In its simplest form, a smart contract is a program that verifies and enforces the execution of a contract in a blockchain network. The concept was first proposed by an American computer scientist who is also credited for inventing the first-ever digital currency – Bit Gold. However, the digital coin was never implemented partly due to the ‘double-spending’ problem.
With the advent of blockchain technology, smart contracts were given the ability to be immutable. This made it impossible for any party to copy or alter transactional data, thereby eliminating the double-spending problem as well as the need for intermediaries. As such, anonymous parties can engage in transparent and irreversible transactions without an external enforcement mechanism.
As the industry continues to mature, there have been multiple smart contract platforms available in the market, each with its own distinguishing features and functionalities. Although it provides diverse options to choose from, it can be overwhelming for new developers to choose the right platform on which to build their decentralized applications or exchanges.
What Makes a Good Smart Contract Platform?
Before we can look into some of the best smart contracts in the market right now, it helps to understand the criteria for choosing the right platform.
To most developers and investors, the value of the underlying token is taken to be the ultimate indicator of a good smart contract platform. But considering the volatility of a token’s value, the price may not be a good indicator after all. If you are interested in a platform that is set to have a long-term future, consider the following factors:
- Number of Developers
For a smart contract platform to thrive, it needs to have a good number of active developers in its ecosystem. The number of developers can be equated to the public’s interest. This also helps enhance collaboration in the platform, which is beneficial to new developers joining the community.
- User Experience
When choosing a smart contract platform for your dApp, you want one that will make it easy for users to interact with the application easily. Some platforms require users to not only create an account but also hold a specific number of the underlying token. For dApp users who are already familiar with blockchain technology, these requirements may not be a problem. But for the average user, such requirements are an entry barrier. The idea here is to choose a platform with fewer technical requirements in order to attract a wide range of users.
Best performing smart contract platforms.
Ethereum is one of the most popular smart contract platforms that allow developers to build decentralized apps through its Ether or ERC-20 tokens. The platform is powered by the Ethereum Virtual Machine (EVM), which is a software that executes all smart contracts. The platform functionality is further enhanced by its proprietary smart contract coding language, Solidity. This makes it easy for developers to not only set up contracts but also build blockchain apps.
What makes Ethereum even better is that it has clearly published rules on how to develop smart contracts on the platform. This has made it the most preferred smart contract platform by reputable developers and even by a sizable number of fortune 500 companies.
On the downside, however, Ethereum is vulnerable to security threats and bugs in its code. The platform has been quick to respond to these issues by designing new token iterations. But perhaps the biggest concern is the platform’s growing number of users. While this number has contributed to its large market cap, developers worry that it may work against the platform by slowing down the processing speed of contracts.
EOS is gradually winning the attention of the crypto community thanks to its near-zero transaction fees topped by the ability to process numerous transactions within a second. To achieve this, the platform works on an ownership model whereby you are entitled to resources proportional to your stake. This also means that your total computational power is equivalent to the number of tokens you hold. The higher the number of tokens, the higher the computational power, translating to fast transaction speed.
Contracts on the EOS platform are coded in the C++ language, which helps improve scalability. The contracts are then implemented into the blockchain in the form of a pre-compiled coding language known as WebAssembly (WASM), which promotes faster execution of contracts.
Given its architecture and functionality, EOS is suited for building industry scale dApps. If you were to build such applications on a platform such as Ethereum, running it would be overly expensive owing to the transaction fees charged on each function.
NEM is both a peer-to-peer cryptocurrency and a smart contract platform. It uses Java programming language, which makes it popular among many users as it is the most widely used language.
The platform mainly focuses on scalability and security, as evident from its recent updates. The platform can handle about 100 transactions in a second, which is much higher than Ethereum, which only processes a maximum of 15 transactions per second.
The only drawback of using NEM is that it employs smart contracts off the blockchain making it less decentralized. However, the platform offers better security, easier updates, and fast execution speed as a consolation prize.
NEO is a relatively new smart contract platform based in China. The platform uses a Proof-of-Stake consensus mechanism alongside the Byzantine Fault Tolerance algorithm – which uses less computing power, making the platform more affordable than Ethereum.
For simple, smart contracts such as ICOs, Stellar is the ideal platform to use. It may not be as straightforward as NEM, but it’s more user-friendly than Ethereum.
The platform has stood the test of time having been one of the oldest platforms in the industry designed to facilitate low-cost remittance transactions across borders. Its future was further cemented when the platform partnered with IBM and KlickEx, which have also contributed to its improved infrastructure.
Stellar smart contracts can be written in all major programming languages, including those that the community provides an API for. The contracts are interconnected and executed using various constraints such as batching, multi-signatures, sequence, and time bounds.
The success of your decentralized app depends largely on the platform it’s built on. While the above smart contract platforms are among the best in the market, your ultimate choice of a platform depends on the app you intend to build. Some platforms prioritize security over speed, so make sure the platform you choose is aligned to your goals.