There are many blockchain projects out there; some offer unique, innovative features while others are just a copycat of the existing ones. Some blockchain systems allow for smart contract execution, staking, token generation, and many other advanced financial solutions.
In this article, we’re going to talk about some of the best blockchain systems for modern finance and how they work.
Before we start, consider the following terms:
Have you ever wondered about all these little words you keep running into for just one cryptocurrency or blockchain network? Are they all referring to one single concept or do they have completely different meanings?
If all this makes you feel confused, you’re not alone. Almost every crypto enthusiast has been there once or twice. So, let’s dig a little deeper and find out what these words really mean for the following blockchain networks.
As the home of modern finance, AKA Decentralized Finance (DeFi), Ethereum deserves to be on top of the list.
Ethereum is a blockchain network, like Bitcoin, but has so much more to offer. You can think of Ethereum as an operating system that runs on multiple systems. In this way, if one of the systems fails, other systems can keep up the work.
Developers can build their own applications on Ethereum and create their own tokens. Tokens on Ethereum are created based on a specific format, called Token Standard. ERC-20 is the most common token standard on Ethereum and many companies have used this standard to create their own tokens. For example, DIFX Token, the utility token of DIFX Exchange, uses the ERC-20 standard for most of its token supply.
Ether is the native currency of the Ethereum blockchain and is considered the second-largest cryptocurrency in the world by market value. You can use Ether to pay for transaction fees on Ethereum. ETH is the trading symbol of Ether.
As the main hub for decentralized finance and applications, Ethereum suffers from high transaction fees and delays. Cardano is a third-generation blockchain that aims to address Ethereum’s issues.
Cardano is based mainly on academic research and scientific work and its team has published 134 research papers so far to describe its underlying technology.
ADA is the native currency of Cardano and was designed to allow owners to participate in the network’s governance by voting on any upgrade proposals. ADA is the trading symbol of the ADA token.
Aside from scalability issues that Cardano is trying to address, blockchain technology suffers from another drawback: interoperability. Interoperability allows multiple independent blockchain networks to communicate with each other, something that is missing from the current blockchain industry.
By creating an “Internet of Blockchains”, Polkadot wants to solve this problem. Polkadot is a blockchain ecosystem that allows its users to create their own blockchains. Each blockchain is called a Parachain which is interoperable with other parachains within the ecosystem.
DOT token is the native currency of Polkadot. Token owners have full control over the protocol and have the right to vote on proposals. DOT is the trading symbol of the DOT token.
Like Cardano, Binance Smart Chain (BSC) is a blockchain system that was developed with Ethereum’s scalability problems in mind. It’s compatible with Ethereum’s underlying technology which means developers can run their Ethereum-based applications on Binance Smart Chain as well.
BEP-20 is the token standard on BSC which is built based on Ethereum’s ERC-20 standard. Many projects create their tokens on both Ethereum and BSC to provide more flexibility to their users. For example, DIFX has created its total supply (550M) on Ethereum and BSC blockchain.
Binance Coin is the native currency of BSC and is mainly used for paying transaction fees. BNB is the trading symbol of the Binance Coin.
It’s worth mentioning that BSC has recently changed its name to BNB Smart Chain.
Solana claims to be the fastest blockchain in the world and can manage 1000 transactions per second (TPS). To give you an idea of how fast it is, Ethereum can verify 13 transactions per second. This number drops to 5 for Bitcoin.
Solana tries to keep its transaction fees less than $0.01 for both developers and users which is a great advantage over Ethereum’s high fees. Developers can launch their own SPL tokens on Solana. SPL token is Solana’s version of Ethereum’s ERC-20 token standard.
SOL is the native token of Solana which is used within the ecosystem. SOL is the trading symbol of the SOL token.
Please note that trading cryptocurrencies may carry a high level of risk. It’s recommended to always seek professional advice before any investment and only investment the amount you can afford to lose.