Why the 3 main blockchains were built: Bitcoin, Ethereum, Solana (short explanation)
2 min read

Why the 3 main blockchains were built: Bitcoin, Ethereum, Solana (short explanation)


[3 min read]

This is an extremely short and high-level version of why each blockchain was built — their pros and cons — and the voids filled by each subsequent blockchain.


Bitcoin

Main Utilities = a medium of exchange and digital store of value.

Bitcoin is the first of its kind. A decentralized, digital peer-to-peer payment network. Many refer to it as ‘digital gold’.

It grew in popularity due to its natural opposition to centralized, government-controlled money. Unlike the US dollar, Bitcoin operates outside the reach of governments and corporations — it is fully transparent, tamperproof, and deflationary in nature.

What makes Bitcoin so great is also what limits its utility. It’s perfectly suited as a digital store of value and a universal peer-to-peer payments network. But beyond that, it doesn’t have much utility for consumers nor developers.


The void filled by Ethereum

Main Utilities = smart contracts + using the blockchain to create a decentralized computer.

Ethereum enables two things compared to Bitcoin:

  1. Smart contracts — which allow developers to create decentralized applications.
  2. Higher throughput / transaction times — which increase transaction times from ~10 minutes (on Bitcoin) to ~7 seconds (on Ethereum).

If Bitcoin enabled the first digital currency for peer-to-peer trade, Ethereum took this a step further by enabling developers to build decentralized applications with entirely new economies and ecosystems, all powered by Ether. The advancements of Ethereum have resulted in the significant amount of volume we've seen in two short years in NFT marketplaces, DAOs, and Defi.

The best part? The greatest inventions on Ethereum have yet to happen.


The void filled by Solana

Main Utilities = higher transaction speeds at lower costs.

Throughput / transaction times Ethereum: 30 transactions per second vs. Solana: 60,000 transactions per second.

Ethereum is great for many things, but not if you need lightning-fast transaction times and low transaction fees. Both of which are necessary to build and run some of the more intricate Defi trading operations or keep up with the high volumes of NFT marketplaces. Solana has found a way to achieve both 👊.

Although Ethereum’s upcoming merge from PoW to PoS will help transaction speed and costs, it’s tough to imagine these numbers will ever be competitive with Solana, which today easily competes with the likes of Visa on transactions per second.