Ethereum for your business? Check six alternatives first
When you think of smart contracts, you probably think of Ethereum. However, a number of alternatives have appeared in the last few years. Some of them have even been gaining significant traction. Some have even been called the "Ethereum of China" or the "Ethereum of Japan". Others have been progressing and seeing their development occur quietly, slowly but surely building their fanbases.
Ethereum, and its native asset, Ether, have both exploded in popularity and value in recent months. This is because more businesses are discovering how they can make use of the Ethereum blockchain and its smart contract capabilities. From banking and finance, to AI-driven dating and telemedicine, Ethereum is proving itself to be infinitely capable.
Now, we're going to look into some of the alternatives in today's article. We chose them based on a combination of their community support, developer interest, documentation, and valuation of their related assets.
By the way, if you’re not very familiar with smart contracts yet, here is a short introduction before we begin:
One of the most important developments in the blockchain space has been what’s known as smart contracts. Smart contracts essentially mean simple computer programs that exist on a blockchain, and that can execute code (or contracts) automatically. Smart contracts have become the core feature of dozens of blockchain projects, and represent one of the biggest growth areas in the cryptocurrency field.
Now we’re ready to start:
Originally called AntShares, this platform is sometimes called the "Ethereum of China". It is funded and operated in conjunction with Bitmain, the Chinese company that manufactures the majority of the worlds bitcoin mining hardware. Some examples include their Antminer series, such as the popular S9.
While NEO has attracted the imaginations of many, and there are currently several applications running on the platform, some have suspected that NEO is in fact highly centralized, and has built-in backdoors for government agencies in the event that they decide to intervene. This so far has only proven to be conjecture, but it has also not been proven false. Bitmain's Antminer famously contained such a backdoor known as Ant Bleed, which was discovered and patched.
Others have accused NEO of simply being a copycat and not offering anything new. While those behind NEO would disagree, it is fairly obvious that they were attempting to cash in on the success of Ethereum by making a very similar, if not identical product.
Lastly, the developers have been accused of acting in a greedy way because they hold the vast majority of all tokens. This is significantly different from other Ethereum competitors that have either distributed or sold the majority of their network tokens.
Despite all the concerns surrounding NEO, tokens have been recently trading for up to USD 160, after staying in the USD 30s for quite some time.
Lisk uses a system called delegated proof of stake in order to generate more units. This means that in order to be a staker, you must first be elected as such by the community. While this may prevent some nefarious actors from entering the ecosystem, it could potentially limit the number of network participants as the average person is not encouraged to join due to the lack of steak rewards for non-delegates.
Lisk tokens have reached valuations of near USD 30 each in recent days. A few months ago, tokens were trading at around USD 3-5 each.
Often called the "Ethereum of Japan", this new platform aims to be what its creator Charles Hoskinson of IOHK calls a "third generation cryptocurrency". In recent weeks, the price of Cardano units has seen ups and downs and stood at c. USD 0.83 in mid-January.
According to the official project website, Cardano is a "technological platform that will be capable of running financial applications currently used every day by individuals, organisations and governments all around the world. The platform is being constructed in layers, which gives the system the flexibility to be more easily maintained and allow for upgrades by way of soft forks."
Cardano also offers what they call "regulated computing" - legal entities such as governments can affect the chain in accordance with a set of rules governing the platform.
Ethereum Classic actually predates Ethereum, as Ethereum Classic is the original chain of Ethereum. It is, however, slowly becoming a powerful alternative to the main Ethereum blockchain.
Following a conference in Hong Kong last year where investors and developers met and discussed the future of Ethereum Classic, prices for Ethereum Classic units tripled and even quadrupled. Additionally, the Ethereum Classic blockchain instituted a new monetary policy to ensure that it is a deflationary asset by causing a reduction in the block reward to occur every so often.
Ethereum Classic is fully compatible with the smart contract programming of Ethereum.
While Ethereum is planning to move to proof of stake, or another type of algorithm by which a blockchain network aims to achieve consensus, Ethereum Classic is not, and it will stay on proof of work for the foreseeable future. Therefore, the possibility exists that once Ethereum changes its consensus algorithm, Ethereum miners could transition to mining Ethereum Classic.
Launched by creator Diego Gutiérrez Zaldívar, RSK plans to become bitcoin's answer to Ethereum by adding a layer of smart contracts on top of the bitcoin blockchain. Not only will it allow smart contracts and distributed applications to run with bitcoin, it will also use a one to one exchange currency called Smart bitcoin or SBTC.
Smart bitcoins can only exist when an equivalent amount of regular bitcoin is locked in an RSK contract. Smart bitcoins can then be transacted independently or through a contract at a drastically lower fee.
RSK can be dual mined at the same time as bitcoin. Therefore, RSK will not need its own dedicated set of miners to process the network. If a miner chooses, they can add RSK mining to their operation and receive network transaction fees in exchange for participating.
With a laser focused target on business and enterprise use-cases, NEM is positioning itself to be the blockchain platform of choice for big business. With their unique Smart Asset protocol, NEM claims that they can offer “a fundamentally streamlined method of maintaining a secure ledger of transactions compared to a traditional database”, according to their official website.
In addition to its competitive feature set, NEM allows for the creation of new tokens within its ecosystem, much like Ethereum has its own ERC-20 tokens that have become popular for ICOs last year.
The NEM native asset, XEM, has seen strong growth in the last 12 months, and has moved from less than one cent each to USD 1.47 each at press time.
Are any of these "Ethereum killers"?
At a recent conference held in Taipei, Vitalik Buterin said that Ethereum is the Ethereum of China, Ethereum is the Ethereum of Japan, and Ethereum is the Ethereum killer. While we don't know if this will always be true, it's safe to say that at least for the time being, Ethereum is here to stay.
There will likely be incentives for users and developers to use alternative smart contract platforms like the ones listed above, however, and so we are likely to see multiple smart contract platforms operating at the same time.