If you follow the cryptocurrency world, you may have heard about “new Ethereum killers” coming out almost every day. Every other token has its own little twist to become the new standard for blockchain projects, but none of them have been able to unseat Ethereum just yet. Instead, we see a lot of investor money being poured into these smaller tokens and businesses that support them as a sign of confidence in their future potential. There are currently over 1100 different cryptocurrencies in existence. The value of all these digital coins combined hovers around $650 billion USD at the time of writing—this is more than triple what it was worth back in early October 2017. But one of those coins stands above the rest: Ethereum.
What is Ethereum?
Ethereum is a blockchain with built-in programming functionality that allows developers to run their own decentralized apps (or “dApps”). Ethereum is currently the most widely used blockchain to build dApps because of its open-source functionality, large developer community, and low transaction fees. Tokens like Bitcoin are mined or traded to produce the currency—that’s how new coins come into circulation. In Ethereum’s case, however, the system generates tokens while it’s running. Developers use this functionality to build new applications and take advantage of the decentralized Ethereum blockchain. Ethereum uses a platform-as-a-service (PaaS) model. This means that when developers create and monetize their apps, they can do so without needing to manage the underlying server infrastructure. In return for using Ethereum’s blockchain, developers pay a subscription fee to keep the network running.
How Does Ethereum Work?
Ethereum works in one of two ways. Either the user pays for each operation as it occurs or the user pays a fee that covers a set amount of operations. The Ether used to pay for these transactions comes from an account that holds the ETH that a user has. The account also holds the user’s digital wallet, which is their method of accessing the Ethereum network. Once users log into the network, they can use their wallet to conduct transactions, send messages, and run smart contracts. Whenever a user conducts a transaction, the Ethereum network charges them a fee in return for being able to use the blockchain.
Why Does ETH Have Value?
The value of ETH is determined by the demand for it as a resource in the Ethereum network. If a user wants to use the Ethereum network but has no ETH, they must purchase some in order to log in and use their wallets. The more users there are in the network, the higher the demand for ETH as a resource. The more demand for a resource, the higher the price for it. Now that we’ve established why ETH has value, we must also understand how it’s created and distributed. In order for users to take advantage of the Ethereum blockchain, they must own some ETH. Because the Ethereum network is decentralized, it must use a consensus mechanism to verify transactions. The most popular consensus mechanism is known as proof-of-work (PoW).
The Problem With Ethereum
As the original Ethereum killer, Ethereum has slowly been losing its edge as the de-facto platform for decentralized applications. One of the biggest problems with Ethereum is how energy-inefficient it is. Accenture estimates that by the year 2021, the Ethereum network will consume enough energy to power 9.5 million homes. Another major problem with Ethereum is its scalability. The Ethereum blockchain can process about 20 transactions per second. As the original Ethereum killer, Ethereum has slowly been losing its edge as the de-facto platform for decentralized applications. One of the biggest problems with Ethereum is how energy-inefficient it is. Accenture estimates that by the year 2021, the Ethereum network will consume enough energy to power 9.5 million homes. Another major problem with Ethereum is its scalability. The Ethereum blockchain can process about 20 transactions per second. That’s not nearly enough to handle the transaction volume of the global economy.
Cardano: A New Ethereum Killer?
Cardano is a decentralized public blockchain that is touted as a new Ethereum killer. Cardano has been in development since 2015, and it is the first blockchain to be created from a scientific philosophy. The main advantage of Cardano is scalability. Unlike Ethereum, Cardano uses a system called “Proof of Stake” (PoS) in which validators (or miners) are rewarded for supporting the network with a percentage of the total token supply. In PoS, the more tokens a miner owns, the greater the chance of them being chosen to confirm a block. With this method, the network only needs to make sure that a small percentage of the total token supply is staking (or online). This enables the network to scale up without worrying about network congestion.
Universa: Smart Contracts Made Simple!
Universa is another new Ethereum killer that has been getting a lot of attention lately. Universa’s main selling point is its simplicity. The company calls its smart contracts “Smart Contracts at the speed of Internet,” and they mean it. Universa’s network can process up to 10,000 transactions per second. This is 10 times faster than Ethereum’s network and 100 times faster than Bitcoin’s network. Universa also claims to be 100 times cheaper than Ethereum.
Oracles Network: Bringing Real-World Data to the Blockchain
The Oracles Network is a kind of middleware that bridges the gap between the real world and the blockchain. On the blockchain, things like real-time data, votes, or stocks are impossible because they don’t exist. The Oracles Network is a new Ethereum killer that aims to solve this problem by bringing real-world data to the blockchain. It is a decentralized network of “oracles” that allow people to use real-world data as inputs for smart contracts. Investor sentiment towards the Oracles Network has been positive, and there has been a lot of interest in their token sale. They have already raised $30 million, and they are expected to reach their $60 million hard cap before the token sale ends.
Despite being the original Ethereum killer and still being the largest blockchain network by market cap, Ethereum has many problems and is no longer the only game in town. The new Ethereum killers are coming, and they are coming for Ethereum’s spot at the top. The new Ethereum killers offer better scalability, cheaper transaction fees, and more energy-efficient mining processes. This leaves Ethereum in a precarious position: If the network doesn’t come up with a solution soon, it will be dethroned.