Ethereum
Ethereum went live on July 30, 2015, and is by far the most used blockchain out there, with around 487,000 daily or 14.6 million monthly active Ethereum addresses. It is an immutable registry that facilitates us, in making crypto transfers, keeps a record of those transactions, and helps us track assets. It uses the world's second most popular cryptocurrency, Ether, as a native token. At the time of writing, (May 2022) price for Ether stands around $2236. The user can be to build Defi (decentralized finance), DEX (decentralized exchanges), and DAO (Decentralized autonomous organizations).
Ethereum uses proof-of-work (PoW) to verify its transactions and thus making it highly secure. For the long time that it has been out there, it has proved to be a reliable and secure blockchain, and it is home to thousands of dapp. Ethereum supports Smart contracts making them highly scalable and popular.
Even with all the pros, there are still some shortcomings of Ethereum. Also, one that comes to mind first is its high gas fees, i.e., fees associated with each transaction. The high gas prices have recently been a cause of concern among the community as sometimes they can go as high as $500, which might be more than the amount transferred in that given transaction. Along with sounding unreasonable, it also goes against the core idea of blockchain, which is supposed to be all-inclusive as such high gas prices cannot be supported by all. The other drawback is slow to transition speed Since Ethereum uses a PoW system for verification, it slows down the transaction concerning issues related to PoW is the computational energy associated with it which could be as high as 91 TWh annually, which is equivalent to the energy needed by a medium-sized country like Austria. Energy consumption is a cause for concern among people, especially environmentalists.
There is still some good news for any Ethereum enthusiast out there as it plans to shift from PoW (proof-of-work) verification system to PoS (proof-of-stake) by the end of 2022, which should aim to deal with some of the major issues revolving around Ethereum blockchain.
Polygon
The establishment of Polygon was in 2017, and it is also known to be MATIC. It is an India-based platform, and Plasma enabled “layer 2” or “sidechain” scaling solution that runs with the Ethereum blockchain — allows speedy transactions and low fees.
It is the first well-structured platform used for Ethereum scaling and infrastructure development. Also, the Polygon SDK is its core component, and it is a modular and flexible framework that supports building applications of several types.
Its suite of products provides developer access to all significant scaling and infrastructure solutions, including L2 solutions like ZK-rollups and optimistic rollups, sidechains, hybrid solutions, standalone and enterprise chains, data availability solutions, and more.
Polygon uses a proof-of-stake consensus mechanism that enables a consensus and achieves it with every block.
In the future, Polygon is hoping to expand beyond Ethereum and use other blockchains that are creating their own Defi (decentralized finance) ecosystems. Also to enable the mass adoption of Defi, a new blockchain infrastructure must be built, in a decentralized, immutable, and trustless manner with high scalability and the ability to deliver cheap fast transactions.
MATIC is an ERC-20 token used in the Polygon network meaning it is compatible with other Ethereum-based digital currencies. Its use is to govern and secure the Polygon network and pay network transaction fees.
MATIC token has traded for less than $0.05, and the price of MATIC has been appreciated significantly but remained below $3.00. The trading of MATIC was for around $1.6 as of 18 Feb 2022.
The supply of maximum MATIC can be is 10 billion tokens, and approx 7.53 billion MATIC have already been issued.
Advantages and Disadvantages of Polygon
Pros of Polygon
Ability to process transactions quickly: By using a consensus mechanism that completes the transaction in a single block, Polygon can maintain fast transaction processing speeds. The average time of processing a block is 2.1 seconds.
Transaction fees are low: Polygon keeps its fee low to use the platform, with around $0.01 a typical fee.
Cons of Polygon
Not an autonomous blockchain: Polygon is a Layer 2 solution that works on top of the Ethereum platform. If the Ethereum platform experiences severe disruptions or ceases to exist, then Polygon would likely lose its value.
Limited use cases for MATIC: The design of the MATIC token is to govern and secure the platform and pay transaction fees. Unlike some other digital currencies. Generally, the use of MATIC is not for everyday purchases.
Binance Smart Chain
The description of the Binance Smart Chain is best as a blockchain that runs in parallel with the Binance Chain.BSC boosts Smart contract functionality and compatibility with the Ethereum Virtual Machine (EVM). The goal of this design here was to leave the high throughput of The staked Binance Chain intact while introducing Smart contracts into its ecosystem.
