Ethereum: smart contracts and decentralized applications

September 29, 2021



Ethereum (ETH) is the second most important cryptocurrency on the market. It is a second generation blockchain and was born in late 2013. ETH has been one of the most successful cases in the cryptocurrency universe because it is a huge ecosystem that supports many other projects. ETH allows other tokens to take advantage of your blockchain, without having to build a blockchain from scratch. In this specific case, because it is a decentralized, public and open source blockchain that is simpler to program, allowing new functionalities, such as the creation of decentralized applications (dApps) and smart contracts (smart contracts).

One of the protocols used by ETH is the ERC-20 token and allows you to keep your blockchain as an operating system that runs different programs. It is an idea with practical applicability and there are numerous companies and projects looking for the ETH blockchain to be able to create, within that same ecosystem, their own tokens, in order to support their specific applications.

One of the critical aspects that is closely related to this theme is the total amount of ETH units: it is not limited. It is not known to what extent this cannot be a complex case in terms of infrastructure, compromising its scalability and for now, no limitation to its production is foreseen. Furthermore, ETH is an expensive ecosystem. Rates are high and this is starting to drive some investors away. Therefore, there have been more and more projects that intend to compete directly with ETH on the issue of smart contracts (smart contracts) and decentralized applications (dApps). Cardano (ADA), Polkadot (DOT), Solana (SOL), Avalanche (AVAX) and Terra Network (LUNA) are excellent technological alternatives. They promise security, scalability and low transaction costs. On the other hand, Polygon (MATIC) or Zilliqa (ZIL) are very valid options for those looking for “layer 2 solutions”. However, we will explore these projects in an upcoming blog post.

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