Over the last couple of months, the Ethereum blockchain project has seen its fair share of competing networks and platforms. The open-source nature and high efficiency of Ethereum network has prompted many financial technology developers to base their tokens on this network, and this has caused transaction fees to increase.
Ethereum competitors would like to a slice of its market share through platforms that charge substantially less per transaction, but data compiled by cryptocurrency analysts shows that these projects are far behind in terms of efficiency.
To better understand how the Ethereum blockchain works, it helps to think about the idea of a "hash" in terms of the data stored in the blocks that contain the information. A block consists of hashes that are all the information from the previous blocks, which we can be called the tip of a graph. Let's assume that each cryptocurrency block has an entire list of the previous blocks. Every block hash is stored as an integer between 0 and n, which is the current length. A unique integer is defined as the block's hash, and each element is defined as a value from 1 to n, which happens to be the next block.
A list of all block hashes is an array of hashes, each element being a value between 1 and the next block. We can say that each block serves as a function with only one parameter: the number of hashes to avoid confusion about how the hash function is defined. All these transactions are conducted under layers of cryptography for maximum security, and they are extremely complex and require quite a bit of processing power, electricity, and bandwidth.
Until Ethereum competitors figure out how to emulate its high efficiency in clearing transactions, they will continue to lag behind. It would be easier for core Ethereum developers to come up with solutions and partnerships to lower transaction fees, and this is what many analysts believe could happen later this year. Something else to think about is the inevitability of these competing projects actually merging with Ethereum in order to get a fraction of the transaction fees, which will be lowered for the benefit of token holders.