While the Soft Fork is still possible, the Hard Fork is completely removed as an opportunity.
As a conclusion, I would like to mention that the NEO coins are not mined. Instead, the holders of this coin receive NEO GAS, which is referred to as a NEO coin dividend, and can be obtained in any appropriate NEO portfolio that supports GAS.
QTUM
One of the most promising Ethereum alternative is Quantum (QTUM). QTUM combines many of the best features of blockchain technologies such as Ethereum, Zcash and Bitcoin. The flexibility and API integration of Ethereum, Zcash’s anonymity and Bitcoin’s security and scalability have been implemented through Go Mobile Strategy at Quantum. The goal of Go Mobile is to move blocked apps to the hands of ordinary users and businesses who spend most of their time using their mobile applications.
QTUM uses the Proof-of-Stake consensus mechanism and hopes to increase the scope and interoperability of smart applications, especially for business and institutional purposes. In addition, QTUM will create tools, templates and other easy to use smart contract gadgets to help businesses create and execute smart contracts.
The idea behind QTUM is to make smarter contracts easier and safer, while offering interoperability with leading cryptocurrencies such as Bitcoin and Ethereum. The basis for the QTUM code is Bitcoin’s blockchain, but QTUM developers have added layers to the Bitcoin blockchain that allow the Ethereum Smart Machine Virtual Machine (EVM) to run over Bitcoin. As such, QTUM benefits from the new developments in Bitcoin and Ethereum communities, and smart contracts built on Ethereum can be easily transferred to QTUM.
Overall, although everyone can use QTUM, the QTUM Foundation focuses on the business application of smart contracts. Their goal is to facilitate the transition from legacy systems to aging organizations to blockchain-based solutions that increase automation and reduce costs.
A major obstacle to the widespread adaptation of smarter DApps-based contracts is their inability to be managed by a Light Client. Light Client is a node in a blockchain network that does not support the complete blockchain history. Instead, every time you sign in, it tracks only some of the last blocks in the chain to verify the transactions.
QTUM introduces something new and different — managing smart contracts from your mobile phone or from a new computer within a few minutes. This is possible because QTUM uses UTXO technology that allows simple payment verification (SPV). SPV allows light client to verify transactions without the need to run Full Node. You can execute a smart contract from your mobile phone with a few clicks, allowing users to use the blockchain technology from their mobile phones easily and quickly. This new introduction, which makes this project, allows them to be aligned with other platforms for decentralized applications and can be safely identified as an alternative to Ethereum.
Stratis
Stratis was founded by the entrepreneur and C# developer Chris Trev, who launched an ICO on June 21, 2016, in which nearly $600,000 have been raised. Stratis is a next-generation technology designed to handle more transactions per second than Ethereum. It is said it is processing nearly 20,000 transactions per second compared to Ethereum, where there are between 8 and 25 transactions per second.
Stratis uses standardized, smarter, smart contracts that will be tested, audited, and approved for business use, while offering blockchains that can be adapted to the needs. Private sidechains can be managed by organizations outside, but secured by the main blockchain network and customized to their needs. They can be created extremely fast, in the order of 10 minutes.
Stratis was developed in the C# programming language. It is alleged that Stratis will introduce channels through which fiat money (e.g. USD, GBP) from point to point can be transferred. Another thing Stratis will integrate to its platform are private transactions.
Stratis supports C# and is compatible with the Microsoft .NET Framework. Stratis is a Blockchain as a Service (BaaS) platform that allows companies to create their own decentralized applications. The focus is on rationalizing the process of developing and securing new projects that are private and unique to the company.
Whether Stratis will be as useful and usable as Ethereum is still unknown, but one thing is clear — it is a platform of great potential and can be considered as one of the alternatives to Ethereum.
Cardano
Cardano, similar to Ethereum, is a public and fully open source platform with plans to support smart contracts and create decentralized applications. It is mentioned for the first time in 2014 because of the need to tackle and improve the basic issues of older blockchains: scalability, security, management and interoperability with traditional financial systems. Cardano was released at the end of September 2017, and ADA (Cardanos currency) was available for trade on October 1, 2017.
The vision for the Cardano platform is to balance the needs of consumers and those of regulators — privacy and smart regulation — with the ultimate goal of providing open and comprehensive access to fair financial services.
Defining itself as a third-generation blockchain, Cardano is the industry’s first platform supported by the academic community of world-class researchers and scientists who contribute to the development of its blockchain protocol. Cardano was created entirely from scratch on the functional programming language — Haskell.
The platform plans and works on improving the technology issues of other platforms such as Ethereum, using its unique method. The first difference is that Cardano is designed in layers. This means that the transactions and accounts are separate from the Smart Contract calculations. One layer is called the Cardano Settlement Layer (CSL) where the Cardano-ADA user balances are kept, and the other is called the Cardano Control Layer (CCL) where the Smart Contracts calculations are performed. The second difference is that Cardano provides consensus through Ouroboros — a PoS consensus. Unlike PoW systems, as mentioned above, PoS allows consensus to be reached by voting, depending on how many coins a person have. Ouroboros comes with peer-reviewed mathematical proof of security and is considered to be one of the most effective consensus protocol in the world of cryptocurrency.
Cardano is one of the relatively new blockchain networks. With its peer-reviewed code and large community of scientists behind the project, they have plans to be one of the most innovative blockchain networks. So Cardano seems to have everything necessary to become one of the alternatives to Ethereum.
Conclusion
Ethereum is the first and most usable and recognizable platform for smart contracts and decentralized applications. Of course, being the number one platform at the moment does not mean that it will stay the same in the future. As we have seen above, Ethereum has many alternatives that are expected to catch up in the near future, and why they are not overtaken by popularity and usability.
More and more people and businesses are aware of the power of decentralization and the opportunities that smart contracts provide us with. You can expect more and more companies to enter this space and try to claim the “title” number one platform for developing decentralized applications.
However, we must mention the fact that Ethereum is leading in the competition and this may be due to the fact that it is the first platform of its kind and currently has the largest community of developers. Perhaps many companies, businesses and entire industries will be changed by the technology called Blockchain. The question is which platform will prevail and become the number one platform for developing smart contracts and decentralized applications.
