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Ethereum has long been the network that businesses flock to in times of blockchain need. But the network’s appeal could soon fade, according to a new report from Binance Research.
Binance, the world’s largest cryptocurrency exchange by volume, suggests that Ethereum’s scalability issues are giving several other programmable blockchains a chance to catch up and support their own token standards. While still the “go-to” blockchain for creating new tokens, those scalability issues have led to other problems, such as slow transaction times and high gas fees, according to the report.
So while Ethereum is still at the top of tokenization heap, Binance claims that the blockchain network is also overstuffed, and several competing blockchain systems—including its own Binance Chain, of course—are finding new ways to make their mark when it comes to gaming, compatibility, storage and ease of fee payments.
One such example is Tron, according to Binance, which famously helped launch two Tron-backed IEOs on its Launchpad platform. The Tron network aims to provide its users with more efficient distributed storage solutions, along with faster transactions so users can receive their funds within minutes rather than hours. Tron has also placed a big emphasis on blockchain gaming to drive user adoption.
In fact, Binance suggests that gaming could be a way for competing chains to distinguish themselves. Both EOS and Tron, the report claims, are stronger platforms for blockchain gaming at the moment, since more than 80 percent of the dapps on these networks are devoted to gambling and online casinos. On the Ethereum network, by comparison, only about 33 percent of the dapps are gaming related.
And while Ethereum currently boasts the highest number of tokens running on its own blockchain, Binance’s report classifies many of these tokens as “worthless,” given the issuance costs associated with deployment of their smart contracts incurred in gas fees. Consequently, the many “useless” tokens on the Ethereum blockchain result in spam that clouds up the network, the report claims.
Binance identifies several competing blockchains—such as EOS, Tron, NEO and Steemit—that also bear “worthless” tokens, though in smaller numbers compared to Ethereum. According to Binance’s research, it is, in fact, its own network—Binance Chain—that holds the highest number of positively-valued tokens after Ethereum. Shocker.
But the biggest problem with Ethereum, according to Binance’s report, is that its fees are too high—some transactions requiring gas fees exceeding 30 cents each—which can hinder greater network participation. In addition, users can’t conduct transactions unless they own ether. Sending funds in BTC, EOS or any other cryptocurrency can be done granted the sender can pay associated fees in ether. This leads to issues if the person is not an active Ethereum trader.
Some chains, such as TomoChain and (cough, cough) Binance Chain, are supposedly better options in this category, since they allow fees to be paid in any tradeable cryptocurrency.
What it all means is that the many blockchains contenders—present and future—are learning what to do and what not to do from Ethereum.
Ethereum remains the primary platform to build new tokens, and it’s still the second-largest cryptocurrency network by market cap. But the contenders are coming. And some might bring advantages that ultimately give them the edge.