Ethereum is a decentralized financial giant that has experienced significant growth in recent years thanks to events such as “DeFi Summer” and the emergence of non-fungible tokens (NFT).
However, the popularity of Ethereum may lead to its downfall as other protocols try to undermine its position in the market or completely absorb it.
Bitcoin and the birth of Ethereum
Bitcoin (BTC) is the mother of all blockchains and was the first modern iteration of what is today known as a cryptocurrency. Since then, many attempts have been made to provide users with more functionality, but most of them have not been viable. One currency that has taken up the challenge is Ethereum, with the parent currency Ether (ETH) now emerging as the second largest cryptocurrency by market value.
Cointelegraph Research has published a 74-page report describing Ethereum’s rise to that position, starting with an examination of Bitcoin as well as Ethereum’s history and where it is today. Ethereum offered users a way to create smart contracts that Bitcoin could not, and helped propel Ethereum to its current status as the leading DeFi blockchain. It is clear that Bitcoin will remain, and progress has been made in DeFi capabilities – mostly by using layer 2 solutions for scalability such as Lightning Network, Portal and DeFiChain. However, Ethereum is still ahead of Bitcoin in the DeFi area, but can it stay there?
Current strengths and weaknesses of Ethereum
Ethereum experienced unique adoption in 2021, reaching a peak of 800,000 daily active users in November. It has realistic use cases with a total value of over $ 150 billion unlocked through DeFi applications powered by blockchain in 2021. insurance. But due to the growing dependence on blockchain in recent years, popularity is also its path.
You can download the full report with charts and graphs here.
The more the network is used, the more it becomes congested and the higher the subsequent transaction costs, also known as gas charges. These fees are intended to motivate network miners to work with the Proof of Work consensus mechanism you use. There is an answer to the problem of overload and scaling, and it is Ethereum’s transition to Proof of Stake and other upgrades in its full transition to what is colloquially called Ethereum 2.0. However, a delay in launch with various stages of full rollout of Eth2, along with the growing popularity of other smart contract blockchains, could take the crown off Ethereum’s head.
New children in the building
There are many blockchain protocols trying to climb to the top of cryptographic charts. In recent years, few of them have shown strong adoption, popularity and real use cases, and they are starting to catch the attention of those who in the blockchain area usually choose Ethereum. The Cointelegraph Research report looks at three of these blocks: Solana, Polkadot and Algorand. The history, unique properties, ecosystem and scalability of each protocol are explained in detail to determine if any of these chains have what it takes to become an Ethereum killer.
