The Bitcoin runner-up is facing threats by other altcoins.

Ethereum, the world’s #2 cryptocurrency to date, began its digital journey in 2015, dubbed as “the next Bitcoin”, as the cryptocurrency offered more flexibility of usage options.

One of the core benefits for Ethereum was the chance for developers to build their own payment and transaction apps on Ethereum’s mainnet. But in the last year or so, projects like EOS and Stellar have been slowly aggregating their user-base, and now they possess enough power to be a real threat to ETH.

The co-founder of Multicoin Capital Management Kyle Samani explained in detail why Ethereum is shrinking in growth: “It’s simple – Ethereum had no alternative until EOS and Stellar showed up, almost a year ago.”, Samani stated.

And the ICO market, which was Ethereum’s biggest strength, also suffered from the crypto depression in the last quarter. This downward movement struck ICO issuers to seek and adopt other platforms for their fundraising activities.

On the other hand, with the development of DApps, in-game payments can now be migrated to other networks and protocols, which was Ethereum’s trademark. “The market reacts. If Ethereum’s competitors manage to create better platforms, better protocols, and better DApps, Ethereum will lose its price.”, said Travis King, the moving force behind Ikigai – L.A-based crypto hedge fund.

One of Ethereum’s core strengths – DApps, is now a place where the hegemon is losing its positions. In March 2018 Ethereum’s network hosted all of the DApps available. Now ETH is responsible for the mere 28% of the global DApps deployment. EOS is the king of DApps with 48-percent of active users, and Tron is third with 24%.

Patrick Barile, COO at DappRadar stated that the main reason newer networks to take over the DApp sector is that they provide better transaction speeds per second. The higher speed also would mean a higher volume of transactions and better user experience. According to Ethereum’s documentation, the average transaction speed is around 13 seconds, but sometimes it goes higher. Newer networks are bragging about their networks reaching transaction times of less than a second, which enhances the user experience in action games.

The co-founder of Ethereum Vitalik Buterin said that Ethereum has nothing to worry about, but the team is keeping an eye of the user-shift: “We can’t be mad or angry that Ethereum lost its momentum. After all, Ethereum was and still is, a first-generation smart contract. There has to be competition, that’s inevitable.”, Buterin stated.

The slow transaction speeds and high operational costs are what is keeping startup owners from issuing ICOs through Ethereum. Startups like Ternio launched their ICO on the Stellar blockchain at the end of 2018.
Ternio’s CEO Daniel Goldman described the ICO process with ordering food: “I am sure you don’t want to waste 20 minutes at a drive-by, just because the “network is overloaded”. For our business model, Stellar offered faster and cheaper ICO solution.”, Goldman stated.

And trouble for the ETH community is far from over. Binance, dubbed as the largest crypto exchange operator in the world, is planning to release in-house blockchain product, called Binance Chain. Binance’s CEO Zhao Changpeng said that when the protocol is ready, they will start migrating 10+ projects, currently utilizing Ethereum’s blockchain.

Ethereum, however, has a lot yet to offer. The STO and ICO market is still a considerable part of Ethereum’s blockchain, and Ethereum has a robust community which works side-by-side with developers to derive a better product. Developers are also working on increasing transaction speed with improvements coming in the next 5-6 months.

Ethereum EOS Stellar ICO eth Ethereum news ether Ethereum Price Dapps

Cookie Policy uses cookies to enhance your experience. By continuing without changing your settings, you agree to this use. To provide the best blockchain and crypto media on the web for free, we also request your permission for our partners and us to use cookies to personalize ads. To allow this, please click "OK". Need more info? Take a look at our Cookie Policy.

OK Cookie Policy