If you invest in cryptocurrencies, you must have certainly heard of the debate between Cardano and Ethereum.
The Cardano and Ethereum are often compared because the two networks offer similar services.
Developers can use both Ethereum (ETH) and Cardano (ADA) Blockchains for similar functions such as executing custom programming logic (smart contracts) and building programs (decentralized applications).
At the heart of the Blockchain platform are the algorithms used to create blocks and validate transactions. Cardano and Ethereum use different Blockchains.
The main difference now is that Ethereum's Proof of Work Blockchain has proven to be less flexible than Cardano's Proof of Stake.
What is the difference between Ethereum and Cardano? Let’s take a look at it below!
What is Cardano?
Cardano (also known as ADA) is a Blockchain platform created in 2017. It works on the Proof-of-Stake Ouroboros consensus protocol.
The heart of any Blockchain platform is the algorithm it uses to generate blocks and validate transactions. Cardano uses Ouroboros, an algorithm that uses the Proof-of-Stake (PoS) protocol to mine blocks. The protocol is designed to minimize energy consumption during block production.
What is Ethereum?
Ethereum (also known as Ether) is a Blockchain platform founded in 2015. It has a programming language called Solidity.
Ethereum is a much faster Blockchain than Bitcoin, making blocks very easy to mine. Also, it is not a cryptocurrency with an upper limit. However, like Bitcoin, its Blockchain relies on the Proof of Work (POW) protocol to mine blocks and validate transactions.
The Ether Token acts as a medium for contracts and applications built on the platform. Users can create smart contracts on the Ethereum Blockchain. Smart contracts are a major feature of Ethereum and set them apart from other players in the crypto space.
The Difference between Ethereum and Cardano
Ethereum and Cardano are Blockchain platforms, both designed to act as decentralized application platforms. This is distinct from cryptocurrencies such as Bitcoin, which act as a medium of exchange and storage of value.
Bitcoin is considered a first-generation cryptocurrency, and Ethereum is a second generation cryptocurrency. Cardano has established itself as a third-generation cryptocurrency. The reason is the security and scalability of the Proof of Stake (PoS) protocol.
In summary, let’s look at the pros and cons of each cryptocurrency:
∙ It’s the largest smart contract network that exists
∙ It's the host to most tokens and NFTs
∙ First-mover advantage
∙ Pending migration to ETH 2.0 will improve efficiency
∙ Massive Network congestion
∙ High gas prices
∙ 1-layer system
∙ Ethereum development is ineffective and difficult to peer-review
∙ Dual-layer makes transactions more efficient
∙ Already on PoS that is eco-friendly
∙ Gaining traction with new user cases
∙ Limited supply
∙ More inclusive and easily peer-reviewed programming language
∙ Few decentralized applications on its network for now
∙ Slow to introduce smart contracts
∙ Slow adoption as an actual currency
In light of the above, ADA seems to have some stronger "foundations" in the future. A dual-layer system with already established PoS and a more user-friendly programming language should provide a better environment for hosting tokens and DApps.
However, Ethereum has something that ADA does not have, and it has the advantages of the starter and the network effect. Ethereum is where it should be, and there are already thousands of DApps. At this point, it makes more sense to build an app on Ethereum.
Having read through the above article, can you now see that Cardano and Ethereum are compared because the two networks offer similar services?
Developers can use both Ethereum (ETH) and Cardano (ADA) Blockchains for similar functions as executing custom programming logic (smart contracts) and building programs (decentralized applications). The main difference is that Ethereum's Proof of Work Blockchain has proven to be less flexible than Cardano's Proof of Stake Ouroboros consensus protocol.
Ultimately, the argument between Cardano and Ethereum as investors is a false dichotomy. These two Blockchain networks go nowhere, and both have the potential to increase in value in the long run.
In the short term, Cardano seems to be a good buy. It is reasonably priced, and as the DApp market grows, both may be able to improve in value.
In the long term, Ethereum, with its large market share and the improvements expected in Ethereum 2.0, is likely to be a good cryptocurrency to hold.
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