The rise of blockchain technology has led to an increase in the number of blockchain and cryptocurrency projects in the market. Each project focuses on a specific use case of blockchain technology, with some projects sharing similar focuses. However, there are no two blockchains that are the same. This can be because of the team behind the project, the community supporting it, or the way blockchain technology is used in the project. Although some projects arguably have no intrinsic value, most of the blockchain projects in the market do. One of the biggest questions currently in the blockchain and cryptocurrency space is whether or not it is possible to combine the value of each blockchain in the market to create one super blockchain ecosystem. This idea is referred to as the multichain movement in the blockchain space and has led to some division within the blockchain community, with some members being advocates for the movement and others being against the idea. In this article, we will take a look at a blockchain that is dominating the market, the pros and cons of the multichain movement, as well as what the blockchain trilemma is and how the multichain movement can address it.
Before we take a look at projects that are dominating the market, let’s take a look at what gives a blockchain project the edge in the market.
How To Gain A Competitive Edge
In order for a blockchain project to gain and keep traction in the market, it needs a constantly growing user base and needs to implement as many use cases for blockchain technology as possible. Besides Bitcoin, one other project dominates the cryptocurrency space in terms of market cap. Let’s take a look at which project that is.
One Project That Is Dominating the Market
Since Bitcoin’s inception in 2008, blockchain technology has come a long way. One of the biggest innovations in the blockchain space is the ability for developers to create their own decentralized applications on top of an existing blockchain. This is made possible using a new technology called smart contracts and is the main innovation that has led to many more in the space.
One of the most prominent players in the smart contract category is Ethereum, the first blockchain project that enabled developers to build decentralized apps on top of the Ethereum blockchain. Developers can create various apps by either utilizing the token templates defined by Ethereum, called token standards, or by writing their own templates and code in Solidity. Applications pay for run time on the blockchain through a fee called “gas.” The more transactions the application performs, the more gas it will have to pay to the Ethereum blockchain. This gas forms part of the mining reward paid out to the miners who maintain the blockchain.
Ethereum’s dominance in the decentralized applications, or dApps, creation category, has led to more projects entering the market that aim to knock the pioneering project out of its top spot. Projects such as Polkadot, Cardano, and Solana are honorable mentions in terms of projects that aim to compete with Ethereum. There are others, but these are the main competitors to Ethereum.
One project dominating the market does not really achieve the blockchain community’s decentralization. Ideally, an ecosystem that allows blockchain technology to thrive will play a big part in the future. This is what the multichain movement promises. Let’s take a look at the pros and cons of the multichain movement.
Pros and Cons of the Multichain Movement
Pros
Removes Any Monopolies From the Market
By creating a movement wherein all blockchains can work together and communicate through true cross-chain communication, any blockchain market monopolies will eventually seize to exist as the blockchain community removes majority dependence from one blockchain project and instead becomes dependent on all of the blockchains in the multichain ecosystem.
Benefits From the Value of Each Blockchain
As you may recall, for a blockchain project to gain and maintain traction in the blockchain market, it needs to have a constantly growing user base and needs to implement blockchain technology in as many use cases as possible. The multichain movement achieves this by combining the use cases of every blockchain in the ecosystem. It also builds a community made up of all community members from every blockchain in the multichain movement.
Cross-Chain Communication
Unlocking true cross-chain communication is beneficial for the end-user as they can unlock a plethora of possibilities all in one place: the multichain ecosystem. Now users will not need multiple wallets and accounts on a number of different platforms to enjoy the benefits of each blockchain.
Cons
Difficult To Be 100% Assured of the Outcome
Since the multichain movement has not fully taken shape yet, it isn’t easy to know the outcome. If some blockchain projects join the ecosystem and others don’t, it could strengthen the division between blockchain community members. On the other hand, the movement could enable the technology to thrive beyond any expectations as the resources of all of the blockchains in the ecosystem can be leveraged in one offering. Only time will tell what the multichain movement will lead to.
Now that we have covered the multichain movement’s pros and cons let’s look at a series of problems that blockchain technology faces.
The Blockchain Trilemma
The main problems with blockchain technology are:
- The interoperability (cross-chain communication).
- Scalability.
- Throughput (transactions per minute) of blockchain technology.
It is said that all 3 of these problems can not be addressed simultaneously, and this belief is coined as “The Blockchain Trilemma.”
The multichain idea is a promising solution to the blockchain trilemma. Since a multichain ecosystem combines the best aspects of every blockchain connected to the ecosystem, the ability to address each issue of the trilemma is then inherited from the respective blockchains.
To Recap
The multichain movement follows the belief that all blockchains should communicate with one another to form part of a larger ecosystem. This helps decentralize the blockchain space as community dependence on one blockchain project is lowered. The multichain movement is also a promising solution to the blockchain trilemma as it inherits attributes from each blockchain within the ecosystem that address each issue in the trilemma.
CORE MultiChain is looking to lead the way in the multichain movement by providing an ecosystem that will provide blockchain technology with the necessary resources and tools to thrive. CORE MultiChain also enables the development and deployment of many categories of decentralized applications ranging from gaming to NFTs to transactional systems where digital value can be transacted between users. The ability for blockchains to seamlessly connect to the CORE MultiChain ecosystem, together with the multiple-use cases that the ecosystem can be used for, gives CORE MultiChain the qualities needed to gain and maintain traction in the market. A fascinating project, CORE MultiChain has the technical features and the ease of use necessary to be considered a serious contender to most blockchain projects dominating the space.
