Smart contracts are real game changers, but they are not all the same.
Agreements are at the foundation of many interactions everyday, whether it’s with your employer, your mortgage agreement, or maybe a guarantee on a new expensive TV. The use of smart contracts can mean that all of these agreements are coded and set up to automatically work — without any needed third-party verification.
Here are some of the top smart contract cryptocurrencies to watch, in no exact order.
1. Ethereum (ETH)
Ethereum was the first crypto to have smart contract functionality. Because of this, it powers most applications. According to dApps, around 80% of DeFi applications are on the Ethereum network.
Unfortunately, it is also a victim of its own successes. The network is very congested, has a big carbon footprint, and developers are complaining about high transaction fees. It is a bit like an old engine turning out fumes as it goes uphill. Ethereum also does not work well with other blockchains.
Eth2 — an upgrade which is planned to solve many of these issues — is coming soon, but it won’t be done until 2022 at the soonest.
2. Solana (SOL)
Solana is among the fastest cryptos out there right now, with a speed of 50,000 transactions each second (TPS). To put this in perspective, the Ethereum network works at 15 up to 45 TPS, although it will get faster after Eth2. The average fee with Solana is just a fraction of one cent.
It uses something known as “proof of history” to process a transaction faster. Without getting very technical, using timestamps inside its transaction records means it does not waste computing resources by checking transactions that were already processed.
Solana has around 400 projects running on its platform, including the very quickly growing stablecoin USDC. This coin runs on both Solana and Ethereum.
3. Polkadot (DOT)
Solana is known for its speed, but Polkadot is known for its interoperability (which means how well it works with other systems). This is the crypto that works by the coffee machine and talks to everybody else.
Polkadot uses parachains which run parallel to its main blockchain and help it to work on transactions faster. Smart contracts go on the parachains, and not the main blockchain.
Author: Scott Dowdy