Decentralized blockchains live and die by their users. Proof of Work platforms especially rely on their miners. In this day and age, launching a new network is extremely expensive and risky. Fortunately, each new project doesn’t have to make its own network of users to leverage blockchain technology. Select existing chains allow users to upload code in the form of smart contracts to be executed on the network for a price. The choice of platform really defines a project’s vision and direction of growth during its infancy. In the early stages, an active, supportive community can breathe life into a project that would be quickly forgotten in less hospitable conditions. I want to step through a couple of the major players in the blockchain (not necessarily decentralized) platform game and compare their relative benefits.
The easiest and by far most popular platform for starting a blockchain project is Ethereum. It’s a true “general purpose blockchain” currently supporting over 1500 DApps on its network. Contracts are run on the Ethereum virtual machine using the decentralized network. The network currently utilizes a Proof-of-work scheme, but plans to switch to Proof-of-stake in the future. The
biggest benefit to using Ethereum as the backbone of your DApp is the existing codebase. The extensive, proven, and extremely thorough community-supported documentation makes getting started easy.
For launching an ICO, Ethereum has two existing standards that make issuing coins extremely easy: ERC 20 (fungible) and ERC 721 (non-fungible) tokens. The copy-pasteable code for creating a new issuance of tokens makes the process extremely quick and simple.
Ethereum also has vast amounts of smart contracts already on its blockchain. The price to add a contract to the chain directly comes from how much storage and computation it takes to add it, so the access to on-chain libraries lowers the entry cost for new DApps. There is also a downside to this- the libraries are exposed publicly and are made of smart contracts just like the rest of the core DApp code. This means that a single compromised library can freeze a contract and potentially lock up funds- it’s happened before.
While Ethereum has a long, relatively stable , history of acting as an infrastructure for decentralized applications, EOS is a brand new creature out in the wild. It claims to have anywhere from 1k to 1M transactions per second and uses a distinct structure of a few elected “Block producers” instead of the traditional decentralized model of overwhelming numbers of miners. There have been some security scares during release, but it has the potential to enable drastically larger transaction confirmation rate and platform scalability. Developing on EOS at this time is a risky play as the platform is still in the process of rolling out, and nobody knows how it will go.
So far I’ve been rolling out the bad news, but I can’t overlook the possible benefits of developing on EOS right now. The EOS token at the time of writing has a 9 Billion dollar market cap with less than two hundred apps listed in its collection (a large number of these are listed as coming soon). There are vast amounts of people’s money on the line, and barely anything to actually do on the platform. This provides a large user base eager to push adoption of anything resembling a functional product. While on Ethereum your project could easily be forgotten or overlooked, EOS has such a small offering at the moment that any new DApp addition will likely grab the attention of a chunk of the 9B of investor money.
Another important difference is that EOS has no transaction fee. That’s right- zero. This makes it free for users to begin using a DApp, as opposed to Ethereum where every operation on the chain costs a small amount of Ether. How the no-transaction-fee system plays out remains to be seen, but it could easily drive a faster rate of user growth- especially for early adopters since they can take your product for a spin without being nickel and dimed for every action they take.
These are not by any means all or even most of the differences between EOS and Ethereum. There are deep architectural differences and they rely on entirely distinct incentive schemes for user participation. Power, performance and available operations are extremely different and I’ll go into those in another article. For now, the quick summary is that developing on EOS is, for now, a potentially extremely lucrative leap of faith.
Quorum is a niche open-source platform developed by JP Morgan Chase as a fork (git fork not blockchain fork) of Ethereum for private corporate use. They call it an “enterprise-focused version of Ethereum.” The platform has a few major differences: privacy — it allows encrypted, private machine states, account permissions — not just anybody can spin up a node and join the network, and throughput — well over 100 transactions per second is achieved through alternative consensus mechanisms (no need to PoW mine on a private network). The strong focus on security lends itself to more sensitive projects that aren’t feasible to deploy on a public ledger.
Quorum is a great choice for developing an enterprise blockchain application as it keeps the extensive functionality, stability and documentation of Ethereum while providing the privacy of a closed, encrypted network. It won’t work for more open, public-facing projects and stifles the emphasis on community, but Quorum is a perfect fit for developing internal blockchain applications with a focus on tight security.
The Stellar network is built using Ripple’s technology, but instead of servicing large financial institutions it aims to help small businesses, more human-centric projects — especially in developing parts of the world. The core offering is a low-cost, cross-border payment service with a mission to unleash personal potential by offering financial services to the underbanked.
NEO offers similar features to Ethereum in the decentralized DApp infrastructure space with a couple key differences. With less than a hundred DApps on the platform and a 2.5B USD market cap, the investor-incentive argument is similar to the one I posed for EOS.
There are a couple key features that make NEO a strong competitor in the blockchain platform space. First of all, NEO smart contracts can be written in common languages like C#, Java, and Python. This makes getting up and running on the platform easier. Unlike Ethereum, getting resources for running on the test net isn’t a user-controlled process — there is an online application to ask for some coins for development. I expect they are generous with test net resources given the strong need to grow their DApp offering.
A distinct value is offered in the form of digital asset certificates that afford legal protection. This encourages trust in digitized assets on the public NEO blockchain. The platform also supports international digital identity standards which could shield against future regulatory crackdowns on decentralized technologies. Lastly, NEO has a partnership with OnChain which aims to interface with the Chinese government and businesses. China has been harsh with decentralized tech, so a partnership would likely lead to a huge influx of users and growth.
The Cardano ADA token has a 4B USD market cap despite having no functioning platform at this time. The wallet is functioning, so the coin can be used, but that’s about it. They have lot’s of potential and community support, and one of their two main focuses is “fixing the issues seen with Ethereum’s smart contracts.” If they achieve this, I have no doubt Cardano will take up a spot in the blockchain development platform space. For now, it’s a project to keep an eye on.