Best smart contract platforms
In a previous article we highlighted the innovative disruption that smart contracts are bringing to FinTech, especially by replacing long and tedious processes thereby facilitating financial operations and administrative tasks, with no third parties involved.
In this article, we want to bring attention to the best smart contract platforms that are popular for use and trust across the globe and among different sectors, in particular finance and law. We will also try to answer the question "Which is the first smart contract platform?"
What is a smart contract platform?
A portal that supports smart contracts built on top of a blockchain is typically called a smart contract platform. It also needs to run on peer-to-peer and decentralized networks.
As the blockchain industry continues to grow, various smart contract platforms emerged. They range from each other and offer different functionalities. But before we hop to describing differences between them, let’s take a look at the criteria that should be considered when deciding on such a platform.
Core aspects when choosing a smart contract platform
The longer the platform has been active, the more will it offer a robust framework. This is mainly due to security reasons, in that a bigger network built over a longer time will be less prone to hacking risks. For a decentralized ecosystem, this is more important than anything else if it wants to provide a stable service.
The Number of Staff, Especially Developers
Most platforms will be open source, therefore it’s crucial to assess that there is a sufficient number of professionals that are keen to innovate. Most importantly though, they will need active developers to keep updating the system, spot bugs regularly, and simply work on developing the platform. It’s a sign that the advancement of the platform is healthy.
The User Experience
Blockchain technology is still in its infancy and a long way from being infallible. However, a solid smart contract platform should be easy to use without the need for particular technical skills. Many consider this factor to be the main barrier to large scale adoption, therefore a project must continue working on the development of a user-friendly service if it wants to win over a wide range of users.
Based on the above assumptions, currently, we present the list of smart contract platforms that are the most solid in the market.
5 best smart contract platforms:
Let’s find out more about each of them and explain why they appeared on the list.
What is Ethereum?
Ethereum was launched in 2014 by lead developer Vitalik Buterin. He rolled the idea that blockchains’ computing power could also be used to execute contracts and decentralized applications (dApps), in contrast with Bitcoin that was solely used as a value transfer system.
Pros of using Ethereum
Ethereum is the oldest and most robust of all smart contract platforms and allows developers to build decentralized apps through its Ether or ERC-20 tokens. Its Ethereum Virtual Machine (EVM) software executes all smart contracts, while Solidity is the relevant coding language. There are numerous aspects why this is the first smart contract platform on our list.
The most stable
The road to success has not been without hurdles, from the DAO hack of 2016 to the most known regular bugs. However, these issues have been essential in the development of the platform and its accrued stability.
The first to successfully deploy blockchain smart contracts, Ethereum has grown into a huge network of users that made the platform very popular, second only to Bitcoin.
Such a network of committed developers has managed to generate a reliable platform, where everyone wants to build a smart contract or a decentralized app.
Purposely designed for Ethereum, Solidity has clear standard guidelines on how to develop smart contracts and this has made it easier for developers to use it and build on it. The platform is used to facilitate smart contracts for everything from ICOs to online games by use of ERC-20 tokens
Cons of using Ethereum:
If on one side the platform’s growing number of users is a sign of success, on the other hand, it has become a worry for developers who think it may be slowing down the processing speed of contracts.
A network running at 100% capacity, other than being slow becomes also expensive. Notoriously, Ethereum’s fees are among the highest in the ecosystem and recently had a further spike due to the DeFi projects congesting the network. Transaction fees went up by approximately 600% with highs of $15.21 as decentralized finance keeps clogging the platform. This has led developers to go back to focusing on the currency version to resolve the problem instead of working full-time on the new 2.0 version expected in the new year.
Security threats and bugs have been a constant issue with Ethereum. In March 2018, a study by UK and Singapore researchers reported that approximately 34,000 smart contracts in Ethereum presented trace vulnerabilities. These would appear upon multiple invocations of a smart contract during its lifetime.
What is EOS?
EOS won the attention of the crypto community when it first started operating in 2017.
