Since its launch in 2015, Ethereum has become a pioneer in revolutionizing smart contracts. Ethereum has helped drive the mass adoption of blockchain tech in diverse industries.
The platform supports ERC-20 tokens. These tokens provide better scalability and help developers build decentralized apps. Besides, ERC-20 allowed Ethereum to become one of the most trusted blockchain platforms over the years.
Lately, the platform has been facing some limitations. These include a lack of implementation of the proof-of-stake (PoS) consensus mechanism and slow transaction speed. Today, with the rise of more blockchain platforms, Ethereum is facing some serious competition.
However, in this article, we will see what Ethereum and smart contracts are before we look at Best Ethereum smart contract alternatives.
Table of contents
What is Ethereum?
Ethereum (ETH) is the leading smart contract platform in the blockchain industry. ETH enables you to launch any decentralized app (DApp) into its network. Besides, it has one of the most trusted smart contracts to date.
Before Ethereum, crypto worked only as a peer-to-peer currency. Ethereum innovation enabled people to run apps on its Ethereum Virtual Machine (EVM). Therefore, making it easier for users to create blockchain apps.
The Ethereum smart contract platform runs on robust 256-bit software. In other words, Ethereum works on a powerful solidity software language. Also, the platform supports ERC20, ERC1400, and ERC721 smart contracts. These lines of code give many benefits, most apparent in business and collaborations. In these scenarios, smart contracts execute and support certain types of partner contracts.
Smart contracts are the biggest innovation that changed decentralized blockchain tech. They are also essential for blockchain business as well as in public and private enterprises. Thus, its benefits almost make smart contracts necessary for almost all blockchain platforms.
Read in brief: What is Ethereum?
What is a Smart Contract?
A smart contract is a software program that works with codes that a programmer controls to carry out transactions between the users and third parties. Therefore, it is a code that runs on the blockchain network with specific rules that users must follow. Also, it is an agreement that facilitates transactions between the involved parties.
Furthermore, a smart contract is a line of code on a distributed ledger (blockchain). The contract automatically executes when its terms and conditions are met. In other words, smart contracts are self-executing contracts with the terms of the deal between seller and buyer in the lines of code.
How do Smart Contracts Work?
Smart contracts run automatically and help transfer digital assets. Moreover, transactions occur under the blockchain network’s guidance. The main idea is to carry out the transactions without being compromised by any third party or fraudster.
Instead, smart contracts are blockchain-based and use a network of peers to manage the database. For practical reasons, companies are not likely to pursue setting up their network. But instead, rely on those already run by smart contract systems like Ethereum.
These systems allow anyone to set up smart contracts on their network. To make money, they charge gas fees which are payable in the form of tokens. Besides, fees relate to how much processing a particular smart contract requires.
Smart contracts can be generic or designed from scratch to suit a company’s needs. While the latter requires programmers to code the smart contract, it does allow for a vast amount of variables into the final contract.
Best Ethereum Alternatives
There are many smart contract platforms available in the market. But here we have only gathered the best Ethereum alternatives.
Cardano (ADA) is one of the first blockchain platforms based on extensive scientific research. This blockchain network is the work of Charles Hoskinson, who is, in fact, one of the developers of Ethereum. Cardano is a public blockchain, an open-source, that can be developed and modified according to the developers’ needs. Also, it works on the Ouroboros PoS consensus algorithm that gives more scalability to the platform than Ethereum.
Furthermore, it aims to provide higher interoperability, safety, and governance compared to ETH. However, Cardano is yet to implement all these features.
Cardano is different in contrast with other digital currency projects. It also describes itself as a third-generation blockchain. It means that it tries to solve problems that have troubled its predecessors.
In an interview, Charles Hoskinson said that ADA provides a unique platform that offers developers a space to work. They can also create DApps that will give great value to society. So can Cardano beat Ethereum in the near future? Will Cardano prove to be an Ethereum killer?
Hyperledger is an open-source smart contract platform. It works with some of the business world’s biggest tycoons like IBM, Intel, Samsung, etc.
Hyperledger supports many distributions like:
- Hyperledger Sawtooth
- Hyperledger Burrow
- Hyperledger Indy
Besides, it supports various programming languages and plug-ins. Also, Linux Foundation was the first company to host the platform. And now, it’s developed into a top-rated blockchain platform. Plus, Hyperledger Fabric, the support behind Hyperledger, uses the Go programming language.
Top of the list of Ethereum’s competitors is Hyperledger Fabric. Moreover, it is an open-source project. It is also supporting the development of blockchain-based distributed ledgers. Furthermore, there are now several frameworks under the Hyperledger banner. These include Hyperledger Sawtooth, Hyperledger Burrow, Hyperledger Fabric, and Hyperledger Indy.
Why Use Hyperledger Fabric
Hyperledger Fabric is an excellent smart contract platform that has proven itself a viable Ethereum platform alternative. Co-developed by IBM, it is a blockchain base that helps execute smart contracts or “chain codes.”
