Ethereum (ETH) Vs. Polkadot (DOT): Which Is Better?

Ethereum (ETH) and Polkadot (DOT) can both be considered innovative cryptocurrencies. Ethereum kick-started the era of smart contracts back in 2015. Polkadot, on the other hand, took contracts a step further in 2020. Not only do they support smart contracts, but they make them available across multiple platforms.

The Polkadot ecosystem and the Ethereum Network are both fueled by their native coins, DOT and ETH respectively. You can invest in both, which will grant you special powers on the corresponding platform.

So, which one should you invest in? In this guide, we’ll spend time comparing Ethereum with Polkadot. This will help you make an investment decision.

 

History

Ethereum has a whole 5 years on Polkadot. So, understandably, Ethereum has a slightly richer history than Polkadot. Still, cryptocurrency is constantly evolving. Even the past few years of crypto history are definitely worth discussing.

Ethereum

The Ethereum whitepaper was issued in 2013. However, a revised Ethereum whitepaper was issued the year following. Throughout 2014, Vitalik “Vitaly” Buterin spread the word of his plans for a smart contract-enabling blockchain.

Speaking at several conferences, he managed to gain the necessary level of crowdfunding. Not only that, but he managed to recruit a team of experts to help him launch his vision. Upon launching in 2015, smart contracts changed the perception of crypto. Since then, Ethereum has steadily maintained its position as the second most popular crypto in the world.

Ethereum 2.0 has been in the pipeline for some time now. This totally new version of the platform will make it cheaper to send tokens and create smart contracts. Although it was meant to be here in full by 2022, the full version of Ethereum 2.0 is still to arrive.

Polkadot

The invention of Polkadot blockchains is directly linked to the invention of Ethereum. The crypto was founded by Dr. Gavin Wood, who was also one of the co-founders of Ethereum. While still working on Ethereum, Wood planned to create a crypto similar to Ethereum. The main difference was that this crypto would be based across multiple chains.

The Polkadot whitepaper was published in 2016. The following year, Wood founded the Web3 Foundation. This was a research unit focused on developing Wood’s plans for Polkadot, as well as fundraising to launch it. The first Polkadot token sale occurred in October 2017, which raised enough funds to successfully launch the smart contract blockchain networks.

After overcoming a hack, Polkadot finally started to roll out its platform throughout 2020. Phase 1 landed on May 27th of that year.

 

What Are They, And Why Were They Created?

Both Ethereum and Polkadot aim to make smart contract execution easier for investors. However, they achieve this aim by very different means. Let’s take a look at what Ethereum and Polkadot are, and why they were created.

Ethereum

In short, Ethereum was introduced to overtake Bitcoin. Bitcoin serves only as an online cryptocurrency. Despite the fact it is the original crypto, there’s nothing that really sets it apart from other basic online currencies.

Ethereum wanted to provide something more to crypto investors. While they still gave the world a new altcoin named Ether, the inventors of Ethereum also created the scripting language for smart contract functionality.

A smart contract is basically an action automaton that is powered by cryptocurrency. They are virtual agreements between two investors. Besides exchanging crypto, a contract can be set up for any number of purposes. Namely, Ethereum smart contracts can be used to create tokenized derivatives, liquidity pools, and synthetic assets.

Polkadot

Polkadot aims to also make the establishment of virtual contracts easier for investors. However, it uses multiple chains instead of just one to do so. In doing so, Polkadot hopes to modernize not just crypto, but the internet as a whole. It can be seen as a stepping stone toward Web3.

The Polkadot platform can handle multiple transactions at one time. It does this by operating multiple individual chains – currently, Polkadot has over 100 chains. With these, it can process 1,000,000 transactions per second. This is unlike any other cryptocurrency platform available.

The Polkadot Relay Chain is the central component of the Polkadot platform. From here, users can interact with other parachains. While contracts cannot be set up on the Relay Chain, they can be established and interacted with on the parachains.

 

Price History

Ethereum has obviously witnessed more cryptocurrency highs and lows than Polkadot has. However, both have interesting price histories that are worth reviewing.

Ethereum

Based on current CoinMarketCap information, Ethereum is worth $1,285.53. Despite remaining in second place behind Bitcoin (as of December 2022), Ethereum’s value has dropped significantly in the space of a year. In November of 2021, the coin was at its all-time peak. At this point, it reached a value of $4,829.57. This is almost four times its current value.

Between its launch in 2015 and 2021, Ethereum was making gradual ascendance – with some slumps throughout the years. However, Ethereum has never returned to its starting year value of $1.

Polkadot

The price to buy a single Polkadot today is $5.39. CoinGecko records show that the coin’s all-time low occurred on August 20th, 2020. The coin was priced at $2.70 at this time. These records also state that Polkadot achieved its all-time high on November 4th, 2021. At this point, single Polkadots were sold for $54.98.

