A beginner's guide to NEAR Protocol, the Ethereum competitor that prioritises scalability, user-friendliness and developer experience.
NEAR Protocol is a decentralised, blockchain-based platform designed to enable the deployment of decentralised applications (dApps) and smart contracts.
It aims to provide a more user-friendly and accessible platform for developers to build on, with faster transaction speeds and lower fees than some other blockchain platforms.
NEAR Protocol also utilises a unique sharding mechanism to increase scalability and support more applications on the network.
In this NEAR guide, we’ll discuss how it works, the coin’s role in facilitating the network and ultimately help you make a decision on whether you should buy the token in 2023.
Introduction to NEAR Protocol
NEAR Protocol was developed by a team led by Alex Skidanov and Illia Polosukhin in 2018.
It has since grown in popularity among developers as a promising alternative to Ethereum due to its developer-friendly features and superior transaction speeds.
NEAR Protocol was designed to address some of the key challenges that developers face when building on blockchain platforms.
It offers a more user-friendly platform on which to build, with lower fees and faster transaction speeds than Ethereum.
This makes it a more attractive option for developers who want to build decentralised applications without having to deal with the complexity and high costs associated with other blockchain platforms.
Yes Ethereum, we’re talking about you here.
NEAR Protocol's unique sharding mechanism also enables it to support a greater number of applications on the network, which is essential for scaling the platform and ensuring that it can meet the demands of a growing user base.
To summarise this introduction before we get into the meat of our guide, NEAR Protocol is an exciting new blockchain platform that offers developers a more accessible and user-friendly alternative to Ethereum.
With faster transaction speeds and lower fees, a focus on scalability and developer-friendly features, it certainly has the potential to become a leading platform for decentralised application development.
How does NEAR Protocol work?
NEAR Protocol's consensus mechanism is designed to be more efficient and lightweight than Ethereum's Proof-of-Stake (PoS) mechanism.
NEAR uses a hybrid PoS mechanism, where validators are chosen based on the amount of NEAR tokens they hold and their past performance in the network.
This system incentivises validators to behave honestly and provides a more secure and efficient validation process.
One of the key advantages of NEAR Protocol's consensus mechanism is its ability to handle a greater number of transactions per second compared to Ethereum.
NEAR can process up to 8,000 transactions per second, which is significantly higher than Ethereum's current capacity.
This makes NEAR Protocol more suitable for applications that require high transaction volumes, such as decentralised exchanges or gaming platforms.
Another advantage of NEAR Protocol's consensus mechanism is its reduced transaction fees.
The cost of transacting on NEAR is significantly lower compared to Ethereum, which has faced criticism for its high gas fees.
This makes NEAR Protocol more accessible to developers and users who want to interact with decentralised applications without incurring high transaction costs.
NEAR Protocol's unique sharding mechanism is also an important factor in its scalability.
By dividing the network into smaller shards, NEAR can process transactions in parallel and achieve greater throughput.
This approach also helps to reduce the computational requirements of the network, making it more accessible to a wider range of devices and users.
We know this guide to NEAR Protocol already sounds like a direct comparison to Ethereum and in some way it actually is.
When you’re the biggest and the best you have to expect that the competition will be compared to you and that’s what is happening right here.
But keep reading lower in this guide and we do actually directly compare the two networks head to head.
Is NEAR Protocol EVM compatible?
Yes, NEAR Protocol is compatible with the Ethereum Virtual Machine (EVM).
This means that developers can write smart contracts using the Solidity programming language and deploy them on the NEAR network.
This makes it super easy for developers to migrate their existing Ethereum-based applications to the NEAR platform, or to simply build brand new applications that are compatible with the existing Ethereum ecosystem.
In addition to EVM compatibility, NEAR Protocol offers a number of other features that make it an attractive platform for developers.
For example, NEAR's smart contract development environment is designed to be easy to use, with a simple and intuitive interface that makes writing and deploying smart contracts a breeze.
NEAR Protocol also offers a number of development tools and resources, such as the NEAR Studio IDE.
This resource provides a range of features for smart contract development, including a code editor, debugging tools and an integrated testing framework.
Again, ultimately making it easy for developers to build and test their applications on the NEAR platform.
See the pattern here?
The NEAR Protocol is all about making things easier.
Developers who are looking for a more efficient and accessible platform for building decentralised applications should genuinely consider NEAR Protocol as a viable option.
Is NEAR Protocol layer-1?
Yes, NEAR Protocol is a layer-1 blockchain platform.
This means it operates as the base layer of a blockchain ecosystem, providing a foundation for decentralised applications to run on top of.
As a layer-1 protocol, NEAR is responsible for maintaining the security and consensus of the network, validating transactions, and executing smart contracts.
This is in contrast to layer-2 solutions, which are built on top of existing blockchain networks such as Ethereum, seeking to provide additional scaling solutions and functionality.
NEAR Protocol's layer-1 architecture is designed to be efficient and scalable, with a focus on providing high transaction throughput and low fees.
The platform's consensus mechanism and sharding mechanism are optimised for performance, enabling it to handle a large number of transactions per second.
All while maintaining a high level of security.
As a layer-1 protocol, NEAR Protocol also offers a high degree of flexibility and customisation.
This makes it a popular choice for developers who want to build decentralised applications with specific requirements or functionality.
