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Ethereum and Polkadot are two of the most talked-about blockchain platforms today. Both offer unique features that have made them very popular with developers and investors. But which one is better?

In this article, we will compare Polkadot vs Ethereum and explore the pros and cons of each platform. We will also discuss the future of both platforms and see which one has the potential to become a leading blockchain platform.

What Is Polkadot?

Polkadot aims to connect different blockchains into a single network by using a shared heterogeneous multi-chain architecture.

Polkadot is very explicit about what it wants to achieve. It tries to address two of the most common issues faced by Ethereum users: scalability and who has responsibility (which refers to how communities manage protocol upgrades).

Polkadot Use-Cases

One of the key and primary use-cases surrounding the Polkadot (DOT) network is enabling interoperability between chains, regardless of their status as private or public chains. Interoperability plays a major role in this aspect because it lets diverse chains perform any arbitrary messaging, including value as well.

Polkadot utilizes a network of heterogeneous blockchains known as parachains and parathreads, which connect to and are secured by the Polkadot Relay Chain.

Polkadot is designed to operate two main types of blockchains, including the main network known as the relay chain, where the transactions are permanent. Then there are user-created networks, known as parachains.

Some projects that are connected with Polkadot include:

  • Kusama
  • Moonbeam
  • PolkaFoundry
  • and many others

However, this network’s main use-case and goal are to provide interoperability.

Solana vs Ethereum

What Is Ethereum?

Ethereum is a programmable blockchain. It can support any arbitrary computation, allowing it to be used for a wide variety of purposes. Smart contracts are programs that execute as intended, with no possibility of fraud or third-party involvement, on the Ethereum platform.

The Ethereum blockchain can include voting, domain name registration, financial exchanges, crowdfunding, decentralized applications, file storage, and much more. The possibilities are endless. The Ethereum network runs on a cryptocurrency called Ether. Ether is used to pay for gas, which is the unit of computational work used to power transactions or programs on the Ethereum network. This makes it one of the most utilized blockchain networks.

One important thing to note is that Ethereum is not just a cryptocurrency like Bitcoin. Rather, Ethereum is a decentralized platform that can support any type of decentralized application or smart contract execution. The Ethereum platform is powered by a network of nodes that each maintain a copy of the Ethereum blockchain. The Ethereum blockchain is a public ledger that records all Ethereum transactions. The Ethereum blockchain is also responsible for processing and executing Ethereum deploying smart contracts.

Ethereum has two types of accounts: externally owned accounts (EOAs) and contract accounts. EOAs get controlled by private keys and can send transactions from themselves. Contract accounts get controlled by their contract code and can interact with others. Contract accounts can also create new contracts, which is how smart contracts work on Ethereum.

Ethereum Use-Cases and Smart Contract Support

It is important to note that Ethereum is the second-largest cryptocurrency and blockchain project in market capitalization. As such, you will find that most developments have been made on top of it.

Ethereum was one of the first blockchains to enable smart contract functionality, and as a direct result of this, we saw an increase in the development of decentralized applications (dApps), non-fungible tokens (NFTs) as well as many other products and services that paved the way for Decentralized Finance (DeFi).

With Ethereum smart contracts as well as the Ethereum Virtual Machine (EVM), alongside its native coding language known as Solidity, Ethereum has undergone numerous use cases.

Ethereum gets used for Decentralized Finance, payments, storing data, initial coin offerings (ICOs), and non-fungible tokens (NFTs).

However, its utility does not end there, as this network gets utilized in numerous other ways.

Due to the vast popularity and the Ethereum network’s size, numerous Layer-2 networks or solutions developed on top of it.

They are their separate networks; however, they get connected to the security of the Ethereum Layer-1 blockchain.

Some of the most popular Ethereum dApps currently include:

  • Oasis App
  • MakerDAO
  • MetaMask Swap
  • Uniswap
  • Shiba Swap
  • 1inch Network
  • and others
polkadot vs ethereum

The Key Difference Between Polkadot Vs Ethereum

Polkadot has a multi-chain architecture, while Ethereum has a single blockchain. Polkadot can connect different blockchains together, while Ethereum cannot.

Polkadot also has a sharded Scalability: Polkadot can theoretically scale to millions of transactions per second by using a sharded architecture. Ethereum can only scale to around 15 transactions per second with its current design. Polkadot has also been dubbed as one of the Ethereum Killers, as both Ethereum and Polkadot have similarities.

Architecture

Ethereum 2.0 features shards and blockchains with the Ethereum Wasm interface and the main chain called Beacon Chain. Side chains get used to talking to chains that are not part of the finality protocol of the platform.

