What is Near Protocol, and why are they essential to the cryptocurrency ecosystem?

Blockchain / Cryptocurrency
By Nivedita Bosman and Aryna Verchenko

What comes to mind when you think of cryptocurrency? Volatile, unregulated, a big gamble, Ponzi scheme, “POOF” - most likely, this is how people who have never studied this topic will answer. But what if we tell you that cryptocurrency is the money of the future?

In this article, we will introduce you to the NEAR Protocol, one of the most promising projects in the industry. We will detail Near’s unique perspective on Crypto and its future, and why NEAR may soon take the lion's share of the market from well-known Ethereum.


Drawbacks of Cryptocurrency/Crypto Myths

Let's look at Crypto's downsides to grasp the benefits of Near Protocol as an alternative to its competitors. 

1. Speed

Most cryptocurrencies are pretty slow compared to your average bank system. For example, transferring Crytpo can take anywhere from a second to 40 minutes if it doesn't fit into a block. This speed differs from one Cryptocurrency to the other. One may quickly gauge this by the rate of its Transactions per second (TPS), where a higher gross number of transactions per second means a faster transaction time for each user. 

2. Gas Fees

Imagine a world where each time you paid for a coffee, the service charge was 20 dollars. Gas fees are transaction fees paid by users to compensate for the amount of energy one transaction takes, and the fee is more often than not disproportionate to the money being moved or used.

Take a look at the table below to understand how Near compares to other Cryptocurrencies.

Table 1

Crypto Speed Transactions per second (TPS) Gas Fees (subject to change)
Near Protocol ≈1 second 1.5M $0.01 - $1.0
Ethereum ≥ 5 minutes 15 ≈ $5.6 - $21.6
Bitcoin ≥ 40 minutes 9,000 ≈ $1.5
Solana Near-Instant 65,000 $0.0005-$0.0009
Traditional Banking Roughly 3 days 1,700 1-3%

3. Utility

A cryptocurrency's value also depends on where and how one can use the Cryptocurrency in question (i.e. various e-commerce sites, purchasing NFTs)

4. Security

Unlike Traditional currencies, one can use Near to build decentralised finance (DeFi) apps. Blockchain ensures the security of whatever app or software framework you are building, and is theoretically “unhackable”. 

How does Near accomplish this? 

Near works on a revolutionary "sharding" system. This system uses database partitioning to do a few things: lower stress on the system so that transactions are faster, cheaper, and easier; this makes Near Protocol's transaction speed much better than many other cryptocurrencies and lowers gas fees significantly, making the experience very user friendly. 

In January 2022, the NEAR team closed another investment round in which they managed to raise $150 million from various investors, including Dragonfly Capital and Three Arrows Capital. The NEAR Protocol team has also entered into dozens of partnerships with major blockchain projects, including Chainlink, Balancer, Ledger, TrustWallet, Ardana, and many more. 

The Near Protocol Ecosystem

This links back to Near’s ability to hire even more developers and further expand the project by working with companies such as Kiews to create plugins. 

However, the project still remains somewhat undervalued, especially in the NFT and DeFi space. But given all the advantages of the blockchain, it is highly likely that NEAR will be able to attract large-scale players in these industries in the near future.

Paul Veradittakit, a partner at cryptocurrency hedge fund Pantera Capital, is convinced that NEAR’s growth will continue this year. Many are already calling NEAR the next “killer” of Ethereum. Well, even if the project does not become the killer of the second-largest cryptocurrency, then the NEAR protocol has every chance to take away a significant part of the market from it.

What makes Near truly unique is its desire to be used by the “everyman”. In a discussion available on Youtube between the CEOs of Near and Solana, Near’s CEO Alex Skidanov stated that Near isn’t very concerned about decentralising Near Protocol because their target audience isn’t worried about DeFi in general, and is more focused on creating a currency that is outside of the government's reach and control.