Many new tech projects are now using blockchain as the backbone for their products and services. There are already 140 ventures that have conducted their initial coin offerings (ICOs) this year. At this rate, 2018 is at a pace to exceed the number of ICOs and the total funding generated from 2017.
This explosion of blockchain projects has been made possible by the emergence of blockchain development platforms. Ethereum is widely considered to be the top platform by popularity with more than 1,200 decentralized applications or dapps using it. However, despite this level of support, Ethereum also has its knocks. Perhaps most notably, the platform has still yet to solve its scalability issues where a spike in one dapp’s transaction volume can bottleneck the rest of the network.
Because of this, several dapps are now considering heading out of Ethereum and moving on to other networks. For example, messaging platform Kik is set to move its Kin token out of Ethereum to the Stellar network. As such, developers who are embarking on their own blockchain projects are compelled to look at alternative platforms like Qtum, NEO and Lisk.
The market has also taken notice of the potential for these new platforms. Their respective tokens have risen hundreds of times their initial token sale prices. NEO saw its initial value increase more than 400 times at its peak. Qtum’s token price just recently rose 42 percent after crypto exchange Binance added more trading pairs for it. By offering better performance and other advantages, these platforms appear primed to attract more developers.
Decentralization and Distribution
Decentralization has become core to many blockchain development requirements today. There is a growing negative attitude among consumers towards centralized approaches, which hasn't been made better with the latest Facebook data scandal. Many users now criticize the control exerted by centralized authorities like Google and Facebook over their platforms’ policies and their user’s data. For developers, having applications and data stored in a centralized server or location also makes them susceptible to attacks and breaches.
Through blockchain’s decentralization, there is no single entity that could change the rules of the platform when it so chooses. Data is also distributed among peers running nodes. This essentially eliminates the single point of failure that attackers seek to exploit. Projects that seek to provide true decentralization must use a platform that is structured as such. Qtum, for instance, has over 3,400 nodes supporting its blockchain which are distributed across 50 countries.
Among the important considerations for developers in choosing a blockchain platform is performance. Both Bitcoin and Ethereum have shown their scalability issues which are largely due to their consensus algorithm. Both use proof-of-work (PoW) which depends on miners to work. This is also the reason why both networks have become reliant on power-guzzling mining operations.
In comparison, Qtum uses proof-of-stake (PoS) to achieve consensus. PoS results in faster block times. This combined with the implementation of Segwit and a 2MB blocksize allows it to accommodate more transactions than Bitcoin and Ethereum. Lisk uses a variation of PoS called delegated proof-of-stake (DPoS) which achieves 10-second blocktimes. NEO uses delegated Byzantine Fault Tolerance (dBFT) for consensus which also allows it to have process more transactions a second compared to Ethereum.
Developers are also now looking at added features and functionalities from their platform of choice. Given the speed needed to deliver projects, developers need tools to help them accelerate their work. Starting from scratch or reinventing the wheel is just highly impractical. This gives premium to the tools and functionalities that platforms make available to developers.
Qtum offers tools that help developers work with a standardized workflow for smart contracts. By providing cross-platform and backward compatibility with Ethereum smart contracts and Bitcoin gateways, developers will be able to tap into other existing projects without having to worry about interoperability. NEO also has other features in the pipeline including digital asset management and a digital identity feature that could help dapps offer better security.
Primed for Growth
Ethereum isn’t oblivious to its lack of scalability. It has already committed to implementing a PoS consensus algorithm and sharding to finally put scalability concerns to bed. However, while the space waits for these measures to happen, many developers are already prepared to work on other development platforms instead. With advantages like scalability and lower barriers to entry, these platforms are poised to become viable choices for dapp developers.
Jim Hoffer is founder and managing director at Hoffer Financial Consulting. Follow him on Twitter.
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