Polkadot’s core is the Relay Chain, which is in charge of coordinating the parachains that get connected to it.

So that it can still work as a whole, the Relay Chain doesn’t support smart contracts. Instead, this ability goes to parachains. Each parachain is its blockchain that can run its consensus algorithm, tokens, and other things.

Parachains are not limited to a single interface, like Ethereum Wasm, like Ethereum 2.0 is. On the contrary, they can make their interfaces and logic.

Consensus Algorithm

Both Ethereum 2.0 and Polkadot use a hybrid consensus model. In this case, making blocks and ensuring they are all made have their own protocols. There are some big differences between the platforms, like how long it takes to reach finality and how many validators are in each shard.

If Ethereum 2.0 is to give strong guarantees of correctness, it will need a lot of validators per shard. Polkadot solves this problem by letting validators give each validator in the system an erasure code. So, anyone, not just the validators of the shard, can put a parachain block back together and test it.

This means Polkadot can give strong validity guarantees with fewer validators per shard.

Staking Mechanics

Ethereum 2.0 is a “proof-of-stake” network. For each round of validation, 32 blocks are grouped. Epochs are another name for these groups of files. Each epoch only pays validators once (approximately 6.5 minutes).

The Beacon Chain gives each stakeholder a committee and shard block at random during the validation process.

A large group of validators makes sure that the platform is valid. To run the network, you need at least 111 validators per shard.

To finish all shards in one epoch, you need 256 validators per shard. Before the Ethereum 2.0 Beacon Chain can go live, at least 26,384 validators must put at least 32 ETH on the line.

Nominated Proof-of-Stake (NPoS) Explained

Polkadot uses Nominated Proof-of-Stake (NPoS) to choose validators. Its main goal is to give everyone an equal chance. This is a technique that Polkadot uses to guarantee proportional justified representation. It makes sure that validators are assigned places depending on the number of tallying they have received.

People with NPoS are a smaller group from which Polkadot can choose validators. For each parachain, Polkadot needs about ten validators in the network. There is also a program called “One Thousand Validators” to improve decentralization.

Sharding

When comparing Ethereum and Polkadot, the main idea that they both have in common is sharding, which allows for more scalability and more transactions per second. Vitalik Buterin’s Twitter feed says that sharding will lead to average network throughput of about 100,000 TPS. About 166,680 Polkadot transactions take place every second on average.

Even though both platforms use sharding, there are big differences in how they work. In Ethereum 2.0, every shard has the same function for moving between states (STF). It gives smart contracts a way for people to interact with them. As a result, contracts on one shard talk to contracts on other shards at different times. Through the Ethereum Wasm interface, smart contracts get run on the Ethereum Beacon Chain.

Governance

At the moment, the platform makes decisions through things like GitHub discussions and All Core Devs calls, which are not on the blockchain.

Polkadot uses governance on the blockchain.

The proposal can come from several places, such as the Technical Committee, the on-chain Council, or the public. Then, all of the proposals get put to a public vote, and the one that gets the most tokens wins.

Market Capitalization

As of this writing, Ethereum is one of the most popular platforms, with a market capitalization of more than $300 million. Many large investors have invested in Ethereum, indicating how strongly they believe in this chain.

Polkadot has a market cap of slightly more than $20 million at the time of writing. Despite being much lower than Ethereum, Polkadot outperforms many hyped tokens such as Dogecoin and Polygon.

Solana vs Ethereum

Bitcoin vs Ethereum vs Polkadot

We will now be comparing Bitcoin (BTC), Ethereum (ETH), and Polkadot (DOT).

Bitcoin (BTC): Establishing the Groundwork

Bitcoin (BTC) is the largest cryptocurrency and blockchain project when we look at it from the perspective of market capitalization as well as dominance within mainstream adoption.

It was one of the first cryptocurrencies to truly showcase the power of a blockchain network and how digital currencies could get utilized efficiently.

However, at its most basic level, Bitcoin (BTC) does not support smart contracts. Its most popular utility is found in the fact that it can get utilized to transfer value from Point A to Point B.

Of course, numerous projects have been developed to scale Bitcoin, and numerous upgrades to the network, such as SegWit and Taproot, have aimed at improving the overall network functionality. However, nothing has been as large in scope as Ethereum’s latest upgrade.

It is important to note that Bitcoin utilizes the Proof-of-Work (PoW) consensus mechanism, where miners contribute their hardware race towards finding a solution to a complex cryptographic puzzle.