In essence, both blockchains operate side-by-side. It is worth noting that BSC isn’t a so-called layer-2 or off-chain scalability solution. It is an independent blockchain that could run even if Binance Chain is not online. The saying is that both chains bear a strong resemblance from a design standpoint.
Because BSC is compatible with EVM, it launched with support for the rich universe of Ethereum tools and DApps. That makes it easy for developers to port their projects over from Ethereum. Also for users, it means that applications like Metamask can be easily configured to work with BSC.
BSC has been booming with activities like token swaps, decentralized money markets, and cute NFTs, many options to earn yield or to have fun.
How It Works
Binance Smart Chain achieves three-second block times with a Proof-of-stake consensus algorithm. Specifically, it uses Proof of Staked Authority, where participants become validators by staking BNB. If the proposition of a valid block is by them, they will receive transaction fees from the transactions included in it.
Avalanche
It is a decentralized blockchain and follows the proof of stake for validating transactions.
The use of Avax is as a native currency on the Avalanche blockchain. It was launched in September 2020 by Ava labs by a team based in New York.
It comprises three primary interoperable blockchains, i.e., X-Chain, C-Chain, and P-chain. The design of each chain is to serve a particular purpose, below is a small description regarding all the three blockchain
The Exchange Chain (X-Chain): The uses can be for creating and exchanging AVAX tokens and other digital assets. Transaction fees are paid in the native currency, i.e., AVAX same as we see in ETHEREUM, BINANCE, or POLYGON
The Contract Chain (C-Chain): It is where developers can create smart contracts for DApps. It is an instance of the EVM, i.e., Ethereum Virtual Machine, and uses a modified version of the Avalanche Consensus protocol called Snowman.
The Platform Chain (P-Chain): This chain is responsible for coordinating network validators, tracking active Subnets, and allowing for the creation of new Subnets. The P-Chain also uses Snowman.
With each blockchain responsible for a particular task, Avalanche improves speed and scalability compared to running all processes on just one chain.
Algorand
Algorand is a proof-of-stake blockchain cryptocurrency protocol. Silvio Micali, a professor at MIT, founded it in 2017. Algorand's native cryptocurrency is called ALGO.
The Algorand is designed to be a blockchain similar to Ethereum but with faster transactions and a strong focus on achieving near-instant completion which means processing up to 1000 transactions per second and less than five seconds of finalization of transaction processes.
Marshal islands are the first country to adopt digital currency SOV, which is powered by Algorand and experts believe this move from marshall islands will help curb high transaction costs and make it easier to comply with international partners, and safeguard inflation.
Algorand is a decentralized network designed to solve the "blockchain trilemma" of achieving decentralization, scalability, and security. Alogrand uses something creators call a pure proof of consensus mechanism. Algorand leverages proof-of-stake and uses a Byzantine agreement protocol. As long as a supermajority of the stake is in non-malicious hands, the protocol can tolerate malicious users, achieving consensus without a central authority, and it gives validators reward to all holders of the Algo cryptocurrency all coin holder receives the equivalent of 4 to 6 % for apr of the amount of the Algo coins by simply holding there coins this means everyone’s wallet increase at a rate of around 4 to 6 percent per year.
Algorand is composed of a company called Algorand Inc and the foundation. Non-Profit Community Algorand Foundation focuses on on-chain protocol governance and open source development and manages ecosystem growth, award funding, and cryptographic research primitives. Algorand Inc helps with the enterprise adaptation of the technology. The finalization of core development and research of the Algorand protocol is by Algorand Inc., a private corporation based in Boston.
Algorand uses smart contracts and its capability of having decentralized applications that are also known as dabs. An increase in gas fees in the Ethereum network has led many dapp developers to find other networks to build on, and some of them are choosing Algorand as an Ethereum alternative. While Algorand has this thing called standard asset protocol that is a little similar to the ERC-20 token of the Ethereum. Also, instead of creating a Smart contract itself, you only need to fill out a form to create a new asset and build a smart contract around that asset which removes certain security flaws.
Algorand has this unique layered-2 blockchain structure. The base layer 1 supports Smart contract tokens, and even NFT creation is an easy process, takes place at layer 1 of the blockchain, which helps ensure security and compatibility. However, the complex smart contract that takes up more space needs more computation power or might be too complex to resolve and done at layer-2, the verification off the main chain can be from time to time it also takes a snapshot of layer-2, which is given to layer 1 to check in .with this allows Algorand to scale with being secured.
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December 3, 2024 at 05:51 pm
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