4 Blockchain Contenders In Competition With Ethereum

which ethereum competitors should i buy

Kenneth Chavis IV, CFP®, provides guidance to business owners, entertainers, professional athletes and medical doctors on growing and protecting their wealth. Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. A not-for-profit organization, Institute of Electrical and Electronics Engineers is the world’s largest technical professional organization dedicated to advancing technology for the benefit of humanity. After evaluating the top three competitors, Solana, Cardano, and Polkadot, I’ve decided to assign a numerical score for each of them based on the rubric outlined above.

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Ripple aims to offer some of that safety (although, they’ve had some serious problems recently). That said, and despite its lower price, Ethereum’s price performance in the past 12 months has been even more impressive than Bitcoin’s. Its price has risen from about $133 on March 31, 2020, to the $1,850 level on March 31, 2021.

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But as the first blockchain of its kind, Ethereum is not a perfect platform. It suffers from high energy consumption, slow transaction speeds, and high transaction costs. It also suffered from scalability issues, which means transactions and applications become slower as more and more users are added to Ethereum. Binance Smart Chain , the blockchain created by the popular digital asset exchange Binance in 2019, is another project competing against Ethereum in the smart contract space. Ethereum has a clear first-mover advantage compared to Cardano, but its scalability and performance-related issues started driving away companies and developers.

  • The token then transitioned off of the Ethereum network to a new native chain in 2019.
  • Number of coins –Bitcoin has a limit of 21 million coins once all are found, but Litecoin will have 84 million.
  • NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances.
  • Polkadot also hosts its own decentralized exchange platform, Polkastarter.

The team is already working on a layer-2 scaling solution known as Hydra. Once deployed, Hydra will theoretically enable Cardano to scale to 1 million TPS. In comparison, Ethereum 2.0 is estimated to support 100,000 TPS after deployment. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Another crypto that’s often touted as an Ethereum killer is Polkadot.

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Polkadot aims to create an interconnected internet of blockchains, thus competing in the same league as Ethereum, EOSIO and Cosmos. Yet Polkadot is a late entry to the race for interoperability, as its mainnet launched in May 2020. For one, Solana had a late start, as its beta mainnet launched in March 2020, with basic transaction capabilities and smart-contract features.

which ethereum competitors should i buy

In order to be faster than Ethereum, Solana chose to be more centralized. Thankfully, decentralization is a gradient, so Solana is less decentralized than Ethereum but still more decentralized than a bank.

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Each cryptocurrency has unique strengths and weaknesses, so it can be challenging to compare them against each other. But Solana and Ethereum share several qualities, and in some regards, Solana is stronger than its larger competitor. If you’re late to the game, there’s a less-expensive cryptocurrency that’s experiencing explosive growth. The irony is that the more strong competitors there are, the harder it will be for each one to accrue network effects that will let it outpace Ethereum. The fact there is so many promising projects actually works against them.

Without developers, according to Vinokourov, there won’t be new projects or new prospective users. Developers are particularly scarce at the moment, he said, and so those incentives are being pushed. “Unsurprisingly, speculators are piling into these platforms’ corresponding tokens as Ethereum’s dominance gets thrown into question,” Watkins said. Cryptocurrency is a volatile market, do your independent research and only invest what you can afford to lose.

Polkadot $dot

Both Solana and Ethereum are open-source smart-contract platforms that allow developers to build projects on the blockchain. These projects include non-fungible token marketplaces, decentralized finance projects, and many other types of decentralized applications . The advent of Ethereum created a new paradigm in a still-young blockchain industry and shifted its focus away from cryptocurrencies as financial tools and toward a more utilitarian purpose.

And faced with competition by other rivals to Ethereum that are more populars, Solana will unlikely dethrone Ethereum anytime in the near future. When it comes to Binance Smart Chain versus Ethereum, Binance offers faster and cheaper transactions. The network has an average block time of 3.0 seconds and a throughput of 39.2 TPS, making it around three times as fast as Ethereum. But when it comes to the most efficient consensus architecture, Cardano already has a head start. While Ethereum is still working on its transition to proof of stake, Cardano was already built on proof of stake. Cardano’s proof-of-stake algorithm makes the network more energy-efficient and eco-friendly, as transaction validation only takes a fraction of the computational power in comparison to Ethereum. New tech aside, the main challenge for all these coins is adoption.

