In a market that is free and unregulated, it is inevitable that competitors will appear. These competitors often help to drive the original platforms forward, while also presenting investors with several investment options to select from.
One of the most prominent open-source blockchain platforms Ethereum (ETH) has long been seen as the leader in the industry. But with the emergence and growth of competitors such as EOS, Tron (TRX), and Neo, ETH’s market share and popularity have been adversely affected.
Over the past year, Ethereum has shown less than positive price action, going from highs of $1,400 to lows of $90. Even though ETH is the second largest cryptocurrency by market cap, it hasn’t been able to reclaim its losses unlike some of its competing blockchain platforms.
Currently trading at $4.50, EOS which is for the most part considered to be one of the most prominent Ethereum competitors, is now up substantially since 2018 where it was trading at $1.70. Tron (TRX) has also seen a significant increase from its lowest point of $0.011 to $0.024.
Founder of cryptocurrency hedge fund Ikigai, Travis Kling spoke about Ethereum to Bloomberg, stating : “Owning Ethereum today is a call option on what you think the network is going to be in the future.”
Although Ethereum still appears to be most preferred by the majority of cryptocurrency investors, noted by the second largest market cap behind Bitcoin – competitors are gaining further developers and decentralised applications (Dapps) that could see them surpass Ethereum. Bloomberg reported that “28% of Dapps users were on the Ethereum network as of January 2019, compared with 100% a year earlier.” Current 48% of users have migrated to EOS and 24% of users are now with Tron.
Kling stated “to the extent that Ethereum competitor projects get traction with developers, with users, with Dapps built on top of the platform, that will be viewed by the market as being detrimental to the overall value of Ethereum, and that can have a negative price impact on Ether.”
The chief operating officer at DappRader, Patrick Barlie, explained that there was a grand departure from Ethereum because other protocols have offered a considerably faster transaction speed which has given the user a much better experience.
“The reason why they got so much adoption, those new protocols, is that they offer considerably better speed, transactions per second. The volume of transactions they can do is considerably higher. That means if you have a Dapp, then you have a much better user experience,” Barile explained.
As the competition seems to grow, only time will tell if they give Ethereum the push it needs to improve its platform and deliver users the best Dapp experience.
Ethereum picture licensed via Shutterstock