Miners verify transactions and place them within blocks, after which the blocks get added to the previous block to form a chain. Every time a miner confirms a block, they get rewarded in the form of a BTC cryptocurrency. This is how the blockchain works, and it is fully transparent and, as such, can be viewed by anyone.

As such, in Bitcoin, the transaction per second is 3-7 within 10 minutes of the average crypto transaction’s confirmation time.

However, most of the utility of Bitcoin typically ends here, as, without programmable smart contracts, developers cannot really do too much with the network. Bitcoin can still be used in Decentralized Finance (DeFi). However, it needs to be wrapped, or in other words, converted into a cryptocurrency that follows a token standard compatible with DeFi, such as the ERC-20 token standard.

Because it is one of the largest blockchains and projects on a global scale, Bitcoin is considered to be one of the most decentralized networks.

Most of its nodes are spread globally, making it one of the few blockchains to be truly decentralized.

Ethereum Network (ETH): Smart Contracts To Victory

When we look at the Ethereum blockchain, it is the second largest cryptocurrency right under Bitcoin. However, its rise to fame and market dominance came to the fact that it was one of the first blockchains to essentially utilize smart contracts, which were then utilized to reshape the way we perceive and use blockchain technology.

Ethereum Virtual Machine (EVM) and Solidity

Ethereum shines due to its Solidity coding language and its Ethereum Virtual Machine (EVM); it proved to be the platform on top of which numerous DeFi products would be developed and provided a solid entry point within the crypto space for a lot of developers, as well as investors.

While Ethereum initially started off by utilizing the Proof-of-Work (PoW) consensus mechanism, it is currently being upgraded in the form of Ethereum 2.0.

Ethereum 2.0, otherwise known as “The Merge,” is a huge upgrade to the network.

Ethereum will move from the Proof-of-Work (PoW) mechanism and will instead move to a Proof-of-Stake (PoS) consensus mechanism.

This will remove the need for high energy consumption, or miners must pay thousands of dollars for hardware that can verify the transactions.

The Ethereum Blockchain Upgrade

With Ethereum 2.0, it is expected that Ethereum 2.0 will see blockchain become capable of scaling to 100,000 transactions per second (TPS) with a 12-second block time that will give it transaction finality in about 6 minutes. The current Proof-of-Work (PoW) system, however, can process 12.8 TPS. This could end Ethereum’s Achilles heel, which has been its throughput.

Polkadot (DOT): Relay Chain and Parachains

Polkadot is a nominated proof-of-stake (nPoS) blockchain, allowing Layer-1 applications to interoperate. The Polkadot network can process more than 1,000 transactions per second, making it the fastest blockchain out of the three listed here. This means that Polkadot can outperform Ethereum in this regard.

Polkadot is also the home of many cryptocurrency projects, and its interoperability gives each project much flexibility when dealing with cryptocurrencies and transactions. Polkadot is currently tenth in market capitalization, which means that it is still a project in the top ten list, making it one of the largest projects in the crypto space.

The native cryptocurrency utilized on Polkadot is the DOT token.

At the core of Polkadot, we have the relay chain, the blockchain responsible for coordinating the Polkadot ecosystem of connected parachains. Polkadot’s relay chain is its hub and site of parachain auctions, governance votes, and validation. This chain does not support smart contracts to keep its functionality generalized and geared towards governance.

Parachains are a different story, as each parachain is a blockchain that is capable of independently running its consensus algorithm, utilities, tokens, and anything else that it might need.

Because the relay chain does not support smart contracts, this is passed on to the parachains. Keep in mind that they are not bound to any rules, aside from the requirements that they are trustlessly validated.

The security in Polkadot works by allocating the task of validating to the relay chain, which makes it almost impossible for malicious actors to attack a parachain because they are protected by the economic security found in the large relay chain.

Conclusion

Polkadot and Ethereum are both impressive projects with a lot of potential. However, at this point, it is difficult to say which one will be more successful. Both platforms have their unique strengths and weaknesses that could make them more or less appealing to different audiences. It will be interesting to see how the two projects develop over time and which one emerges as the dominant player in the blockchain space.

Both of these blockchains have their space within the crypto sphere and solve specific issues that have been a part of the industry for years prior to their launch and prior to the innovations that they brought to the table. It is clear that both of these projects are competing to get to the top, and healthy competition is always nice to see within the crypto space, as it will incentivize the developers to consistently push out new products and services that are better than the previous ones.

While there is no clear winner in this regard, it is clear that they are a representation of solid offerings, which is nice to see within the crypto space.

Need help understanding Blockchain and NFTs? Read our terminology blog post.

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