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This is where other competing projects aka the so-called Ethereum-killers are slowly eating into the market share of Ethereum. Popular crypto analyst Lark Davis has revealed his top picks for Ethereum competitors. Ethereum is in the process of moving over to a new consensus model known as proof-of-stake in an effort to reduce fees. In this model, consensus is reached by using an algorithm that chooses a node to win a block of transactions. When a node is chosen, it produces the next block of transactions in the chain. Binance has made huge strides in catching up with Ethereum in terms of trading volume. They also both have extremely similar applications built on top of them like decentralized exchanges and lending and borrowing platforms.

which ethereum competitors should i buy

Bitcoin and Ethereum are the 2 most widely adopted applications of blockchain technology in existence today. While many people think they are competitors, it isn’t quite that simple. Both cryptocurrencies use blockchain technology to create a value layer for the internet, but Bitcoin’s technology is limited to payments and scarcity. Ethereum ethereum alternatives takes blockchain a step further by adding a computer to the value layer, replacing traditional financial functions like lending and trading with code. In November, solana also became the third asset to have a standalone price tracker in the Bloomberg terminal after bitcoin and ethereum, the two largest crypto assets by market cap.

Fortunately, there are other smart contract platforms built on blockchain that are working to evolve the concept further. Solana rivals Ethereum, which is currently the largest decentralized apps platform, by promising faster operation and lower transaction fees. It is a PoS blockchain, which makes it more environmentally friendly than PoW blockchains such as Bitcoin. Its native cryptocurrency is also called Solana and has the ticker SOL. It’s essential to understand that Bitcoin and Ethereum are fundamentally different ideas. Ethereum is a decentralized platform to host decentralized applications.

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“Solana is faster and cheaper, so it’s been a really great on-ramp for folks looking to buy NFTs, DeFi, or various applications being built on top of it,” Grayscale CEO Michael Sonnenshein told Insider. The fund is available to individual and institutional investors with an investment minimum of $25,000 and an annual fee of 2.5%. Polkadot will succeed because it’s not battling against ethereum and its fellow undersized competitors head-on in a quest for the most speed or scalability, Farooq said.

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What is the cheapest way to buy ethereum?

Buy Ethereum through Coinbase

Coinbase is a convenient and cheap way to buy Ethereum and the platform is open to 100+ countries). Coinbase will sell you ETH for a fee of 1.49%-3.99% depending on your payment method (credit cards have a higher fee than wire transfers).

The market capitalization of each consists of the total extant coins multiplied by the current trading price, and there’s a wide divergence. Bitcoin is the largest, with Ethereum trailing a distant second and Dogecoin among the top 10, according to CoinMarketCap. Traders cluster around the most popular cryptocurrencies and volume drops significantly below the top 20. One of the features that have made Ethereum such a viable platform and a worthy challenger to Bitcoin’s dominance is its implementation of what’s known as the Ethereum Virtual Machine . The EVM is an execution environment that runs on all network nodes that facilitates the use of smart contracts.

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Should Binance decide to alter any aspects of the chain or ecosystem, it has the power to do so. Over time Ethereum grew past what its infrastructure could even handle, causing congestion, slow transactions and fees so high that sending anything under $100 was borderline impossible unless timed perfectly. The token then transitioned off of the Ethereum network to a new native chain in 2019. They were then moved again after the announcement of the Binance Smart Chain. Galaxy Digital CEO Mike Novogratz also highlighted Solana, as well as Terra’s LUNA token as Layer-1 protocols that are “booming,” during the company’s second quarter earnings call earlier this month.

  • For one, Solana had a late start, as its beta mainnet launched in March 2020, with basic transaction capabilities and smart-contract features.
  • Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website.
  • Another coin to see massive price growth is AVAX, the token of the Avalanche blockchain, which was up about 215% over the last 30 days as of Tuesday morning, CoinGecko indicates.
  • That’s a good indication it’s being widely perceived as an up-and-coming crypto, and not one of the more questionable varieties that seem to be popping up almost every day.
  • Among the most promising of which are Solana, Polkadot, and Cardano.
  • Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate.
  • Should Binance decide to alter any aspects of the chain or ecosystem, it has the power to do so.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool owns shares of and recommends Bitcoin, Ethereum, and Visa. Just as we have several cellphone operators and computer brands, it’s unlikely we’ll end up a winner-takes-all scenario in crypto development. And, assuming Ethereum can upgrade to Eth2 without major hitches, it’s likely to top the crypto charts for some time to come. But Eth2 won’t be completed until at least 2022, and it won’t solve all of Ethereum’s problems. There are, however, several newer cryptos that are already more scalable, cheaper, and more environmentally friendly — and they don’t require layer 2 solutions. We do receive compensation from some partners whose offers appear on this page.

Cryptocurrency News

The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities. Your decisions may also be informed by whether you view Ethereum as a long-term investment, a short-term buy, or a speculative bet on a volatile asset.

which ethereum competitors should i buy

Dan Reecer, head of Polkadot growth at the Web3 Foundation, acknowledged that Ethereum is the incumbent leader in the DeFi space by total value locked. The value staked in DeFi protocols briefly surpassed $27 billion on Jan. 20, according to DappRadar, driven in part by the increase in value of a large majority of cryptocurrency tokens. Nevertheless, the space has seen growing adoption and development in recent months. Even though Ethereum is a digital asset, you still need a way to securely store it.

Author: Frances Yue