When Ethereum first saw the light of day in July 2015, his vision was bold. It was nothing less than developing the Internet landscape from a traditional client-server model to a distributed system. In particular, smart-contracts, the execution of interactions depending on certain conditions without a middleman, could revolutionize the economic world as we know it. Applications that run in a traditional client-server environment are usually reliable and largely secure, but they are always at the mercy of content providers. When an APP is offered in the Google Playstore, it is checked for security by the operator of that app store, and only those apps that meet certain requirements will continue to be offered. In the end, this also influences the end customer's choice. On top of that, these Appstore operators' own developments mean enormous market power.
The idea of Ethereum is to manage applications decentrally with the help of a blockchain, so that there is no higher authority that can decide on its own about the well and woe. Thousands of computers worldwide act as Ethereum virtual machines, and each of these computers has an exact copy of the blockchain stored. In this way, it doesn't matter whether Yang's computer in Shenzhen or Evgeny's in Moscow has to be shut down for maintenance, because the other computers all continue to run independently. Anyone with programming skills can develop and publish such applications, or Dapps for short. The use of the blockchain is basically free of charge, but there are costs for the publication of Dapps as well as for transactions made on the blockchain. These costs arise as gas, and are payed in Ether.
In the case of Ethereum, the miner have to ensure that transactions are verified and confirmed. A miner has the task of solving a specific arithmetical problem. In the case of classical mining, he needs a computer with graphics cards to solve this arithmetic problem. The miners compete with each other because there is a reward for solving the problem in the form of Ether, the native currency of the Ethereum network. The more graphics cards and the faster these cards are, the higher the chance of a miner to solve the task before all the others. This has led to the emergence of huge farms around the world that consume insane amounts of electricity and thus directly contribute to the release of a great amount of climate-damaging exhaust gases into the atmosphere through the practice of burning fossil fuels to generate electricity, which is common in many countries.
The gas mechanism used in the Ethereum network has a few peculiarities. On the one hand, anyone who wants to send a transaction can determine how much gas they want to pay. This has a direct impact on the speed of the transaction, as the miners prefer blocks with higher gas prices. Now when the network is busy, transactions may take hours if the gas price is too low. This leads to a chain reaction, as a result of which the gas price rises higher and higher and transactions become more and more expensive. At the same time, however, the throughput of transactions naturally decreases even with higher capacity utilization, as the capacities are limited by the block time and the size of the block. And this ultimately leads to even higher gas prices.
Currently the block time in the Ethereum network is 13.6 seconds, and usually 5-6 confirmations are considered secure, at least for private transactions. The wait time for a transaction would therefore be 68 seconds at best. But in practice, crypto exchanges in particular must attach importance to security, which is why they have higher requirements for the number of confirmations. This leads to an even longer waiting time. While Ethereum's developers are planning some changes for the future, such as moving from proof-of-work to proof-of-stake, these are just plans at the moment.
In summary, there are some unsolved problems in the Ethereum network:
- High environmental damage through mining
- Costs for developers and users are not insignificant, growing with increasing network load.
- long waiting time for transactions
In recent years, some projects have tried to address these problems. Be it as an implementation, or as a completely new project within a fork. This article will now look at some of these forks, and how far one or more of these projects may technically compete with Ethereum in the future, or may already be more technically advanced. Only projects that actively develop and have not turned out to be fraud can be considered for this purpose.
Ethereum Classic (ETC)
Ethereum Classic was the first fork in Ethereum. In 2016, there was an incident in the Ethereum DAO system, stealing $50 million worth of Ether. However, these stolen Ethers were trapped in the Smart-Contract, which at the time stipulated that a withdrawal would only be possible after 28 days. During this time, the community experienced a split because most were in favor of a hardfork to reverse the changes, whereas the minority wanted to continue with the motto Code is Law. This split ultimately resulted in Ethereum, which represents the blockchain without the theft, and Ethereum Classic, which continues without change. Ethereum Classic is run, if you like, by a few idealists who, through their attitude and refusal to participate in Hardfork, will not be able to make the transition from PoW to PoS, for example. Therefore, in my opinion, this old Ethereum is worthless, and I advise against an investment.
