There are hundreds and thousands of digital coins and tokens in the crypto market. They compete in the market to attract many investors and potential traders to their blockchain network. The increasing usability of cryptocurrencies has helped several projects to grow their market cap and trading volumes in the last few years.
Mainstream cryptocurrencies like Bitcoin, Ethereum, and Cardano have solid fundamentals and roadmaps to support their growth in the crypto space. But at the same time, several other projects with somewhat unclear goals have also made a massive upsurge in the crypto world. This shows the unpredictable nature of the blockchain and cryptocurrency realm.
This article will compare and contrast two primary crypto tokens of the market, Ethereum, and Cardano. We will discuss their basic models, project details, features, key differences, smart contract capabilities, consensus mechanism, gas fees, price and market cap difference, and other factors. As a result, concrete and factual analysis will be conducted for Cardano vs Ethereum.
Both Cardano vs Ethereum have several similar features, like smart contracts and the building of decentralized applications, but they both differ in design, general philosophies, and goals. This is why Ethereum vs Cardano is often debated upon by cryptocurrency experts.
What is Ethereum?
Ethereum is the second-largest cryptocurrency in the digital asset industry, only second to bitcoin. The Ethereum blockchain is among the most popular and most used platforms for the sectors like decentralized applications (dApps), decentralized finance (DeFi), and non-fungible tokens (NFTs). Ether is the native cryptocurrency of the Ethereum blockchain platform.
The pros of the Ethereum blockchain
The Ethereum pros include that the blockchain hosts smart contracts in its ecosystem that help it function more smoothly and effectively. These smart contracts are currently one of the most valued and appreciated features in a blockchain network, as they incorporate more security and transparency into the network. Users can efficiently execute safe transactions and payments through a smart contract without the need for any third party.
The open-source nature of the ethereum network allows anyone to create new dApps. These applications utilize the native cryptocurrency of the Ethereum platform Ether (ETH). Therefore, both the decentralized application and the host network benefit from its success.
The cons of the Ethereum network
The Ethereum network uses the Proof of Work (PoW) mining protocol which is often criticized for extremely high energy consumption. On the network, miners validate transactions through very high-powered computers that assist them in solving complex puzzles and codes. As these tricky puzzles become more and more complex, miners consume more energy to validate transactions.
Another drawback of the Ethereum network is that it charges extremely high gas fees for conducting transactions. Ethereum developers have been launching Eth 2.0 that decreases this gas issue, and the blockchain platform transition to the proof of stake pos protocol. The evidence of stake consensus protocol is much more environmentally friendly, and it gives miners a chance to verify transactions and earn rewards for their contribution to blockchain technology.
However, it is not that easy for the Ethereum network, as the update has been constantly delayed. Even though the ethereum co-founder is adamant that the transitioned model will roll out in 2022, there are still some concerns and doubts over its release date.
What is Cardano?
Cardano was primarily developed to counter the Ethereum token. One of the co-founders of Ethereum built the Cardano foundation, which sparked an undying debate on Cardano vs. Ethereum. Nonetheless, Cardano and Ethereum have several similarities within their protocols. The native token of the Cardano protocol is called ADA that is used for rewards on the network.
Pros of the Cardano network
Cardano also allows the building of decentralized applications on its network, Like Ethereum. It is currently hosting an NFT marketplace and an Indigo Protocol on the Cardano blockchain. It enables users to trade real-world assets with ease.
Cardano makes use of the proof of stake pos mining protocol which gives it an edge over Ethereum. Unlike Cardano, Ethereum is still waiting to transition to the PoS (Proof of Stake) model. Both Ethereum and Cardano support smart contracts in their blockchains. Moreover, Cardano smart contracts were recently introduced in the Cardano blockchain, and it has enhanced the protocol of the network, adding on to the Cardano pros.
The ADA token has also gained much relevance in the cryptocurrency space. A while ago, it was ranked as the third-largest cryptocurrency, only behind Bitcoin and Ethereum. Investors and ADA holders are earning rewards by staking ADA. It has helped the network verify transactions, use smart contracts, and profiteering network contributors and stakeholders.
