The cryptocurrency market has seen significant volatility in the past few months, from its peak in late 2017 to current prices including high flying projects like Ethereum and EOS.
That has left many wondering, among the many crypto assets in the industry, which provides a better investment opportunity and has a better business prospect.
In short, it’s about which one will likely go on to achieve mainstream adoption. EOS and Ethereum both provide platform functionalities, and the future of each may well come down to the one that holds the upper hand.
What’s Ethereum (ETH)?
Ethereum is an open source blockchain-based decentralized applications and smart contracts platform.
It’s the most popular platform and is currently the 2nd largest cryptocurrency by market capitalization. The platform was founded by Vitalik Buterin and launched its ICO in 2014.
It uses a programming language called Solidity to allow anyone to build their own decentralized application or dApps by writing their own smart contract code on top of the Ethereum code. Solidity has however been said to be difficult for most developers.
The native coin is Ether (ETH) and functions much like regular cryptocurrencies. It is available in most if not all exchanges around the world.
Ethereum is arguably a more mature platform than most others in the market. Its decentralized nature adds to its strengths, especially that of being a fully functional platform.
The Ethereum Virtual Machine
The Ethereum Virtual Machine (EVM) is the engine of the platform and provides developers with one necessary component; the ability to create and execute smart contracts in a transparent and trustless environment.
It has seen Ethereum emerge as the top platform for most of the dApps, as well as allowing developers to launch their own ERC-20 tokens.
Furthermore, it allows the running of ICOs, some of which have been very successful (like EOS). Ethereum’s blockchain has become prevalent in the gaming and entertainment industry with hundreds of apps designed to run on it.
Some of the most exciting dApps on the platform are CryptoKitties, Ethermon, EtherCelebrities, and Etherbots.
However, Ethereum has faced some challenges over the years, especially about scalability and high network fees. Ethereum’s poor scalability means it’s continued to be slower, having a transaction throughput of just 15TPS.
This is too low and counts as a disadvantage to those who wish to build on the platform. Similarly, Ethereum’s fee is considerably higher compared to other networks and platforms.
Many of its competitors boast significantly lower fees, some of them offering zero-fee transactions. Additionally, every transaction on the network has to be paid for using ether, another drawback.
The Ethereum platform utilizes the Proof-of-Work (POW) consensus algorithm. However, an upcoming update called Casper will see it shift to Proof-of-Stake (PoS).
It also plans to implement “Sharding” and “Plasma,” possible solutions to its problem of scalability and therefore high fees.
The Ethereum ecosystem continues to grow and gain more extensive use. It has the biggest pool of developers, and more applications are being launched on it every other day.
If Sharding and Casper help it to scale to thousands of transactions, then it will likely continue to rule the dApps industry.
Enterprise Ethereum Alliance is also playing a vital role in pushing the blockchain towards adoption by mainstream businesses and institutions.
With over 500 members, the EEA could lead to the development of more industrial use cases for Ethereum.
High profile brands like JP Morgan &Chase, Microsoft Inc., Intel, Santander Bank, BBVA, ConsenSys, and Bank of Canada give Ethereum a lot of legitimacy as a great platform.
EOS is one of the top platforms that launched their mainnet recently. The EOSIO platform has been developed by Block.One, a company incorporated in the Cayman Islands.
The platform was first launched as an ERC-20 project in 2017 and had a year-long ICO that raised $4 billion. It began its mainnet in last month in June 2018.
Like Ethereum, EOS supports smart contracts and the creation of decentralized applications (dApps). More specifically, this blockchain 3.0 platform is designed to offer high scalability for the development of dApps and blockchains.
Other than that, it’s designed to provide additional functionalities like cloud storage, user accounts, and databases among others.
EOS is the native coin on the platform and can be traded on exchanges or used in facilitating transactions – you can send and receive funds from one wallet to another.
High scalability and throughput
One of EOS’ strongest points is the ability to handle a massive amount of transactions due to its high scalability.
Also attractive is it’s near-zero transaction fees. The network can handle 50,000+ transactions per second, compared to Ethereum’s current 15TPS.
It is this that makes it a serious challenger to Ethereum because it can easily be used to launch an infinite number of dApps and blockchains.
Easier to build dApps
The EOS platform makes the coding of dApps easier due to its use of regular code instead of machine code. It makes deployment and execution of smart contracts easier to read and inspect on the blockchain.
The EOS platform is designed to be used as it is, without any restrictions. It translates to potentially appealing to those who find using EVM a bit restrictive.
What could limit EOS?
However, one weakness could be its use of Delegated Proof of Stake (or DPoS). The system allows for the election of 21 validators called block producers.
They have been criticized before as the possible cause of centralization, especially after the mainnet launch confusion. Another limitation is that the network is still largely untested and could run into problems like the recent RAM failure.
So, until it stabilizes and finished products are launched, there is no guarantee about EOS. It basically means it must fulfill its potential first.
The potential for EOS to capture a huge part of the Ethereum market is still there. Problems with its network launch are slowly vanishing.
Therefore, should it hit the levels expected in scalability and throughput; it will probably become as big as Ethereum, if not more significant. Like EEA, Block.One remains one of the best avenues for future development of the EOS platform.
Through the launch of EOS Venture Capital fund (EOS VC), the blockchain developers have set aside $1 billion for developers who will use the platform.
There’s also an alliance with Mike Novogratz’s Galaxy Digital, which will boost further development.
The question of which platform and coin/token have the upper hand between Ethereum and EOS isn’t a straightforward one.
Actually, a lot will depend on issues surrounding the respective platforms. Ethereum needs to improve on its throughput, while EOS needs to address important governance issues and the escalating prices of RAM.
So, the better coin may come down to which finds solutions to these issues. Overall, scalability and fees may play a prominent role.
At the moment, Ethereum takes a slight lead because it has delivered to a certain degree.