Bitcoin remains the dominant force in the cryptocurrency industry. Yet, Ethereum’s market share continues to creep higher over time. As the first smart contract platform, a huge swath of the industry depends on Ethereum’s ERC-20 standard. While other platforms squabble for second place, Ethereum allows momentum to carry them forward. They increasingly depend on their first-mover status to fend off competitors.
Yet, as transaction fees continue their meteoric rise and Ethereum lacks a near-term solution, they may soon find themselves losing influence. A similar situation arose at the tail end of 2017, resulting in prohibitive fees across the entire Ethereum ecosystem. This, in part, can be traced to the popularity of NFT-based CryptoKitties at the time. The same may well be true of the current issues, as the NFT marketplace explodes in popularity as major brands buy into the craze. The 2017/2018 high brought Layer-2 scaling solutions into existence. Yet Ethereum’s Layer-2, called Raiden, has lagged behind BTC’s Lightning Network.
The Rise of Ethereum Killers
The phenomenon of “Ethereum Killer” projects is not new. A variety of smart contract-based projects emerged in the immediate wake of Ethereum’s launch. While many boasted faster, more decentralized, or cheaper transactions, none managed to dethrone Ethereum. The same still holds true, for now, but users are entering their 4th straight year of high fees and slow transactions.
Projects like the Binance SmartChain overtook Ethereum’s ERC-20 standard, for better or worse. Solana and Cardano came into their own, rapidly approaching full platform status in the wake of the 2021 boom. If Ethereum remains fundamentally unusable for the average user, one of these competitors may seize the top smart contract spot.
How Can ETH Succeed?
Ethereum’s roadmap addresses exactly how they can succeed moving forward; by adopting a Proof-of-Stake algorithm. This plan has been in place for several years – but progress remains stunted and slow. If the plan holds true, we could see Ethereum 2.0 fully launch in December. Yet, another delay would be par for the course.
Ultimately, Ethereum is a not-for-profit led by a reliably benevolent development team. Their development skews to decentralization above transaction speed and fee metrics. This ensures that Ethereum remains free of undue influence from outside forces and makes them the most desirable winner of the smart contract war for the average user. Yet, to win they must tackle their fee issue – and soon.