The platform's EVM compatibility and developer-friendly features also make it easy for developers to migrate existing applications or build new ones from scratch.
A huge selling point in a blockchain developer world dominated by Ethereum based dApps.
What is NEAR crypto used for?
The NEAR coin (NEAR) is the native cryptocurrency of the NEAR Protocol blockchain platform.
Put simply, NEAR crypto plays an essential role in facilitating transactions, executing smart contracts and securing the network.
You can acquire NEAR coins by purchasing them on your cryptocurrency exchange of choice, or by earning them through staking and mining on the NEAR network.
One of the primary use cases for the NEAR coin is to pay for transaction fees and smart contract execution fees on the NEAR network.
These fees are denominated in NEAR and are used to compensate validators while securing the network.
Additionally, NEAR coins can be used as a store of value or as a means of exchange for goods and services within the NEAR ecosystem.
At the time of writing, NEAR crypto can be bought and sold on a variety of cryptocurrency exchanges, including:
- Binance
- Huobi
- OKEx
The price of NEAR is determined by supply and demand on these exchanges, meaning it can obviously be volatile so make sure you do your own research before blindly buying.
Users who hold NEAR coins can also participate in staking, which involves locking up their coins to help validate transactions and secure the network.
In exchange for staking their NEAR coins, you can earn additional NEAR coins as a reward.
This provides an incentive for you to hold and use NEAR coins.
Acting as a self fulfilling prophecy which helps to further secure the network and promote adoption of the NEAR platform.
As you can see, the NEAR coin plays a critical role in the NEAR Protocol ecosystem, providing a means of exchange, a store of value, as well as facilitating network security and decentralisation.
NEAR Protocol pros and cons
Pros:
- Scalability: NEAR Protocol is designed to be highly scalable, with a sharding mechanism that enables it to handle a large number of transactions per second, making it a great option for developers building high-performance decentralised applications.
- Low fees: The NEAR network has low transaction fees, which make it an attractive option for developers and users looking for a cost-effective way to use blockchain technology.
- EVM compatibility: NEAR Protocol is fully compatible with the Ethereum Virtual Machine (EVM), which makes it easy for developers to migrate existing applications from the Ethereum network or build new applications using familiar programming languages and tools.
- Developer-friendly: NEAR Protocol has a strong focus on developer experience and provides a wide range of tools and resources to help developers build and deploy decentralised applications quickly and easily.
- Strong community: NEAR Protocol has a large and active community of developers, enthusiasts, and supporters, who are dedicated to the platform's success and growth.
Cons:
- Newer platform: NEAR Protocol is a relatively new platform, which means it has yet to achieve the same level of adoption and recognition as more established blockchain networks.
- Centralisation concerns: Some critics have raised concerns about the level of centralisation in the NEAR network, particularly around its initial validator set and token distribution.
- Limited smart contract functionality: While NEAR Protocol offers support for smart contracts, its functionality is currently more limited than other platforms like Ethereum.
- Limited tooling: While NEAR Protocol offers a range of developer tools and resources, its ecosystem is still developing and lacks the same level of tooling and support as more established platforms.
- Competition: NEAR Protocol faces competition from other blockchain networks, including Ethereum, Polkadot and Cosmos, among others, which could limit its growth and adoption in the long term.
NEAR Protocol (NEAR) vs Ethereum (ETH)
| Attribute | NEAR Protocol | Ethereum (ETH) |
|---|---|---|
| Consensus mechanism | Proof of Stake (PoS) | Proof of Stake (PoS) |
| Transaction speed | 100-2000 TPS (sharded) | ~100 TPS (PoS) |
| Smart contract functionality | Supports smart contracts with Rust and AssemblyScript | Supports smart contracts with Solidity |
| Programming languages | Rust, AssemblyScript, and others | Solidity and others |
| EVM compatibility | Fully compatible | Fully compatible |
| Gas fees | Low transaction fees | High transaction fees |
| Developer experience | Strong focus on developer experience with a range of tools and resources | Established developer community with a wide range of tools and resources |
| Centralization | Initial validator set and token distribution are a concern for some | Decentralised, but some concerns about the concentration of mining power |
| Market cap | $2.3 billion (as of April 2023) | $315 billion (as of April 2023) |
| Community | Large and active community with a focus on growth and adoption | Established community with a focus on decentralisation and community governance |
Should I buy NEAR Protocol (NEAR) crypto in 2023?
In conclusion, NEAR Protocol is a promising blockchain platform that has gained a lot of attention in the past few years.
With its focus on scalability, user-friendliness and developer experience, NEAR has positioned itself as a genuine competitor to Ethereum in the smart contract space.
While there are still concerns about centralisation and token distribution, NEAR has a strong and growing community that is working to address these issues.
As we move further into 2023, it will be interesting to see how NEAR evolves and whether it can continue to compete with Ethereum and other leading blockchain platforms.
But right now, etched inside the top 50 by market cap, NEAR is killing it.
If you're looking to invest in a promising blockchain project that has the potential to disrupt the status quo, NEAR Protocol is definitely worth considering.
LeoFinance Crypto Guides.
Why not leave a comment below and share your thoughts on our guide to NEAR Protocol (NEAR)? All comments that add something to the discussion will be upvoted.
This NEAR Protocol (NEAR) guide is exclusive to leofinance.io.