Top 5 altcoins to replace Ethereum for dApps and smart contracts

Ethereum ushered in the blockchain 2.0 era when it went live in July 2015. It was the first blockchain network that went beyond everything else at that time. Will Ethereum stay on its leading position or fail to its competitors?

Ethereum is one of the most trending cryptocurrencies. With barely a month into the new year, the virtual currency maintains a top slot in the crypto charts. Even so, its price growth has now stalled… So, will it be replaced by much more successful rivals?

Ethereum rivals earn points, criticizing its weak scalability, long delays in transactions, the cost of operations, vulnerability to hacker attacks in the smart-contract system. Are their plans to kill the giant and take his place will ever come to reality? At the beginning of 2020, a large-scale update of Ethereum is scheduled. However, even if the project manages to become a world decentralized computer, it will take another year to do so. While Ethereum is trying to solve existing problems, new equally promising projects are appearing in the market. Let’s review the most popular of them.

EOS

Block.one company headed by Daniel Larimer presented EOS in 2017, when problems of Ethereum have not yet reached the current level of scale. However, even then, many developers said that EOS project would be better. Investors believed them and invested a record amount of more than 4 billion dollars in the cryptocurrency.

EOS, like Ethereum, is a platform for developing decentralized applications. Competitors have the following differences:

  • EOS developers promise, that EOS will perform up to 1 million transactions per second. Now this figure is lower — up to 50 thousand TPS. However, even in this scenario EOS is superior to Ethereum, which performs about 15 transactions per second;
  • In EOS, transactions are performed with no fees. However, each network needs fees in order to justify the security costs. Therefore, EOS has an annual inflation rate of 1%. In Ethereum, however, you have to pay a fee for each transaction;
  • Most developers choose EOS because the platform allows to use popular C++ programming language. To create an application on Ethereum, you need to learn the Solidity language from scratch.

Despite this, EOS cannot boast an impeccable reputation. Thus, the first platform code appeared at the end of 2017. However, it constantly found serious bugs that threaten security of the network, so testing was delayed. In May 2018, the EOS mail service was hacked. Investors received letters with a fake website address. Those who clicked on the link and entered private keys lost their tokens.

In June 2018, Weiss Ratings criticized EOS for centralization. It was said that most tokens were concentrated in the hands of a small group of addresses. In addition, the Proof-Of-Stake algorithm allows the holders of the cryptocurrency to vote 30 times in the same amount. If desired, several major players can choose 21 block manufacturers, which will manage the ecosystem.

Stellar

Stellar was founded by Jed McCaleb and Joyce Kim. The project appeared in 2014 as an arm of Ripple. In 2015 developers presented and successfully launched their original open source protocol. Since then, the popularity of the new digital coin has been growing. According to CoinMarketCap, the project is now one of the top 10 cryptocurrencies in terms of market capitalization.

Stellar is a decentralized fintech-platform that provides users with simplified access to financial instruments and allows free conversion of cryptocurrencies and fiat money within a single system. With its help developers can create mobile wallets, tools for banking transactions, “smart” automatic payment systems and other distributed applications.

It is much easier to write code here than in the Ethereum, because you can use any programming language. Besides, the Stellar protocol handles more than 3 thousand transactions per second. There is also no need in gas to execute programs and the commission for the transaction is really really tiny (a fraction of a cent). Token issuers can customize their accounts, payments, tokens and special offers. Any token created can be bought or sold on Stellar decentralized exchange.

Stellar attracted several successful projects to make ICO on Stellar platform. These include:

  • Mobius Network. During the ICO, this project has raised over 39 million dollars. The choice fell on Stellar because it required an Internet-friendly network that could quickly handle large numbers of transactions, with or without low fees;
  • Smartlands. This project chose Stellar because here you can safely and conveniently trade all the assets created;
  • Kik. According to the company’s CEO, Ted Livingstone, scaling issues and gas handling have made Ethereum incompatible with their needs. Initially, it was planned to completely switch to Stellar. However, in the end, Kik decided to use a hybrid of two blockchain.

Stellar was also chosen by Ternio, ZED Network, Irene, Tontine Trust and others.

The disadvantages of this platform can only be attributed to the threshold for entry and the impossibility of mining. However, the threshold is only 20 XLM and it is set to avoid spam attacks that could slow down the system. Mining of this cryptocurrency has not been intended by the developers. In addition, it will soon be impossible to produce Ethereum as well, because altcoin will transfer to Proof-of-Stake algorithm.

TRON

The founder of the platform is Justin Sun. In 2017, Forbes Magazine included him in the list of the most successful entrepreneurs who were under 30 years old. San’s team held an ICO and in just a few days raised about $ 70 million. The platform was fully launched in June 2018.