Cons of the Cardano network
The Cardano network has grown tremendously over the last one or two years, but it is still in its infancy when compared to Ethereum. Cardano’s rivalry with Ethereum and Solana can prove to be a decisive factor in limiting the token’s growth. The operating system of Cardano gives a lot of control to holders over voting for the future of the blockchain. This can backfire on the network in several instances.
Also, Cardano is yet to have fully-operable smart contracts that automate financial services and transactions. So till then, it can be considered overvalued in comparison with other smart contract cryptocurrency projects. Its computing power will play a crucial role in the project’s performance in the coming years.
Use cases of ETH vs ADA
Ethereum, as well as Cardano both, have a strong reputation in the cryptocurrency market. They have several use cases as well, which makes them unique in several aspects. Both blockchains promote the use of decentralized applications and smart contracts. But they differ at the energy consumption levels.
Developers can use both the Ethereum (ETH) and Cardano (ADA) blockchains for similar features, including running custom programming logic (smart contracts) and building programs (decentralized applications). The heart of any blockchain platform is the algorithm it uses to create blocks and validate transactions. Cardano and Ethereum use different blockchains.
The significant difference at the moment is that Ethereum’s Proof-of-Work blockchain is proving less flexible than Cardano’s Proof-of-Stake Ouroboros consensus protocol. Where Bitcoin is seen as a first-generation cryptocurrency, and Etherum is generally considered a second-generation cryptocurrency, Cardano is setting itself up as a third-generation cryptocurrency. The reason for this is the safety and scalability of its Proof-of-Stake (PoS) protocol.
Ouroboros, created by Cardano in its foundation phase, is the first PoS protocol that proved secure and was the first to be informed by scholarly academic research. Each development phase, or era, in the Cardano roadmap, is anchored by the research-based framework, incorporating peer-reviewed insights with evidence-based methods to progress toward and achieve the milestones related to the future directions of the use applications of both the blockchain network and the ADA token.
Importance of smart contracts and decentralized applications
Smart contracts are predefined and irreversible, making them safe and secure, ensuring transparency for the stakeholder. However, a smart contract is like a vending machine because it processes transactions and completes the task without any facilitator or third party. These contracts are public, and any individual can build their contracts.
On the other hand, dApps are believed to be the next big thing in the blockchain industry. They are not only used for informational purposes, but they are also helping in raising awareness about decentralization and anonymity – the basic concepts of the world of crypto.
Conduct and verify transactions
Both of these projects are looking for ways to solve the issue of scalability in the crypto industry. However, Ethereum faces more difficulties because it has a high value and targets a sizeable financial scale. So, the transactions on the Ethereum network are more slow and expensive. Cardano is more scalable than Ethereum, giving it an advantage on the Cardano vs. Ether debate. Nonetheless, once the anticipate Ethereum 2.0 upgrade rolls out, things might be different for both of these altcoins.
Proof-Of-Stake mining requires a lot less energy and fewer resources than Proof-Of-Work systems since Proof-Of-Work miners have to do much more ‘work’ to mine blocks. Ouroboros requires a small number of ADA holders to be online and maintain good network connectivity. Transactions can be validated quickly and cheaply due to this improvement.
Seeing the advantages of a Proof-of-Stake mechanism, Ethereum 2.0 intends to move from a PoW to a PoS model. Cardano does have the advantage of being the first-mover in this field, and Ethereum will have some catching up to do. Cardano is one of the few L1 blockchains that refuse to compromise their other attributes in favor of scalability. And like ETH, it takes no shortcuts, has a similar grand vision for the future, and is supported by a vast, loyal community. But is it taking too long?
Comparison of their price analysis
ADA/USD traded in a range of $2.01 – $2.13, indicating mild volatility over the last 24 hours. Trading volume has declined by 44.64 percent and totals $3.33 billion, while the total market cap trades around $67.3 billion, ranking the coin in 6th place overall. This is nothing compared to the market leader, Bitcoin, losing 2.47 percent, while Ethereum was losing 2.1 percent. The rest of the top altcoins have seen even worse results, with a drop of over 5 percent.
Bitcoin is the leading token in the market, and Ethereum is the only one that is believed to be the competitor of Bitcoin. However, Ethereum has many altcoin competitors of its own. This is why Ether’s market capitalization receives a dent now and then, because of its several killers in the market.
