Ethereum Could Lead As The Dominant Smart Contract, Analyst Says

Ethereum could lead the way as the most dominant smart contract blockchain and the only real ETH killer could end up being ETH 2.0 according to an analyst from Coinbase. We are reading more about it in today’s Ethereum latest news.

The second biggest blockchain network by market cap after BTC became the dominant venue for some major crypto innovations from decentralized finance to NFTs. The network’s popularity and high fees of transacting on it inspired the competitors to undercut ETH with lower costs and faster speeds. Speculation that the ETH killers or Laye r1 blockchain alternatives like Binance smart Chain and Solana could one day overtake ETH, sent the rival’s token prices surging.

But analysts at Coinbase Institutional that provide crypto research to bigger investors say that Ethereum could lead in the blockchain game. Ethereum’s layer 2 or companion system that works alongside the main blockchain to speed transactions at low costs could help to stave off competition from the other layers. The planned upgrades to ETH such as a full transition to a PoS blockchain from PoW could also help. As the ecosystem scalability improves, the users of Dapps could refrain from looking for faster and cheaper alternatives to Ethereum as the Coinbase analyst noted.

Coinbase institutional says it expects other chains to coexist in the crypto space in the near term but ETH could still keep up its throne:

“We do think that the culmination of [layer 2] scaling solutions combined with upgrades like the Beacon Chain merge and sharding could limit progress for alternative [layer 1s] in their current form.”

The Ethereum blockchain is about to transition to a proof of stake consensus model from the proof of work mechanism that Bitcoin uses. This will happen by merging the Beacon Chain as a beta version of the proof of stake blockchain which is now operating. The changes should reduce energy consumption and the computational power on Ethereum but this doesn’t guarantee faster transactions and low gas fees. The development will narrow layer 1 alternatives opportunities during the second half of 2022 as per the Coinbase analysts.

ZK-rollups bundle transactiosn together and execute them in the off-chain environment before sending the transaction data back to Ethereum. This scalability can also be achieved as the rollups gain more widespread use that could be the key to the success of ETH 2.0:

“This would be crucial for allowing the network to potentially scale to billions of users in the long run, processing tens of thousands of transactions per second.”