How Powerful is the Elrond Blockchain
The crypto landscape is vast, with decentralized blockchains fighting for supremacy. With its increasing popularity and global adoption, it is clear to see that the blockchain revolution is well underway. But how do these blockchains compare, and what sets them apart? This article explores some of the best-known blockchains and why we think is on track to win the race for DeFi domination.
The most important innovation since the Internet
Blockchain technology is the latest buzzword in the world of business. Beyond generating hype, blockchain technology has been disrupting several industries and capturing the attention of business leaders worldwide.
Companies everywhere are now adopting blockchain and Metaverse technology to improve their operations. ‘Web3’ is also a hot topic in the financial world, with some experts claiming that it could be the most important innovation since the internet. For example, global financial services firm J.P. Morgan already uses blockchain technology to improve transactions between international banking institutions.
That being said, many people still don’t know about the advantages and disadvantages of different blockchains. To understand what sets Elrond apart from other blockchain networks, we will begin by exploring Bitcoin and Ethereum.
The first blockchain
A decentralized blockchain, Bitcoin, was launched by a person or group of people known as Satoshi Nakamoto in 2008. Bitcoin demonstrated how a digital currency could be sent from peer-to-peer without the need for a central bank or authority to operate the ledger. While it wasn’t the first proposed cryptocurrency, Bitcoin became very successful by proving it could resolve various real-world problems.
The Bitcoin blockchain works on the basis that each computer in the decentralized network maintains a copy of the entire public ledger that records every transaction. Any machine can also start mining, which is the process that maintains the network and creates new bitcoins. In the early days of bitcoin, it was possible to become a miner with just a basic computer. Nowadays, its popularity means that mining requires very powerful machines that are often linked together in massive arrays.
Critics have condemned Bitcoin in recent years for its enormous energy usage, as it currently consumes an estimated 150 terawatt-hours of electricity annually — more than the entire country of Argentina. In addition to its high energy consumption, bitcoin mining also produces large amounts of electronic waste or e-waste in the form of discarded electrical equipment.
Due to the environmental impact and other downsides such as extremely slow transaction speeds, some have argued that Bitcoin is not the blockchain of the future. With blockchain technology advancements, it is now possible to decrease energy consumption, increase transaction speeds, and reduce fees while making it easier than ever before for builders to contribute to the ecosystem.
Despite this, bitcoin is still regarded as the leading cryptocurrency. Sometimes referred to as “digital gold,” it accounts for 42% of the market capitalization of all cryptocurrencies. Still a favored option for investors and traders, bitcoin will be here for the foreseeable future.
Ethereum was conceived in 2013 by Vitalik Buterin and improves on Bitcoin in several ways. From an early stage, Ethereum’s scripting language featured smart contracts and decentralized applications (dApps) that can run independently without downtime, fraud, or interference.
With this new level of functionality, Ethereum made it possible for any developer to create and deploy dApps. Ethereum introduced a broad array of new use cases, including the concept of non-fungible tokens (NFTs). This led to a host of new projects launching on the Ethereum blockchain, including popular Metaverse projects such as Sandbox and Decentraland.
As its native token Ether is now the second-largest cryptocurrency, Ethereum is struggling with high fees and heavy congestion that affect its overall usability for all stakeholders. The blockchain is currently undergoing an upgrade to Eth 2.0 and is due to make significant progress this year. If ‘The Merge’ is delayed yet again, Ethereum could face a backlash as developers and creators begin to favor other blockchains.
The blockchain evolution
In recent years, the adoption of blockchain technology has exploded as businesses and individuals alike look to capitalize on its potential. Offering a unique blend of security and transparency, blockchain technology is perfect for a wide range of applications and use cases. Known as the Web3 movement, developers are now working to produce more intelligent, connected, and open websites and applications by utilizing decentralized blockchain technology.
Like any other popular innovation, blockchain has introduced a new wave of competition. With thousands of cryptocurrencies and hundreds of blockchains now competing, it’s almost impossible to conduct a comprehensive comparison. In the following sections, we will look at Cardano, Solana, and Polkadot — three of the most important blockchains other than Bitcoin and Ethereum.
Open to anyone in the world, decentralized finance doesn’t rely on intermediaries such as brokerages, exchanges, or banks.
Cardano is a third-generation, decentralized proof-of-stake (PoS) blockchain that aims to provide a more efficient alternative to proof-of-work (PoW) networks like Bitcoin. Proof-of-stake blockchains have greater potential for scalability and interoperability since they are more efficient than PoW networks and don’t require an energy-intensive mining process.
To achieve this efficiency, Cardano has combined novel technologies to provide security and sustainability for its dApp ecosystem. Unlike Elrond, which uses Adaptive State Sharding, Cardano offers off-chain solutions such as Hydra that use specialized channels for fast confirmation times, reducing latency and increasing throughput.
The Cardano team is currently working to enhance their network with new and improved features. With the scalability and interoperability to support real-world applications, Cardano intends to be a platform for large-scale, mission-critical dApps that will help underpin the future economy.
