Two equal chances to dominate the Web3 world

For most ordinary digital asset investors, the Ethereum 2.0 upgrade promises to be a game-changing event that will increase efficiency, reduce network costs and push the entire blockchain and crypto space closer to a Web3 reality.

Ethereum Has been struggling with lack of scalability and skyrocketing gas fees as it is the largest smart contract and Decentralized application Developing platforms that move to a more reliable and scalable proof-of-stake (PoS) blockchain would be a welcome reprieve.

What most ordinary investors don’t know, however, is that Polkadot’s Substrate platform has come a long way in developing a parallel decentralized internet infrastructure that many believe will eventually surpass Ethereum.

related: Introduction to Polkadot Architecture and Substrate Infrastructure

Since the release of the Polkadot white paper, its value as a bridge between the Ethereum ecosystem and the many possibilities that make up the Web3 internet experience has been at the forefront of Polkadot’s main selling points.

So, how exactly does Polkadot compare to Ethereum? How is Ethereum currently progressing towards a decentralized internet, and has Polkadot’s parachains become a viable threat to the dominant smart contract network? Below is a quick look at the technical details of the upcoming upgrade of the Polkadot ecosystem and Ethereum.

Two Paths to a Decentralized Internet

To understand the value Polkadot brings, we must first compare Polkadot’s Substrate and how it differs from what Ethereum currently offers.

It is undeniable that Ethereum was once considered a revolutionary technology and a popular platform for DApp development. However, scalability has been Ethereum’s Achilles heel over the years. With an estimated 1 million transactions per day, the Ethereum blockchain can only process 15 transactions per second (TPS), causing gas fees to fluctuate. Although this number will increase with the upgrade to Ethereum 2.0, it is still well below traditional centralized infrastructures like Visa, which can theoretically handle over 1,700 TPS.

Combined with its slow and congested network, Ethereum’s outdated consensus algorithm consumes a whopping 112.15 TWh per year, comparable to the electricity consumption of Portugal or the Netherlands.In short, Ethereum relies heavily on proof of work (PoW) algorithm that requires computationally intensive mining to add new blocks to the chain and confirm transactions.

related: Thoughts from Blockchain Developers: Proof-of-Work Blockchain Consensus

Ethereum 2.0 plans to address these issues by moving from PoW algorithms to more efficient ones PoS Algorithms that will eventually make Ethereum carbon neutral and achieve higher speeds.

Ethereum 2.0 will also utilize Fragmentation As a scalability solution, it breaks down the network into smaller parts that can process transactions in parallel. In theory, this would allow Ethereum to process an unlimited number of transactions per second, but in practice it would be limited by the number of shards created.

To date, the transition to Ethereum 2.0 is still underway, although the testnet is live.Developers of ambitious projects such as Ethereum co-founder frustrated by delays Gavin Wood Leaving Ethereum to build the Web3 Foundation and Parity Technologies. Parity Technologies and the Web3 Foundation are primarily focused on developing three main technologies: Parity Ethereum (also known as Serenity), Parity Substrate, and Polkadot.

Ultimately, the goal of these organizations and projects is to rapidly realize the Web3 vision.

their victories and defeats

As a core blockchain infrastructure company, Parity Technologies provides a variety of tools and software that enable developers to launch their blockchains quickly and easily. Parity Substrate is a toolkit for building custom blockchains from scratch, powering some of the most popular blockchains in the world, such as Polkadot, Kraken, and Chainlink.

Parity Ethereum, on the other hand, is software that runs Ethereum 2.0 clients such as Geth and Prysm. Parity’s main contribution to Polkadot is the Substrate framework, which is used to build custom blockchains or parachains on top of the Polkadot relay chain.

related: How Polkadot’s Parachain Auction Enables Decentralized Web3

Compared to Ethereum’s existing system and the upcoming sharding framework, Substrate is very modular and allows building custom blockchains. Developers can choose the parachain functionality they want based on the technical difficulty they can handle.

Here are some examples of how blockchains built with Substrate can function differently:

  • Zeitgeist owns prediction markets (similar to sports betting or betting on next week’s weather conditions) and uses them for on-chain governance.
  • KILT is a highly sophisticated Decentralized Identifier (DID) system whose goal is to bring identity to Web3.
  • Subsocial consists of two communicating Substrate blockchains, with social interactions built into the code (one palette for posting posts, another for comments, another for reactions, etc.) .

As such, Substrate allows users to assemble several palettes and launch their chains in less than an hour, which is much easier than starting from scratch. In the future, they may be far superior to Ethereum in accomplishing certain tasks. Additionally, they can still communicate easily using XCMP, a cross-consensus message format developed for Polkadot that allows interactions between networks sharing the same relay chain.

Substrate also provides developers with a library of modules that can be used to create compatibility between new and legacy chains, such as bitcoin and Ethereum. What’s more, you don’t even need to create a blockchain connected to Polkadot when using Substrate. In short, any developer can use Substrate to create a fork-free blockchain without hard forks and upgrades on any ecosystem other than Polkadot or Ethereum.

On the validator side, Polkadot uses the Nash Equilibrium staking game to incentivize validators to behave in ways that are best for the network as a whole. This differs from Ethereum’s current emphasis on rewarding miners, which often leads to centralization and high barriers to entry.

The Polkadot relay chain is also designed to be more scalable than Ethereum, capable of processing about 1,000 transactions per second compared to Ethereum’s mere 15.

The only vulnerability in Polkadot’s armor may be that Parity Technologies did have a major security flaw in its multi-signature wallet software in 2017, when over $30 million worth of ETH was stolen from multiple multi-signature wallets.

not confrontation, but complementarity

All in all, Polkadot is a complementary platform to Ethereum as both blockchain ecosystems are striving towards the same goal of providing a fully decentralized World Wide Web.

While Polkadot has tons of features and improved capacity, it’s still in its early stages, with only a handful of applications (Moonbeam and Moonriver) running on its network. At the same time, Ethereum remains a jack of all trades, with hundreds of thousands of developers and projects, giving it a significant advantage in adoption.

Both Polkadot and Ethereum serve different purposes and can coexist and complement each other in a decentralized future.

a glimpse into the future

Polkadot and Ethereum each have their pros and cons. Going forward, they may even coexist to provide a fully decentralized Web3.Developers can use Substrate to create decentralized social media platforms or video-sharing applications that integrate Ethereum’s ERC-20 Token Economy. The jury is still out on how the future of Polkadot and Ethereum will play out as more developers join to help accelerate the migration to the Web3 internet.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.

The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

by Mel is the developer of Subsocial, a social networking platform built to support the social networking of the future. These apps will have built-in monetization methods and censorship resistance, and users will own their content and social graph. Built using Substrate pallets, Subsocial is unique in the Dotsama ecosystem and designed for social interaction. These interactions don’t have to be dedicated social networks, as Subsocial can power apps like YouTube, Shopify, and even Airbnb.