The smart contract platform war
|Edgar Aronov 🦉||Aug 28, 2019|
Bitcoin was founded as peer-to-peer and non-governmental money. Its purpose is to do nothing else because one of the narratives is that you don’t want a form of cash taking many technical risks.
Bitcoin wants to keep its technology as simple as possible. However, developers want more. They want to use a secure blockchain where they can deploy their applications and run smart contracts, which is not doable on the Bitcoin ledger.
And that’s how Ethereum was born in 2014; an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality.
This kicked off a tremendous smart contract hype cycle, giving birth to many competitors; and investors hungry for big profits, funding all of it.
In this blog post, I’ll briefly name some of these competitors and share my opinion on who seems to be winning and why.
First, here’s a list of three most notable smart contract platforms:
Ethereum: raised $16 million in 2014
EOS: raised $4 billion in 2017
Tezos: raised $232 million in 2017
From these three, Ethereum has attracted most of the applications. Why?
Here’s one reason:
Synthetix @synthetix_ioHere's @kaiynne's new article revisiting something he wrote about last year: implementing infrastructure across different blockchains. It also includes an update on $EOS. https://t.co/1dRcCSAdyW
It's the developer tools.
Sure, both Tezos and EOS are much more scalable than Ethereum (for now), but that's where many investors get wrong.
In our current early phase, it's not the count of applications or transactions per second that matter (though they are essential). It's attracting the developer community to build the necessary infrastructure.
And how can you build yourself an active developer community? With quality developer tooling.
The Ethereum community has been focusing on the developer tools first, and applications later:
Necessary infrastructure (initial release of the blockchain)
The developer tools
The result: today, 98% of usable applications are built on the Ethereum network.
While being in the lead, I don't think Ethereum's future success is guaranteed. There are some (mostly technical) risks facing the protocol. Nevertheless, they do have a strong lead.
My personal opinion on these three:
Ethereum has a substantial lead, winning the current market
Tezos as a slight hedge for Ethereum's technical risks
EOS is the one I dislike due to its centralization and the lack of innovation (even 4b dollars can’t save them)
I think it will probably take three to five years to see if Ethereum can stay the top dog.
Whoever will be the winner of the smart contract platform wars, will probably have a market cap more than a trillion dollars.
P.S. If you have a specific topic you’d like to read in my blog, feel free to reach out at firstname.lastname@example.org and I’ll do my best to address your curiosity. Thanks!