Finally, Hyperledger is a permissioned network. It means that all the participants in the network have known identities. This makes it the go-to choice for firms who want to create smart contracts but also need to comply with data protection laws that require them to be known. However, there is no token system.
Hyperledger Smart Contract Platform Features:
- Open Source and free to use
- Permissioned membership
- Supported by IBM
- Allows contracts to be coded in many languages
- Reliable Performance
- Supports plug-in components
Tezos is an open-source smart contract platform for application development and assets. Also, it is backed by a community of validators called bakers, builders, and researchers. Tezos runs on certain variables and accurate calculations. It is a self-governing blockchain platform that supports the creation of smart contracts and dApps. The language is relatively simple and does not require any compilers to develop dApps. The platform uses the proof-of-stake consensus mechanism.
Tezos is developed with the Ocaml programming language and adds mathematically. Plus, TRON has a proven formal verification to develop sensitive blockchain apps.
Based on the Solidity language, the TRON smart contract can conduct many transactions quickly. TRON is used both in public and private business sectors because of its various features and usage. TRON runs on the TRON Virtual Machine, which is also compatible with EVM.
TRON platform covers the following features:
- Increase in performance
- Improved storage
- High scalability
- Multiple languages
- Transactions based on a proof-of-stake consensus mechanism.
NEM was launched in the market in 2015 and is relatively a simple, smart contract platform. It uses the Java programming language, making it popular among many users. NEM has updated with the Mijin v.2, which claims to improve the platform’s scalability, speed, and security. NEM can now handle more than 100 transactions in a second. It is much higher than Ethereum, which can only make 15 transactions.
NEM runs on a proof-of-importance consensus algorithm instead of proof-of-stack or proof-of-work. This is the specific point in favor of this blockchain. PoI transaction verification on the NEM blockchain relies on the PoI algorithm’s comparative value.
NEO is almost new in the crypto market. A Shanghai-based blockchain company called OnChain built it. NEO is known as the Ethereum of China. It runs on the Solidity programming language.
NEO uses the proof-of-stake consensus mechanism and the Byzantine Fault Tolerance (dBFT) algorithm. Comparatively, it is less costly than Ethereum. NEO is surely one of the most user-friendly smart contract platforms. The blockchain aims to create a smart economy by helping digital assets with decentralized smart contracts.
- NeoVM or NEO’s virtual machine
The NEO blockchain platform is the first open-source blockchain project in China. Like Ethereum, NEO also provides the decentralized network and the smart contracts platform without any mediators.
However, NEO has many factors missing in Ethereum. For instance, NEO is scalable with a higher transaction processing capacity. NEO also has multi-language support unlike Ethereum’s one language – Solidity. Plus, NEO does not need to hard fork to upgrade.
However, soft forks are possible, but not hard forks as they require stopping the blockchain to implement. On the other hand, Ethereum has had several random hard forks like the Ethereum/Ethereum Classic fork. However, NEO does not support mining. Instead, NEO token owners get NEO GAS.
EOS is a robust platform for developing dApps. It uses the WASM programming language. The implementation of the WASM language improves the overall speed, ensures efficiency and safety. EOS focuses on features that a developer needs to build a full-fledged decentralized app on the platform. It runs with the people’s consent and approval—the community votes for any changes required on the running apps. EOS ensures zero transaction fees.
Here are the key features of the EOS smart contract platform:
- No transaction fees.
- It is fast and can run more than 1 million transactions in a second.
- Increased scalability.
EOS claims to be the most powerful infrastructure for decentralized applications. EOS combines the security of Bitcoin and the smart contracts/ dApp functionality from Ethereum to make it the most scalable blockchain platform.
Qtum emerged in 2016. It seems to be a potential disruptor that could connect the Ethereum and Bitcoin ecosystems. It is a hybrid blockchain platform that lets you build DApps for mobile devices. Qtum can host ICOs, and it is compatible with ERC20 standards. It also supports SegWit. Also, it has a built-in system leveraging smart contracts called the Decentralized Governance Protocol (DGP).
DGP enables clients to change the blockchain parameters rapidly without disrupting the natural community. For instance, when there is a new system update through DGP, the hub admin won’t need to participate. Also, Qtum clients won’t need to download new software.
Launched in 2016, Waves is an open-source smart contract blockchain solution for crowd sales and ICO. The platform is highly scalable and conducts swift transactions. This platform’s main key point is that it doesn’t require a high-end technical language. However, due to the simplicity of the platform, Waves has the least user base. Like Ripple, Wave is a platform that executes token operations. This makes it excellent for ICOs.
Zilliqa is a high-performance smart contract platform that allows highly scalable smart contracts and DApps with a sharding mechanism. It is a high-power blockchain platform that achieves 2828 transactions per second (TPS) on its testnet via sharding.
There is nothing like best because each of these projects has its advantages and disadvantages. The selection of platforms is a subjective matter. It also depends on the type of application you wish to build. Along with the above-explained Ethereum alternatives, plenty of others like Waves, BitShares, Chainlink, etc., are also penetrating the market. Finally, perhaps the crypto-sphere is expanding fast enough to support all these projects.