The concept “Ethereum killer” has been bandied around by countless crypto projects, shillers, and media platforms for several years. Yet, many retail investors merely scoff at them, as Ethereum has remained the undisputed king of decentralized applications (dApps). When a project decides to build a blockchain app, Ethereum (ETH) has always been the go-to network 9 times out of 10.
Ethereum stands at number two in the largest cryptocurrencies in market capitalization, whereas Cardano is currently at the fourth spot. Both of them have commendable figures as their market caps and trading volumes, but in comparison with each other, ETH is four times ahead of Cardano. However, concurrent with the success of DeFi and NFTs, many startups have decided to either leave Ethereum for other networks, utilize layer-2 solutions (L2s), or become multi-chain to allow their users to enjoy the low fees and quick processing times of different blockchains.
The overall market saw bearish momentum take over again over the last 24 hours. Bitcoin declined by 1.41 percent, while Ethereum by 1.93 percent. Meanwhile, Decentraland (MANA) is the top performer, with a gain of over 38 percent.
Large institutions and investors are keen to invest in ETH, as they believe it to be the next big thing in the crypto market, topping the world computer of digital assets after Bitcoin. But on the other hand, small-scale investors, traders, and organizations are heavily invested in Cardano. No one can give clear financial advice in this scenario, but this shows both tokens’ wide popularity and growth. The race between the two token’s market capitalization can become more interesting when big financial investors move to the Cardano network.
Experts from Deutsche Bank call Ethereum the ‘digital silver,’ a position initially held by Litecoin. The German multinational investment bank says cryptocurrencies are “too significant to ignore.” Deutsche Bank also predicts digital currencies surpassing traditional fiat money by 2030.
Buying ETH and ADA
The cryptocurrency market is becoming more and more inclusive of different regions as people worldwide continue to explore the new concept. This popularity was initially driven by Bitcoin, and then after Bitcoin, the likes of Ether, Cardano, Doge, and Ripple took charge. As a result, the role of cryptocurrency or bitcoin exchanges increased throughout the world. These exchanges proved to be a bridge between the consumers and the live trading digital asset market.
The centralized and decentralized exchanges have facilitated bitcoin and crypto enthusiasts from all over the world. They offer extensive crypt0-related services like buying, selling, trading, and exchanging coins and tokens. Also, users can use these exchanges to hold their assets in reliable crypto wallets. Therefore, anyone who wishes to invest in ETH or ADA tokens can opt for a reliable business and carry on with their trading or investing career.
Where to buy ETH/ADA
Since Ethereum is so popular, most cryptocurrency exchanges will let you buy ether, but we recommend sticking to a few of the more-popular exchanges like Coinbase, Gemini, or eToro. Ethereum is also one of the few types of crypto you can buy on platforms like Venmo or PayPal. General steps to buy ETH/Cardano:
- Decide how much Ethereum you want to buy.
- Find a secure cryptocurrency exchange or brokerage.
- Create an account, deposit money, and buy your Ethereum.
- Consider a wallet.
There’s a good discussion here of each step.
Both Ether and Cardano have solid fundamentals and support from the crypto community to back themselves. They are the next ones in line after Bitcoin to make a statement in the industry. However, investors and traders should conduct their research and choose as per their own goals and preferences.
Both of these tokens might continue to move upwards in the competitive market, and the competition between the two might also get fierce. Nonetheless, the success of Ethereum and the constant pressure from Cardano might be a positive sign for the overall market and the future of digital assets in the world.
That said, cryptocurrency could also be a potentially lucrative investment if it does succeed over the long run. Two rising stars of the crypto world are Ethereum (CRYPTO: ETH) and Cardano (CRYPTO: ADA), are similar in many ways, but due to some key differences, you need to figure out the better investment for you, which in turn will depend on your tolerance for risk.
While both cryptocurrencies are risky, Cardano may be a higher-risk investment at the moment because it’s newer and doesn’t have the track record of Ethereum. However, Cardano does have its strengths, so if you’re willing to take on higher amounts of risk and hold your investments for the long term, it could be the right choice for you.