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In a free and unregulated market, it is only natural that competition should emerge, and free market proponents believe that this competition helps propel platforms, while offering investors multiple investment options. .
Ethereum, which is widely regarded as one of the most popular open source platforms, has long been considered the best in the industry, but increasing competition from blockchain competitor projects, such as EOS, Tron and NEO, could reduce the market share of ETH making it lose its appeal.
Ethereum (ETH) is facing pressure
Ethereum, like most crypto-currencies, has had an unfavorable price trend over the past year, while the ETH has dropped to around $ 90, compared with 1400. Ethereum is currently trading against its lows at current price of $ 140.
Although ETH was (mainly) able to maintain its position as the second-largest cryptocurrency by market capitalization, it did not recover nearly as many losses as competing blockchain platforms.
EOS, which is widely regarded as a competitor of ETH, is currently trading at $ 4.32, up significantly from its 2018 lows of less than $ 1.70. Tron (TRX) also recorded a slightly better recovery from its historic lows than Ethereum, although it did not grow as much as the EOS. TRX is currently trading at $ 0.024, up from its low point of 2018 of $ 0.011.
Travis Kling, founder of the Ikigai cryptocurrency hedge fund, spoke to Bloomberg's Etherberg, explaining that an investment in cryptocurrency is a gamble on the future adoption of its network.
"Owning Ethereum today is an option to buy on what you think the network is going to be in the future," he said.
ETH competitors incur higher adoption rates
Although it seems that Ethereum is still favored by most investors in cryptocurrency – since it has the largest market capitalization of all crypto-currencies – with the exception of Bitcoin, its competitors quickly hire more developers and decentralized applications (dapps) that could eventually allow them to spend Ethereum.
In its report, Bloomberg notes that "only 28% of users of dapps were on the Ethereum network in January, compared to 100% a year ago." The report also indicates that these lost users have mainly migrated to EOS, which currently accounts for 48 percent of users, and Tron, which accounts for 24 percent of users.
Kling talked about the migration of developers, users, and users of the Ethereum channel chain, pointing out that it could be "detrimental" to the price of crypto.
"As Ethereum's competing projects are popular with developers, users, with apps built at the top of the platform, which will be viewed by the market as detrimental to the overall value of the game." Ethereum and may have a negative impact on prices. on Ether, "he explained.
Patrick Barile, director of operations at DappRader, explains that other protocols offer significantly faster transaction speeds, which improves the user experience.
"The reason they have been so adopted, these new protocols, is that they offer a much faster speed, transactions per second … The number of transactions they can perform is considerably higher. That means if you have a dapp, you have a much better user experience, "said Barile.
Only time will tell if Ethereum will eventually win the dapps and the developers, but no matter, the growing number of competitors will probably push Ethereum to improve its platform.
Selected image of Shutterstock.
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