Cryptocurrency, once envisioned as the democratisation of finance, has encountered a stark reality according to Clem Chambers, CEO of Online Blockchain. In a new Forbes article, Chambers delves into the looming crypto epic, dissecting Ethereum’s challenges and the emerging contenders vying for its crown. He explores the six chains on the hunt for Ethereum’s supremacy.
Crypto was supposed to revolutionise banking, promising nearly cost-free transactions. However, the reality is far from the dream. With DeFi’s rise, the expectation was for financial transactions to be infinitesimally cheap. Yet, sending ether on the Ethereum blockchain costs $3.50, stablecoin transactions incur an $8 fee, and moving wrapped Bitcoin from Ether to Polygon can reach around $100. The crypto dream of inclusivity for the unbanked now seems to be a preserve of the rich and liquid.
Ethereum, once hailed for instant transactions, now grapples with high costs, making it impractical for small transactions. The selling points are diminishing, leaving the question of Ethereum’s purpose beyond the dubious benefits of “self-custody.” What, then, is Ethereum good for in its current state?
Polygon: Positioned as a strong Ethereum contender, Polygon offers an attractive alternative with lower transaction costs.
Solana: Despite a checkered history, Solana’s crypto vibe and brand make it a noteworthy contender.
Optimism: With a market cap of $2 billion, Optimism is one of the players challenging Ethereum’s dominance.
Avalanche: Holding a market cap of $14 billion, Avalanche is positioned as a formidable Ethereum alternative.
Arbitrum: As the plucky outsider with a market cap of $1 billion, Arbitrum is a wildcard in the competition.
Binance Smart Chain: Considered a front-runner, Binance Smart Chain’s completion of the SEC (Securities and Exchange Commission) gauntlet and adherence to U.S. regulatory standards
“For me, the key Ethereum contenders are Polygon, Solana, Optimism, Avalanche, Arbitrum and Binance smart chain. While Bitcoin simply grinds along on its decentralized way, being the “it is what it is” blockchain, devoid of new ideas to fix the last lot of new ideas, these upstarts are jostling for Ethereum’s crown and with Ethereum in such a transaction cost malfunction, they all have a shot.”
Despite the challenges, Ethereum maintains a robust defensive moat, primarily due to its brand and the influential figure of Vitalik Buterin. Branding is crucial in the crypto space where memes shape perceptions. Ethereum’s brand strength, however, doesn’t entirely diminish the potential of the contenders.
Recent chart data reveals the recent price performance of each contender:
Ethereum: $264 billion
Binance: $40 billion
Solana: $31 billion
Avalanche: $14 billion
Polygon: $7 billion
Optimism: $2 billion
Arbitrum: $1 billion
This stark comparison underscores the stakes involved in the race for supremacy. The market cap distribution isn’t Pareto efficient, leaving room for one of the contenders to rise significantly.
Chambers shares his perspective on the contenders. In his words, “My head says Binance smart chain, my heart says Arbitrum and my gut says Solana (but we all know what your gut is connected to).”
The unpredictability of the crypto space keeps the door open for unexpected turns and surprises.
The contenders may have their eyes set on dethroning Ethereum, but even if that doesn’t happen, the crypto landscape promises a wild run. The coming weeks, according to Chambers, are poised to be another crypto epic. Whether Ethereum reaches $8,000 with Bitcoin at $120,000 or not, the second-tier players are expected to witness substantial percentage gains.
In summary, the crypto epic unfolds with Ethereum at the centre, facing challenges from formidable contenders. As the race intensifies, the crypto community braces for a period of excitement, uncertainty, and potential transformation.
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