It sounded like the most promising of all the platforms thanks to its near-zero transaction fees topped by the ability to process numerous transactions within a second which could be crucially positive for the execution of smart contracts.
Pros of using EOS:
Fast and cheap
EOS claims that their DPoS (Delegated Proof-of-Stake) consensus mechanism allows the network to manage millions of transactions per second whereby entitling participants to access resources proportional to their stakes, and a computational power equivalent to the number of tokens they hold.
This simple system generates faster and cheaper transactions.
The C++ language used as a basis further helps improve scalability. The smart contracts are then executed in the blockchain through a coding language known as WebAssembly (WASM), which promotes faster execution of contracts.
Cons of using EOS
The system that makes EOS fast and cheap is also a cause of major concerns for its centralization and censorship resistance.
Block.One, is the company that originated the code behind EOS following a $4.1 billion ICO.
Fear of too much centralization of the company led EOS Tribe, one of the first participants in the launch, to step away from the project, in an attempt to warn about the issue. In essence, Eugene Luzgin of EOS Tribe warned that it was no longer possible to earn funds for maintaining the blockchain without the support of major EOS whales.
What is Algorand?
Algorand is considered to be the next-generation permissionless smart contract platform for the DeFi world. In June 2020, the organization announced its partnership with Circle to bring fiat-backed stablecoin capability to Algorand that has officially become the blockchain of USDC, the fastest-growing full-reserve US Dollar stablecoin.
Pros of using Algorand:
This platform aims to resolve all of the blockchain’s main issues: scalability, security, and decentralization.
The Clarity programming language that is being developed by its technologists offers clear predictability to a smart contract set-up to easily save money, time, and efforts.
It uses PPos (Pure Proof of Stake) consensus for mining which grants maximum speed, regardless of the number of transactions in a block, or people joining the network.
Cons of using Algorand:
Despite being very promising, the platform is just over one year old. This means it still has to develop its full capacity, therefore its security has yet to be thoroughly tested and proven.
What is Tezos?
Tezos was launched in 2017 after raising a record-breaking amount of $232M in funds. It is supposed to address key blockchain barriers like smart contract safety, long-term upgradability, and open participation.
Pros of using Tezos:
It is designed to provide the safety and code precision required for assets and other high-value use cases.Tezos smart contracts and decentralized applications cannot be censored or shut-down by third parties. The platform also offers formal verification which is a technique that improves security by mathematically verifying properties of programs like smart contracts. The technique can also help avoid costly bugs and their consequences.
Its native smart contract language, Michelson, is built for easy verification in aerospace, nuclear, and semiconductor industries, critically in need of formal, precise, and trustworthy agreement documentation.
Cons of using Tezos:
Unfortunately, smart contract platforms have been exposed to vulnerability from bugs and attacks leading to lost funds. Tezos is no different and at the moment it represents the only downside for this stable and popular platform.
What is Stellar?
Stellar is a payment network developed in 2014 by Jed McCaleb who also founded Ripple and Mt. Gox. For simple, smart contracts such as ICOs, it is the ideal platform to use. The smart contracts provided are non-Turing complete, this means it can only make simple functionalities for basic application andis not meant for more sophisticated contracts.
The key difference between Stellar and other smart contract platforms like Ethereum is the fact that it does not have a built-in smart contract language or a virtual machine to execute codes. Instead, it accomplishes its end result by combining a series of checks like multisignatures, batching, sequence, and time bounds which essentially end up limiting the platform scope.
Pros of using Stellar
Simple for Developers
This platform is by far the most cost-effective, time-saving, and simple solution to develop basic applications and tokens in all major programming languages. The platform is designed to facilitate low-cost remittance transactions across borders. IBM for example created World Wire, a global payment system built on the Stellar Network, and has since signed six international banks to issue stablecoins and use Stellar's XLM cryptocurrency.
Cons of using Stellar:
Limited Range of Application of the Platform
It is not suitable for more complex smart contract development.
It is primarily a money exchange and operates accordingly. More sophisticated smart contracts for Dapps, for example, are not suitable for this platform whereas simple smart contracts for ICOs would be ideal.