Crypto investors will likely have observed the dramatic price declines and bearish mood evident in the cryptocurrency market. But crypto industry insiders are optimistic – at the very least, in the long run, and view this current moment as a kind of race to determine which blockchain-related projects succeed and can become the leaders in the future of decentralization.
One of the most intense rivalries in the wild is the digital west, the ones between Ethereum, the first digital intelligent contract blockchain, and the other projects created to improve Ethereum’s technology further.
The primary currency of Ethereum (eth), has an estimated market capitalization of $229.12 billion at the time of writing. Ethereum network is moving steadily towards Merge, which will change the blockchain from its existing Proof-of-Work (PoW) method of consensus to the Proof-of-stake model that promises faster processing speeds as lower costs and capacity.
What are the Limitations of Ethereum?
Ethereum is the largest network within the NFT sector and has more than 90% of all transactions conducted on the Ethereum network. While the project has been praised as successful, ethereum has certain limitations that render it inaccessible. As an example, high gas charges hinder many customers from buying NFTs that are not available.
Secondly, there’s the issue of scaling. Ethereum is currently using a Proof-of-Work consensus mechanism, which allows it to manage thirteen TPS. Furthermore, the more transactions clogging the blockchain, the more fuel costs increase.
Although PoW has its benefits, it consumes a lot of energy, which can harm the environment if not controlled. This is a significant problem in the NFT area, as creators are frequently criticized for damaging the environment.
Ethereum’s Top Rivals
Cardano was created by one of ethereum cofounders, Charles Hoskinson. It’s taken a highly-research-intensive method of development which means that every stage is carefully reviewed and tested before it’s implemented. Cardano is also now offering technology for smart contracts. The third-generation cryptocurrency is more sustainable and scalable.
Another cryptocurrency that has been being marketed for its potential as an Ethereum rival is Polkadot. DOT is a bid to address the scalability and cost problems. However, Polkadot is more effective concerning interoperability since it allows blockchains to communicate effectively. This helps developers to migrate to Polkadot’s platform. The investors who invest in DOT are trading on technology, and it isn’t necessarily trading on the currency.
Fastly appearing on the scene is Tezos, a different innovative contract-capable blockchain that can be used to issue new digital assets and develop decentralized applications, also known as dApps. XTZ is the official digital currency used by Tezos. Numerous noteworthy projects were created on Tezos, which include those from the music, fashion, gaming, and art industries. Tezos was among the first networks to utilize the Proof-of-Stake (PoS) consensus system.
Solana is a different intelligent contract platform promising high speed, scalability, as well as low cost of transactions. Solana has failed several times during its brief existence. In the middle of summer 2021, the platform was down for several hours until developers found a flaw and restored it. The event shocked investors and disproved the claims of scaling.
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NEAR is an open-source project focusing on smart contracts and proof-of-stake technology. The main selling point of NEAR is the lower transaction costs. The company claims that NEAR’s transaction costs are ten times less than Ethereum’s. The company’s focus on community, development and the creation of new applications are among its unique attributes. The rainbow bridge technology of NEAR allows users of Ethereum to use the two blockchains.
Stellar is another open-source project allowing users to build, exchange, send, and exchange money digitally. It’s a vast undertaking that claims that all the world’s banks can run on the network. Blockchain technology helps keep the XLM network up-to-date across all devices.
Chainlink is among the few blockchain projects that provide an array of compelling services and the potential for commercial viability. Despite the numerous applications that blockchain technologies can provide, the technology creates silos. Through Chainlink, the system allows connected intelligent contracts where the parties can conduct intermediary-free agreements and enable external data to be used as actualization points to contract execution.
Ethereum is among the oldest and most valuable blockchain projects, and it isn’t going to disappear anytime shortly. One of the biggest challenges facing the network is scalability, which is being addressed with the future ethereum 2.0 upgrade, which adds an integrated PoS consensus mechanism and a fully sharded design which will allow for more efficient load distribution.
But scaling is only one of many issues that must be solved, and while the transition to a more sustainable PoS is scheduled for a while, It’s not yet clear what the roadmap for upgrade is.