Bitcoin is completely in a class of its own when blockchains are concerned. Numerous attempts have been made to create alternatives to it since its emergence about six or so years ago, but all these have failed to attain the level of success envisaged.
So what has helped Bitcoin blockchain to outdo many rivals over the years? This was the focus of a recent article prepared for the American Banker by Chris DeRose, the community director of the Counterparty Foundation. DeRose focused on how three top rivals in forms of Ethereum, Ripple Labs and Eris Industries compare to Bitcoin blockchain.
Bitcoin vs. Ethereum
Ethereum showed real intent that it was ready to challenge the Bitcoin blockchain when it managed to raise an impressive $18.4 million through crowdfunding. But it is the features that it promises to bring to the table that makes it a worthy top contender. Ethereum aims to do more than Bitcoin, whose primary focus has been on providing very basic services required to facilitate value transfer and ensuring transactions remain immutable. In fact, it has already proposed features beyond what it initially had in mind, with these including a web browser, decentralized file storage and anonymous instant messaging. Its “smarts contracts” feature is especially notable, enabling seamless execution of contract terms.
However, Ethereum’s enormous feature list is proving to be its greatest undoing. The demand on the blockchain by these features has been great and the problem is worsened by a very fast settlement heartbeat, or “block time.” These have caused Ethereum to moderate its ambitions with time. However, a good number of its notable features, including smart contracts, have surfaced on the Bitcoin network.
Bitcoin vs. Ripple Labs
To start with, it is debatable if Ripple Labs can even be described as a blockchain. This is given the fact that the venture-backed platform subjects transactions to moderation and management. This project moves more toward centralization and eliminates need for traditional mining. Five servers controlled by Ripple maintain the network, compared to Bitcoin’s decentralized ecosystem involving many thousands of servers.
The Ripple arrangement aims to check settlement risks and attract users. While centralization could help Ripple Labs compete with payment-clearing systems, such as ACH and Swift, in the future, it exposes users to censorship and fund confiscation. For now, users will have to use a Bitcoin gateway when looking to make a transaction considered risky. Also, the Bitcoin community has already added several of Ripple’s features to its own network.
Bitcoin vs. Eris Industries
The Eris project aims to make tools and software libraries available to users to help them design their own blockchain. However, it sees a blockchain being no more important than a data-notarization tool and value routing as unessential. The approach totally eliminates reward for mining, making the process of mining on a blockchain totally unattractive. Immutability is also not a feature of the Eris approach, which is seemingly aimed at companies which do not consider value settlement guarantees amongst suspicious parties as economically efficient.
From the foregoing, it is not very surprising seeing Bitcoin blockchain still holding all the aces. It is evident that a blockchain has to be a public resource to flourish. Future alternative blockchains seemingly face an uphill task usurping Bitcoin, especially given that critics of the latter have been getting less vocal over time.