Top Cryptocurrencies With Smart Contracts
The power of smart contracts is that all these automated agreements can be implemented via programming code and set to work without the need for the involvement of a third party. Made popular by Ethereum, smart contracts have led to the creation of decentralized applications (DApps). As a result of its successful adoption, several top cryptocurrencies are jostling for position to take a share of the market with positive implications for their value.
Smart contracts are one of the reasons blockchain technology is so powerful, but they have only played a small role in realizing their full potential. To achieve widespread adoption and impact our daily lives, these platforms must be optimized for speed and cost. They are key to the emergence of the decentralized financial industry.
The following are some of the best smart contract platforms to keep an eye on. The good news is that all these cryptocurrencies are available for purchase on the BigONE exchange.
Ethereum, which describes itself as “the world’s programmable blockchain”, is the first cryptocurrency to implement a smart contract feature. It supports most decentralized applications, with approximately 80% of the world’s DeFi applications. By the same token, due to its popularity Ethereum has been a victim of its own success. Severe network congestion, high carbon emissions, and high transaction costs have all plagued Ethereum. The idea is that Eth2 will upgrade some of these existing issues, but this will not take full effect until 2022. Other cryptocurrencies, such as Polygon (MATIC), offer a layer two solution based on the Ethereum network with the capability to process transactions quickly and cheaply.
Solana is the fastest cryptocurrency in the blockchain space right now, processing 50,000 transactions per second (TPS). In comparison, Ethereum’s operating speed ranges from 15 to 45 TPS. Although the intention is Ethereum’s speed will significantly accelerate after Eth2, there is still a significant speed difference to Solana. In addition, Solana costs a fraction of a cent on average. It uses an innovative “Proof of History” to process transactions faster and incorporates timestamps into transaction records when it is less technically required, which means it does not waste computing power checking what trades have been processed. Solana’s system supports approximately 400 projects, including the rapidly growing stablecoin USDC.
Despite the optimism its worth this cautionary point, in an article in The Ascent: “The big challenge for Solana’s long-term prospects is adoption. Ethereum may be slow and relatively costly, but developers are used to using its programming language. The power of Ethereum’s first-mover advantage can’t be underestimated — from Uber to Kellogg’s Corn Flakes, our daily lives are full of brands that capitalized on being first to market.”
Solana is known for its speed, while Polkadot is known for its interoperability with other blockchain platforms. This capability allows developers to create applications that used both the Ethereum and the Bitcoin, for example. Polkadot employs what’s called parachains, which are like mini blockchains which run in parallel with the main blockchain and can as a result process transactions more quickly. The smart contracts operate on parachains rather than the main blockchain. This technical design capability means should there be a surge of demand for a DApp, it won’t reduce the performance of other applications running on Polkadot.
The Ergo smart contract platform is distinct from other cryptocurrencies in that it does not charge transaction fees. Furthermore, by nature of its coding language, Ergoscript, Ergo can handle more complex contracts, which may attract the interest of the DeFi industry. Despite being described as combining “some of the best aspects of Bitcoin (BTC) with the best of Ethereum (ETH)” in an article in The Ascent, it has yet to be listed on many major cryptocurrency exchanges.
Algorand, like other new smart contract platforms, promises low cost, scalability, and speed without sacrificing security. Silvio Micali, an MIT professor, is the project’s driving force. Micali is an esteemed cryptographer and computer scientist who has won the Turing Prize. His top priority is to make smart contract language more accessible. Another thing that makes Algorand distinctive is its use of “pure-proof-of-stake” which is distinct from “proof of work,” where the blockchain is maintained through computers solving complicated math problems to generate new blocks and confirm transactions.
The advantage of Algorand smart contracts is that they can be written in a variety of programming languages by developers. Clarity, for example, aims to make it simple for users to understand the role of smart contracts; even if they are not experienced developers, they can use them.
While it’s debatable whether Cardano should be on this list because it only launched its smart contract functionality this month. However, this long-awaited upgrade news for investors has accelerated Cardano into the top three cryptocurrencies in terms of market capitalization. This is due to Cardano’s slow and steady development strategy, the blockchain being built in five phases toward achieving its goal developing the network into a decentralized application (DApp) development platform with a multi-asset ledger and verifiable smart contracts. Each step is peer-reviewed and thoroughly tested, which means that introducing features running for many years in other projects takes a long time. However, Cardano’s supporters believe that when it does launch, it will quickly catch up with the rest of the pack.
How future proof are these cryptocurrencies?
Regulation of the cryptocurrency market and technological innovation are two of the most significant risks that could impact on the success of these smart contract platforms. Increased regulation is gathering momentum in the US currently, may have an impact on DeFi and the entire cryptocurrency market. As Galaxy Digital CEO Mike Novogratz said recently: “I think it’s gonna be a really volatile six to 12 months in the regulatory sphere. Our community did a terrible job of educating Washington on what our industry was and what’s important.”
Furthermore, given the rapid pace of technological advancement, quantum computing merits our attention because it may jeopardize the security of various blockchains. Writing in Sifted Duncan Jones pointed out that, “Fault-tolerant quantum computers with enough processing power would be enough to unravel all the cryptography used in the modern internet. This threat is especially relevant when it comes to blockchain.” Quantum threatens the very fabric of the distributed ledger, with the ability to break everything the secure, decentralized, transparent networks stand for, Jones added.
Smart contracts are currently highly in demand for their ability to deliver on DeFi projects at scale most notably. However, we have only seen the tip of the iceberg regarding their potential, and more can be expected in the future. “We’re still in the early days of what smart contracts and DApps can be used for. But there are companies and even governments experimenting with their potential already. They are now used for a huge range of tasks, including digital identities, supply chain management, insurance, data storage, and a whole lot more,” concluded Matt Hussey and Daniel Phillips in a recent Decrypt article.