Top ETH rivals: Solana vs Cardano vs Polkadot vs Ethereum

Ethereum has been the leading blockchain platform for decentralized applications and smart contracts since its launch in 2015. However, in recent years, several alternatives have emerged that pose a challenge to Ethereum's supremacy. This article will examine the leading Ethereum competitors and compare their features and benefits.

Ethereum: the Pioneering Force Behind dApp Revolution

Ethereum was the first ever blockchain to introduce the concept of smart contracts — self-executing pieces of code stored on a blockchain that can be used to facilitate, verify, and enforce a wide variety of digital agreements. Before Ethereum, blockchains (e.g., Bitcoin) only functioned as digital ledgers for recording and verifying transactions and lacked the ability to execute complex logic due to their limited scripting capabilities.

Ethereum’s smart contracts are written in a Turing-complete language, Solidity, which means that any computation that can be expressed algorithmically can theoretically be executed on the Ethereum Virtual Machine (EVM). This makes it possible to create decentralized applications (dApps) on the Ethereum blockchain for a wide range of purposes, from crowd-funding campaigns and decentralized autonomous organizations (DAOs) to gaming platforms and financial services.Ethereum’s lead creator, Vitalik Buterin, likes to call Ethereum a “world computer,” emphasizing its role as a global, decentralized platform for running various types of applications.

Ethereum’s Shortcomings

Ethereum is a groundbreaking platform that has revolutionized the world of blockchain technology. However, over time, as it gained more and more attention, it became apparent that Ethereum suffers from a number of significant flaws.

Scalability

Ethereum’s scalability is one of its biggest issues. Ethereum can currently only process 12-30 transactions per second, which is nearly not enough to meet the demand of an increasingly popular global ecosystem. This results in network congestion and slow transaction speeds.

Transaction Costs

When the demand for Ethereum transactions exceeds the network's capacity, transactions compete for space in the blockchain. As a result, gas prices increase, and transaction costs can become prohibitively expensive. Over the year 2022, Ethereum transaction costs varied from $1.8 to $197.

Interoperability

As a standalone blockchain, it can be difficult for Ethereum to interact and exchange data with other networks and traditional financial systems.

Centralization

Ethereum's transition to the Proof-of-Stake consensus mechanism has been criticized for its potential to introduce centralization. Reports suggest that currently, a large portion of the ETH securing the network sits with large centralized entities. This creates a risk of network manipulation and undermines the decentralized nature of the platform.

The Solution: Third-Generation Blockchains

Ethereum’s shortcomings have given rise to the development of "third-generation" blockchains, which aim to offer enhanced scalability, improved interoperability, and greater decentralization. Some of the popular third-generation blockchains include Solana, Cardano, and Polkadot. 

Solana Overview

Solana (SOL) was launched in March 2020 by a team of developers and entrepreneurs led by software developer Anatoly Yakovenko. Boasting a theoretical peak capacity of 65,000 transactions per second, it is currently considered one of the fastest blockchain networks in the world.Solana achieves its speed by utilizing several innovative technologies, most notably a unique consensus mechanism called Proof-of-History (PoH) (a variation of Proof-of-Stake). PoH works by creating a historical record of all transactions on the network, allowing nodes to verify the order and timing of transactions without having to communicate with each other. This significantly reduces the time and energy required for consensus.

Thanks to its ability to process high volumes of transactions without causing congestion or delays, Solana also has extremely low transaction fees. For a single transaction on the Solana network, a user can expect to pay only about $0.000125. 

In addition, Solana supports cross-chain interoperability through its Wormhole protocol, a communication bridge between Solana and other top decentralized finance (DeFi) networks.

Cardano Overview

Cardano (ADA) is one of the earliest “Ethereum killers” and the second-largest PoS blockchain after Ethereum. The network was launched in 2017 by IOHK (Input Output Hong Kong), an engineering and research company, and is led by one of Ethereum's co-founders, Charles Hoskinson.

Cardano’s consensus mechanism, Ouroboros, is a unique Proof-of-Stake algorithm that is designed to be both energy-efficient and scalable. It differs from the classic PoS in that it uses a provably secure, mathematically rigorous approach to selecting the next block creator on the network.

Moreover, Cardano has a layered architecture, which further optimizes its performance. The Cardano settlement layer (CSL) serves as a ledger, facilitating the transfer of value on the network, while the Cardano computation layer (CCL) handles smart contract functionality. 

As with Solana, Cardano is an interoperable blockchain, meaning that it can be connected to other networks to facilitate the exchange of data. Cardano achieves this through the use of sidechains.

