While Ethereum lags in 2024, Graphite Network debuts high-performance L1 blockchain

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As a seasoned analyst with over two decades of experience in the tech and finance industries, I’ve witnessed the evolution of blockchain technology firsthand. In 2024, Ethereum‘s performance has been lackluster compared to its competitors, particularly Bitcoin and Solana. However, it’s not all doom and gloom for Ethereum, as emerging networks like Graphite are shaking things up with their innovative approach to scalability, speed, and trust.

In the realm of blockchain analysis, I find myself observing an interesting shift in 2024. While Ethereum has only managed to garner 70% growth this year, innovative L1 networks such as Graphite are making waves. They promise faster transaction speeds, reduced costs, and a trust-centric blockchain ecosystem that is truly captivating.

As we near the end of 2024, I’ve observed that Ethereum has registered a year-to-date increase surpassing 70%. However, it lags behind other top cryptocurrencies like Bitcoin and Solana, which have soared by an impressive 142% and 107% respectively.

As a researcher delving into the dynamic world of cryptocurrencies, I’ve observed an intriguing dichotomy between Bitcoin and Solana. Bitcoin maintains its grip as a preferred asset among investors, primarily due to its robust deflationary design and reputation as a secure store of value.

Why is Ethereum underperforming in 2024?

The allure of Bitcoin comes from its limited supply and strict control over inflation, providing exceptional safety, consistency, and foresight. Conversely, Ethereum encounters issues with its overall distribution because of a substantial decrease in gas fee destruction.

As reported by CoinShares, the rising popularity of secondary networks like Arbitrum and Optimism is causing a large portion of activity to move away from Ethereum’s primary layer-1 network. This transition has led to a substantial reduction in Ether (ETH) being destroyed, which was previously a key aspect of Ethereum’s highly regarded deflationary system.

Moreover, it’s worth noting that other first generation blockchains like Solana have gained momentum, offering swifter transaction rates and lower costs. This has led to a steadily expanding user base for Solana. As of October, the number of active wallets on Solana reached an impressive 138 million, marking a substantial 245% rise since August. Concurrently, Solana’s Total Value Locked (TVL) has experienced considerable growth, accounting for approximately 2.7% of Ethereum’s TVL inflows this year. In stark contrast, Ethereum has faced challenges, recording a net outflow of approximately $6 billion in 2024.

In the spotlight, alongside Solana, another promising Ethereum competitor has just entered the market.

Enhanced on-chain speed and scalability: Graphite vs. Ethereum vs. Solana 

Graphite Network unveiled its unique L1 blockchain system, engineered to manage large numbers of transactions efficiently. This platform boasts the ability to process up to 1,400 transactions in a second, with confirmation times under 10 seconds. This level of performance outperforms Ethereum’s transaction speeds, which typically range between 15-20 transactions per second.

Graphite’s transaction system ensures a consistent fee structure, enabling users to estimate their costs in advance and steer clear of situations like the “gas bidding contests” that occur during Ethereum’s block verification, similar to an auction where fees function as the bids.

Moreover, Graphite’s Ethereum-compatible virtual machines facilitate the transfer of Solidity smart contracts onto the system, enabling developers to expand their current decentralized applications effortlessly, as they won’t need additional resources for construction on networks such as Solana.

Why Graphite is not just another L1

Graphite employs a Proof-of-Authority (PoA) consensus method and Polymer 2.0 algorithm, which means it depends on a group of trusted, authorized nodes to verify blocks. This setup significantly boosts operational efficiency by reducing the energy and computational demands that are usually linked with traditional Proof-of-Work systems.

Graphite’s transaction model uniquely provides a chance for entry-level (transport) nodes to generate passive income, a difference from other blockchains where only resource-heavy validator nodes receive rewards. Operators of transport nodes can expect to earn half of the transaction fees processed via their nodes, with the remaining half being allocated to block sealers.

Through enabling almost anyone to generate income by running a gateway node with minimal server requirements, Graphite simplifies blockchain usage and establishes a system where every user who contributes to the network’s function is fairly compensated.

Beyond this, Graphite is leading an innovative reputation-focused strategy in the realm of blockchain, blending traditional financial systems (TradFi) with the fundamental workings of web3. Crucial to this concept is a suite of tools designed to create a reliable and trustworthy blockchain ecosystem.

The activation of accounts follows a strict “One User, One Account” principle, thereby disallowing the generation of multiple temporary wallets that are frequently associated with fraudulent activities. With its comprehensive KYC (Know Your Customer) verification process, Graphite strikes a balance between maintaining privacy and ensuring transparency for both individuals and businesses. This multi-layered KYC verification allows users to apply filters based on transactional KYC standards, empowering them to decide with whom they engage. Additionally, the Trust Score system assigns a reliability rating to each account, fostering a secure and dependable network environment.

Graphite ensures both privacy and a solid reputation by employing Zero Knowledge Proof tech, which verifies information for decentralized apps without disclosing the data itself. All KYC (Know Your Customer) procedures remain off-chain in this setup.

The design of the blockchain’s Know Your Customer (KYC) regulations is significantly less invasive than those found in traditional finance (TradFi), thus enabling blockchain users to preserve a degree of privacy that matches their preferences.

In simpler terms, Graphite is going to introduce labeled wallets, where users can assign tags to their digital wallets associated with particular entities. This feature helps in maintaining appropriate use of funds and makes it easy to spot any suspicious activities directly on the blockchain.

Additionally, Graphite’s intelligent ticker system assigns the ‘@G’ symbol to every coin that is connected to its blockchain. This feature facilitates easy recognition within the network and contributes to the overall transparency of the ecosystem.

A new era of trust in blockchain

Globally speaking, Ethereum’s present difficulties are an integral part of the wider advancement in the blockchain sector, as other Layer 1 networks such as Graphite are opening up opportunities for larger user bases. The Graphite Network not only tackles Ethereum’s issues with scalability and costs but also establishes a reliable, user-focused blockchain ecosystem.

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2024-12-18 22:12