So, while Polkadot has fallen significantly in value over the last year, it is still showing some promise for the future.

Market Cap

Market capitalization indicates how much a cryptocurrency is worth in total. Meaning, if you were to add together all the coins, you’d be able to calculate the market cap. The market cap is a good indicator of how much influence a cryptocurrency has over the market as a whole.

Market cap is arguably the most volatile statistic associated with cryptocurrency.

Ethereum

The total market capitalization of Ethereum is $156,899,759,934.

Polkadot

For Polkadot, the market cap is currently set at $6,364,851,229.

 

Daily Transactions

Sometimes, looking at price figures doesn’t convey enough. One of the best judgments of how popular a cryptocurrency is is to examine its daily transaction level.

Ethereum

According to Ychart’s Ethereum Transactions Per Day information page, Ethereum’s daily transaction figure is currently at 923,887.

Polkadot

Given that Polkadot completes transactions over multiple platforms, it’s difficult to determine the exact amount of daily transactions that the crypto witnesses. The system can handle 1,000,000 transactions per second. Whether or not it handles more than the Ethereum ecosystem is unconfirmed but definitely possible.

Block Size

The block size indicates a crypto’s transaction capacity.

Ethereum

Ethereum 1.0 has a block size of 4 MB. This suggests quite a high capacity for transactions, particularly given that Bitcoin’s block size is only 1 MB. With Ethereum 2.0, the platform’s block sizes will likely increase.

Polkadot

Polkadot does not have a block size the same way that other cryptocurrencies do. Instead, they have multiple chains in addition to the relay chain. For this reason, Polkadot can better facilitate transactions.

 

Similarities

• Both are decentralized applications: Both Polkadot and Ethereum use blockchain technology to put users fully in control. There is no centralized body involved in either.
• Both are for running smart contracts: Ethereum aims to make contract creation easier for crypto investors. As do Polkadot, although it uses slightly different means of delivering this service.
• Both use proof-of-stake: When deploying smart contracts and making transactions, both Polkadot and Ethereum use a proof-of-stake mechanism.

 

Differences

• Architecture: The architecture of Ethereum 1.0 and Polkadot is completely different. The original Ethereum consists only of a single chain. Polkadot, on the other hand, started with multiple chains. However, Ethereum 2.0 will support multiple chains – or ‘shards’, as Ethereum refer to them as.
• Transaction capacity: Polkadot has a much bigger transaction capacity than the Ethereum blockchain. While the Ethereum chain can only support 30 transactions per second, Polkadot can handle 1,000,000.

 

Risks

Ethereum

• ‘Ethereum killers‘, such as Polkadot, could soon take over as the second-place cryptocurrency. Given that Polkadot can provide a similar service to Ethereum and has a bigger capacity for it, it is a certified Ethereum killer.
• Ethereum 2.0 delays have plagued the platform for the past year now. Further delays to Ethereum 2.0 could put it at risk of falling in value. For example, it is the perfect opportunity for the likes of Polkadot to overtake Ethereum.

Polkadot

• Polkadot has a lot of competition, especially from the likes of Cosmos and Tezos.
• Polkadot has been hacked in the past.

 

Where to Buy

You can buy these cryptocurrencies on the following exchange platforms:

Ethereum

• Bitfinex
• Bitstamp
• Binance
• Coinbase
• Gemini
• Kraken
• Uniswap

Polkadot

• eToro
• Binance
• Coinbase
• Crypto.com
• Kraken

 

Exchanging Ethereum for Polkadot

As stated above, you’ll be able to exchange Ethereum for Polkadot on such leading coin exchange sites as Coinbase and Kraken.

 

Future Plans

With further delays to Ethereum 2.0., Polkadot has a good opportunity to at least gain some of the market share lost by Ethereum. Besides this, here’s what the future looks like for both platforms.

Ethereum

The immediate plan for Ethereum is to finalize launching Ethereum 2.0. The long-term goal of the platform is to maintain its second-place position.

Polkadot

Polkadot’s roadmap reveals that the platform plans to create XCMv3, which will allow cross-chain communication. Additionally, it wants to establish a Bridge Hub, Nomination Pools, and a Staking Dashboard.

Sources

https://messari.io/asset/polkadot/profile

https://www.purestake.com/blog/ethereum-vs-polkadot/

https://www.fxcm.com/markets/insights/ethereum-vs-polkadot-2/

https://coinmarketcap.com/currencies/ethereum/

https://cryptonews.com/news/polkadot-dot-unveils-new-roadmap-heres-everything-you-need-know.htm

https://www.benzinga.com/money/polkadot-vs-ethereum

https://academy.shrimpy.io/post/comparing-ethereum-vs-polkadot-blockchains

https://www.cryptopolitan.com/polkadot-vs-ethereum-which-is-better/

https://pixelplex.io/blog/ethereum-vs-polkadot-comparison.amp/

https://www.cryptoeq.io/corereports/polkadot-abridged