Solana is a layer-1 blockchain that supports smart contracts and hosts decentralized and scalable applications. The SOL token is native to Solana’s blockchain and acts as both an incentive for network security through staking and a means of transferring value.
Designed as a decentralized protocol, Solana incorporates the Proof-of-History (PoH) timing mechanism. Its hybrid consensus algorithm implements and facilitates the Proof-of-Stake protocol structure, resulting in a fast blockchain that can scale as the usage of the protocol increases — without relying on layer-2 systems or sharding. Additionally, this ensures that the network’s transaction fees are cheaper than those of other blockchains like Ethereum.
Solana has consistently been processing over 2,500 transactions per second (TPS), and their team claims it can process up to 50,000 TPS. Despite Solana’s ability to process a large number of transactions, some argue that its developers have given priority to scalability over security. Fueling critics, Solana recently suffered its fifth outage due to a consensus failure that required the involvement of its engineers and validators.
In order to strengthen the Solana network in the face of user growth and adoption, engineers are currently working on three major upgrades that will help improve network performance and broaden the blockchain’s use cases.
In its current configuration, the Elrond mainnet can handle 16,200 transactions per second, with 263,000 TPS achieved on the testnet. Unlike Solana, which is designed to scale naturally with bandwidth, SSD’s, and GPU cores, Elrond is scalable through Adaptive State Sharding that distributes data across multiple partitions.
Launched in 2020, Polkadot introduced several novel features and is among the newest major layer one blockchains. Polkadot uses so-called parachains to enable cross-blockchain transfers by operating both a main network and a user-created network. Parachains are customizable with several different use cases. Because parachains feed into the main blockchain, they benefit from the same level of security as the main chain.
An open-source sharded multichain protocol, Polkadot uses its multiple parachains to facilitate the cross-chain transfer of any data or asset type, which allows blockchains to be interoperable. This means transactions can be processed efficiently and in parallel with applications sharing information and functionality.
Polkadot aims to achieve high degrees of security and scalability through its model of uniting multiple blockchains. DOT, which serves as the protocol’s governance token, can be used for staking to secure the network or to connect new chains.
With several post-launch upgrades under development including governance improvements and the launch of parathreads, Polkadot continues to improve as it adds more functionality to its network.
Elrond, an extremely scalable, decentralized, and secure proof-of-stake blockchain, was launched in 2020. With low fees and rapid transaction speeds, the Elrond Network provides utility across a multitude of use cases that support dApp developers and enterprise solutions alike. Focused on cross-chain interoperability, developer support, and maximizing operational efficiency, Elrond seeks to revolutionize the digital economy. With transactional throughput on par with major internet platforms, Elrond provides a strong foundation for building next generation projects.
Elrond’s technology stack introduced two key innovations — Adaptive State Sharding and Secure Proof-of-Stake consensus. These features give the Elrond Network the linear scalability to achieve a remarkable level of network capacity. Because of its highly efficient technology, Elrond also became the first carbon-negative blockchain in line with The European Climate Policy. This new wave of innovation demonstrates that powerful Web3 technology and sustainability are not mutually exclusive.
The Maiar Exchange, launched in November 2021, is a set of powerful DeFi tools that serves as the economic engine for the Elrond ecosystem. On this decentralized exchange (DEX), traders can securely swap crypto assets with low slippage and minimal fees while liquidity providers can earn yields from transaction fees and staking incentives. Maiar also supports developers, as they can efficiently utilize its core building blocks and directly integrate with the DEX. With thousands of projects gearing up to launch on its cutting-edge blockchain, Elrond is on track to win the race for DeFi domination.
The future of DeFi and Web3
With a variety of innovative features, you can see why Elrond is among the most powerful blockchains. Solving the issues of scalability, security, and speed is essential for achieving mass adoption among developers and investors worldwide. As the Elrond team seeks to onboard one billion new users to Web3, their intuitive user experience will also prove critical for community growth. With its high-tech digital infrastructure, Elrond’s blockchain will provide the trustworthy foundation for the next generation of the Internet.
Although the foundation for success is already in place, the team at Elrond continues to innovate and improve their network. To do this, they have built a hardcore team of entrepreneurs, engineers, and researchers with the knowledge to literally build rockets. Firm believers in transparency, the team at Elrond goes above and beyond to make all news and updates accessible to the community.
Nevertheless, the future of DeFi and Web3 won’t necessarily rely on a single blockchain. Elrond, Ethereum, Cardano, Solana and Polkadot could all coexist, with cross-chain interoperability being the key to an ecosystem of interconnected blockchains. Elrond has already implemented measures for cross-chain interoperability with the introduction of the Ad Astra Portal, a bridge from Elrond to Ethereum and beyond.
Orchestrating the multi-chain foundation of blockchain interoperability will be essential for the future growth of this technology, helping to create opportunities for innovation and accelerating the adoption of Web3 technologies globally.
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