Etherinc was a fork from Ethereum that took place in early 2018. With Etherinc it should be possible to make companies more efficient in their processes. In particular, they wanted to become faster by reducing the block time to 6 seconds. The consensus algorithm is the same as for Ethereum PoW. This fork has had very little attention from the beginning, and at present it looks like development work has been stopped. The last tweed of March states that the Einc protocol was made available to the public as open source. Medium looks similar. Since a possible end cannot be finally confirmed, Einc should be mentioned here at least briefly.
Ethereum Fog (ETF)
In December 2017, a fork produced Ethereum Fog. The project was started to offer Edge Computing. This is the provision of decentralized computing power. In the meantime, the homepage is no longer accessible, and trading on the exchanges has also declined to a minimum. It can be assumed that the project has been discontinued.
Ethereum Gold (ETG)
The sale of the first ETG Coins started in October 2017. The PoW algorithm known from Ethereum also served as consensus. The special thing about ETG was the link to the gold price. The developers wanted to create sustainable value. After some time, the project was transferred by swap to a new project called Ethereum Gold Project. At present, the development and trade has dropped to almost zero, so it can be assumed that the project will not be continued.
Since the use of the Ethereum network always entails costs for both developers and users, a few developers came together at the end of 2017 to realize an idea.
They wanted to create an improvement based on the previously so successful Ethereum Blockchain that would not only be faster and better with free real-time transactions, but also more accessible and usable for all people.
On January 19, 2019, Etherzero was created by a hardfork at Block 4936270. The new blockchain, based on the PoW consensus, was launched with 194,000,000 ETZ coins as premine. Half of them, 97,000,00 ETZ, were issued 1:1 to all holders of Ether as an Airdrop. The remaining 97.000.000 ETZ are owned by the team and serve to ensure further development. Employees, premises, fees for exchange listing as well as Airdrops have been paid with it so far. In June 2018, the team around CEO Gary Luo decided to switch from PoW to PoS for security reasons. Initially a hybrid model of PoW and PoS was planned, but this idea was rejected again. Instead, they decided on a completely new construction: MPoS, masternode proof-of-Stake.
The MPoS consensus combines the best of both worlds: Staking, an energy-saving process combined with the security and decentralisation of masternodes in conjunction with autonomous self-government by the community.
The new network was launched at the beginning of August 2018. Its special features are a block time of 1-2 seconds, which allow instant payment, its security mechanisms Power and Slow-Nodes-Judge. In addition, Etherzero is fully compatible with Ethereum, allowing developers to publish their smart contracts on the Etherzero Blockchain without much effort - free of charge.
Smart-Contracts: All Smart-Contracts developed for Ethereum can be started on the Etherzero Blockchain, free of charge. The advantage for developers and users is obvious: no test network is needed, the Etherzero main network is free. Every user can send transactions for free as long as his account has at least 0.01 ETZ. The network supports turing-complete and is based on web3 and Solidity.
Security: Power is a sophisticated and innovative protection mechanism that prevents network attacks from the inside by limiting transactions at short intervals. Accounts with zero balance cannot send transactions.
The Slow-Nodes-Judge automatically sorts out slow masternodes to ensure network stability and security.
Accessibility: The Etherzero team has modified the gas mechanism so that it is basically present and in use, but the gas is not charged. This makes the publishing of Smart-Contracts free, and all related interactions (transactions) as well.
Speed: Thanks to the block time of 1-2 seconds, the blockchain already achieves a high throughput of more than 1400 TPS. This value will increase in the future due to developments in the area of Sharding and DAG (Directed Acyclic Graph).
Autonomous governance: The autonomous governance of the Etherzero community is the backbone of the project. All operators of masternodes can influence the direction of the project, submit proposals, and vote. If a proposal is accepted, it is binding.
Masternodes: As the operator of a masternode, you not only help to secure and maintain the network, but you also enjoy the privilege of suggesting changes and voting on them. Thus everyone has the possibility to participate actively in the project Etherzero. With each masternode 20000 ETZ are taken out of circulation, which leads to a shortage and thus a price increase in the future. In return each masternode operator receives rewards in the form of ETZ for his participation.
Everything together forms a perfect basis to develop Dapps for daily use. Applications with high demands on speed, reliability and data throughput can benefit enormously from the advantages of the Etherzero Public Blockchain.
There have been several forks from Ethereum in the past. Some of them were created with fraud in mind, some of them had a real idea. Most of them seem to be discontinued. From my point of view the only serious project is Etherzero, which according to my analysis has the potential to replace Ethereum as a public blockchain platform in an improved version.