What is today the leading platform is in danger of being reached by the competition. The challenges relate to new updates and the ability to coexist with other realities
If the present smiles at Ethereum, doubts concern the future. Its rise is due to the great interest that developers have shown in the blockchain platform, especially in the last year when they have flooded it with various DeFi (decentralized financial projects) and Non Fungible Token (unique digital tokens). The price of its eth currency has increased ninefold as tokens around the digital world total $ 350 billion. A value over 40% compared to all bitcoins, almost double compared to a year ago. According to many analysts, the bitcoin system is destined to succumb to the multitasking capacity of Ethereum. Still, the web 3.0 leader must guard against the competition.
As claimed by the Financial Times, Ethereum is currently lagging behind on specific technical updates. One of these, called Altair, which includes a mainnet development at the Beacon Chain, is scheduled for late October. Faster speeds than rivals, however, and price volatility risk dropping Ethereum from the top it is now gloating at. In fact, a little backlash has already occurred. By the time the number of tokens in circulation has already peaked, a slowdown or downsizing is expected, as happened last month.
The other problem in sight concerns the transition from the Proof of work (PoW) system to the Proof of stake (PoS) system. While the first mechanism involves very complex mathematical problems that miners must solve to operate in total safety, PoS is a simpler alternative method based on which the certainty that the user is not operating illegally is guaranteed by the number of tokens in its possession. This method certainly has positive results in environmental terms – the blocks are not extracted but coined – and in costs, but it is also true that it is characterized by a series of drawbacks on which Ethereum will have to try to solve them.
Among these, the monetary ones. As written, the difference that makes Ethereum a step above Bitcoin is its versatility and ability to adapt to new situations. As proof of this, there are smart contracts, computer protocols that safeguard the stipulation of an agreement. The same founder and lead evangelists, Vitalik Buterin, has ensured that its blockchain is ready to meet all the recent news for users. That of “smart contracts” could be an insurmountable advantage for other blockchains, as well as the large number of developers working with its technology.
The problems, however, come from the outside. Yes, because the exponential growth of Ethereum has resulted in another less strong, but still significant, than other realities that could oust it. Solana’s tokens, for example, have quadrupled since August, when it became the platform for NFT’s new collections. At the same time, these new blockchain platforms offer the possibility for their developers to use virtual Ethereum channels. Somehow, therefore, it is as if they are leaning on the platform. The clear example is the use of level 2 networks, or new technologies yet to be discovered but which revolve around Ethereum. This, therefore, could find itself with new competitors but always on a higher level.
In light of this, Ethereum still needs to stay ahead. It is currently struggling with the difficult transition from PoW to PoS. Another way he tries to take is to split the network (“sharding”) into 64 separate but connected registers, so that authentication does not have to be required every time and to make the transaction easier and faster for the user. All platforms are looking for their own path, even the one that is now the industry leader. With the hope that a peaceful coexistence can be achieved.