While Ethereum focuses on practical projects, TRON is geared exclusively towards entertainment content. This project aims to create a network for the decentralized exchange of content between blockchain users, as well as for the development of entertainment applications.

The platform works in the following way:

  • Content creator places his material (pictures, music, videos, games) on the network and indicates its value in TRX;
  • a user chooses the material he likes and buys it for the specified amount of TRX; the author of the content gets the cryptocurrency for his material.

Thus, content creators and users interact directly, without Google Play, Apple Store and other third parties.

The developers describe advantages of the project in comparison with Ethereum. One of them is high bandwidth — 2000 transactions per second. It is possible to deploy large-scale decentralized applications based on TRON, which is a determining factor for working with large audiences. In addition, no transaction fees are charged for TRX transactions.

The project has been caught in the limelight of criticism several times — from the possible drain of tokens by the creator of TRON to the supposedly copied whitepaper of its competitors. Justin Sun, however, gave explanations on time and was able to defend the reputation of the platform.

The openness of the platform often plays against it. For example, the TRON network often hosts an openly questionable product, so most promising developers still use the Ethereum.

Cardano

In 2014 Charles Hoskins, one of Ethereum programmers, left the project and founded IOHK with his business partner Jeremy Wood. This is how the history of the Cardano platform began. ICO lasted 2 years and as a result the team managed to raise more than 60 million dollars. Almost immediately after the launch, the cryptocurrency went to the top exchanges and got into the top twenty most popular coins.

The Cardano platform, like Ethereum, is designed to develop decentralized applications. Developers call it a third generation project (the first includes Bitcoin and its forks, and the second — Ethereum). In this case, the main purpose of Cardano is to preserve and develop the positive aspects of the previous platforms and get rid of their inherent shortcomings. It is achieved in the following way:

The PoS algorithm is used and its supplement, the Ouroboros data transfer protocol, is used. In this case, the reward for users depends on their wallet balance and the number of transactions in the network. An improved algorithm has a high security level. In addition, it does not require expensive equipment or high energy costs.

It uses the Haskell programming language, which is considered the most secure on the market.

The platform is divided into two layers. The first one is designed for token processing, and the second one — for high-quality work of smart contracts. As a result, the platform is flexible and does not require forks to make any changes in the work.

The platform actively cooperates with government agencies to ensure that ADA coins are recognized as an official means of payment.

Other projects also have interesting developments. Having demonstrated high growth rates in the first year of its existence, the cryptocurrency is somewhat lost among competitors and it is too early to speak about its superiority over the Ethereum. The platform is rarely used in practice. Cardano’s only successful project is the Registry of Higher Education Diplomas in Greece.

NEO

In 2014, developers Da Hongfei and Eric Jean launched the AntShares platform. Originally designed to meet the needs of the Chinese market, the platform soon gained a worldwide reputation for its unlimited scalability and ease of use. However, the platform was not very effective in creating decentralized applications and digital documentation. In 2017, developers fixed all bugs and gave the project a new name — NEO. Now it is often called “Chinese Ethereum”.

Projects are similar in many respects, but there are also fundamental differences:

The real bandwidth of NEO reaches 1 thousand transactions per second. Ethereum with the speed of 15 transactions per second loses this comparison, but ETH developers are aware of its problem and actively solve it.

NEO supports Java, C++, Python, Go and other popular programming languages. But to create smart contracts in the Ethereum, developers need to learn a new language called Solidity.

NEO uses an algorithm dBFT, which unlike PoW and PoS does not allow to form parallel blockchain chains, which significantly strengthens the security system. However, it is often criticized for its high degree of centralization.

Besides pseudo-decentralization, many users are not satisfied with the lack of anonymity. The system is legally regulated, so all transactions are controlled. The developers do not intend to move to full anonymity and real decentralization, as they will continue to cooperate with government agencies and the Chinese government.

Сan these projects outperform Ethereum?

These projects are really much better than Ethereum. They have higher speed, greater scalability, extremely low or zero commissions. However, everything can change drastically after running Ethereum 2.0.

Now Ethereum has lost its market monopoly. Competitors have strengthened in the niche of games and monetary calculations. However, the more classic blockchain projects (loans, insurance, stablecoins and others) still choose the universal Ethereum. Therefore, this platform retains its leadership.

Differentiation of blockages is described in the previously mentioned report by Binance Research. For example, ETH has occupied a niche in finance, TRON and EOS — online casinos, NEO — dApp-exchangers.

Most of the projects already launched are likely to stay on the Ethereum blockchain. After all, development requires time and resources. Only those who really care about speed and scalability will decide on the transition, and there is no time to wait for updates. By the way, Ethereum is the best platform for fair blockchain casinos. Visit Ethex.bet and see it for yourself!

Blockchain enthusiast developer and writer. I love video games, blockchain and the hot symbiosis of these two worlds.