Polkadot Overview

Polkadot (DOT) positions itself as the world’s first layer-zero blockchain. It aims to solve the interoperability issues that exist in the blockchain space by serving as a foundational layer that facilitates the transfer of data and value between different blockchain networks. The platform was launched in 2020 by Gavin Wood, one of the co-founders of Ethereum and the creator of the Solidity programming language.

At the core of Polkadot’s architecture are two main components: the “relay chain” and “parachains''. The relay chain is the underlying layer that connects all the parachains together and is responsible for managing the consensus and establishing the network's shared security. Parachains are independent blockchains that connect to the relay chain and are responsible for running decentralized applications, executing smart contracts, and facilitating the transfer of value.

The Polkadot’s relay chain is secured by the Nominated Proof-of-Stake (NPoS) consensus mechanism, which works by allowing token holders (nominators) to nominate validators which will be responsible for producing blocks and validating transactions on the network. This model is considered more secure than the traditional PoS as it introduces an additional layer of accountability and decentralization to the process.

Polkadot achieves high transactional scalability by allowing parallel processing of transactions across multiple parachains. This means that as the network grows, it can handle more transactions without sacrificing performance. 

Comparing Ethereum Killers: Solana vs Cardano vs Polkadot

Our analysis will focus on evaluating the respective capabilities of each of the Ethereum killers in terms of scalability, energy efficiency, compatibility, and decentralization.

Scalability

Solana has achieved some of the highest transaction speeds and throughput of any blockchain network, with up to 65,000 transactions per second (TPS) and low transaction fees. Cardano and Polkadot both aim to achieve high scalability and performance, but their TPS rates are currently lower than that of Solana.

Energy efficiency

All three of the networks prioritize energy efficiency, with each of their respective consensus mechanisms having low energy consumption compared to Bitcoin or Ethereum 1.0. According to Crypto Carbon Ratings Institute’s (CCRI) report from 2022, Solana accounts for around 1,967,930 KWh of energy usage annually, Cardano consumes around 598,755 kWh of energy, and Polkadot uses about 70,237 KWh of energy annually. However, it is important to note that in 2022 Ethereum itself shifted to a proof-of-stake consensus mechanism, reportedly reducing its power consumption by 99.9%. Ethereum 1.0 had an annual power consumption of 22,900,320 MWh, and Ethereum 2.0 currently uses about 2,600.86 MWh (2,600,860 kWh).

InteroperabilityPolkadot is designed specifically for interoperability between different blockchain networks, making it easier to transfer assets and data between them. While Solana and Cardano also offer interoperability, Polkadot has a stronger emphasis on this aspect.

Decentralization

Out of the three networks, Solana has the highest degree of centralization due to its focus on speed and cost-effectiveness. Solana has very significant hardware requirements for its validators, making it difficult for smaller participants to join the network.

Polkadot is considered to be more decentralized than Solana due to its unique consensus mechanism, Nominated Proof-of-Stake. NPoS allows token holders to nominate validators, which are responsible for producing blocks, thus giving more power to the community rather than a select few validators.Cardano is likely the most decentralized blockchain on the list. Running a Cardano stake pool does not require a major monetary investment and is accessible to anyone.

Conclusion

The emergence of third-generation blockchains brought a new wave of innovation to the blockchain space. While Ethereum is still the leader in terms of adoption and market capitalization, these new networks offer compelling solutions to some of Ethereum’s shortcomings, such as scalability, energy efficiency, interoperability, and decentralization. 

At the moment, each of the Ethereum killers has its own strengths and weaknesses, and it is difficult to make a definitive conclusion on which one is the best. What is clear, however, is that the competition among these third-generation blockchains is driving innovation and progress in the industry forward. Third-generation blockchains are pushing the boundaries of what is possible in terms of speed, efficiency, and functionality, and this is leading to new use cases and applications in the blockchain space.

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FAQ

What is Ethereum?

Ethereum is the world’s first open-source blockchain platform that allows developers to build decentralized applications and execute smart contracts.

What are the main competitors of Ethereum?

The main competitors of Ethereum include Solana, Cardano, and Polkadot. All of these blockchain platforms aim to address the scalability, security, and interoperability issues that Ethereum faces.Which “Ethereum Killer” is the best?

There is no universal answer to this question, as each platform has its own strengths and weaknesses. It ultimately depends on the specific use case, requirements, and preferences of the user.

What are some of the biggest problems of Ethereum?

Ethereum suffers from scalability issues, performance issues, and a lack of interoperability. Additionally, there are concerns about its security and governance structure.