London, UK — The cryptocurrency market is constantly evolving. New coins are created, and new exchanges are launched all the time. It can make it difficult to keep track of everything that’s going on.
One thing that is certain is that there is a lot of competition in the market. Elon Gold, an analyst at FinancialCentre, has shared two cents on the overgrowing competition. Coins are constantly trying to one-up each other in terms of features, adoption, and price, says the broker.
Gold further discusses two of the most popular coins in the market right now, Ethereum and Cardano. Both have a lot to offer investors, and both have ambitious plans for the future. So, which one is better?
According to Gold, there is a constant comparison between them because both networks provide similar services. Both the Ethereum and Cardano blockchains can be used for similar purposes, like establishing decentralized applications and running custom programming logic.
However, there are definitely some major differences that we will discuss in this article. First, let’s take at the history of both networks.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third-party interference. Ethereum is used to pay for transaction fees and computational services on the Ethereum network.
Ether, the native cryptocurrency of Ethereum, is mined through a proof of work algorithm. The Ethereum network went live on July 30, 2015, with 72 million ETH pre-mined. The first transaction on the network was a complex smart contract that created the DAO, a decentralized autonomous organization that ran on Ethereum’s smart contract platform and raised over $150 million worth of ETH in its ICO.
The DAO was hacked in June 2016, and $60 million worth of ETH was stolen. In response to the hack, the Ethereum community voted to hard fork the blockchain to create a new version of Ethereum that would refund the stolen ETH to The DAO’s investors. This hard fork created a separate blockchain called Ethereum Classic, which has continued to operate as an independent cryptocurrency since then.
Since its launch, Ethereum has grown exponentially, and today, it is the second-largest cryptocurrency by market cap behind Bitcoin.
Cardano was founded in 2015 and launched in 2017 as a substitute for Ethereum. It is a proof-of-stake blockchain depending on network validators to execute transactions and maintain the network.
The team behind Cardano claims that it is the first blockchain platform to be based on scientific philosophy and peer-reviewed research. The platform is built on three layers: a settlement layer, a control layer, and a compute layer. Cardano also has its own programming language, Plutus, which is designed for smart contracts.
The currency itself, ADA, is named after Ada Lovelace, an English mathematician who is considered to be the first computer programmer. As of January 2022, Cardano has a market capitalization of US$40 billionand is the sixth-largest cryptocurrency by market cap.
Both coins have a lot to offer investors. However, there are some primary differences between them that could make one a better investment in the long run.
Scalability is one of the most important factors to consider when investing in a cryptocurrency. Ethereum currently has a scalability problem. The Ethereum blockchain can only process about 15 transactions per second (TPS). It is due to the way Ethereum’s smart contracts work.
Cardano, on the other hand, was designed with scalability in mind. It uses a different consensus mechanism (Proof of Stake) that is more efficient than Ethereum’s Proof of Work. It allows Cardano to process up to 1000 TPS.
Another crucial factor to consider when investing in a cryptocurrency is security. Ethereum has been hacked previously and is often targeted by hackers due to its popularity.
Cardano, on the other hand, is considered to be more secure. It is because it uses a different consensus mechanism (Proof of Stake) that is more resistant to attacks.
Adoption is another integral factor to acknowledge when investing in a cryptocurrency. Ethereum has a head start in this regard. It is the second-largest cryptocurrency by market cap and has a large community of developers and users.
Cardano, while not as widely adopted as Ethereum, is still growing in this regard. Cardano has partnerships with companies like Microsoft and Emurgo. These partnerships should help Cardano to increase its adoption in the future.
Ethereum currently has a higher price than Cardano. Ethereum’s current price is about $2022.36 per (ETH / USD), and Cardano’s current price is about $0.552 USD.
However, it doesn’t mean that Ethereum is a better investment than Cardano. The price of a cryptocurrency is not always a good indicator of its future success.
Ethereum and Cardano are both popular cryptocurrencies with a lot to offer investors. They both have ambitious plans for the future and are constantly innovating.
Investors should consider these factors when deciding which coin to invest in. Ethereum may have a head start in terms of adoption and price, but Cardano has the potential to catch up in the future.
Cardano is a good investment for those looking for a short/medium-term hold. The price is moderate, and the value is likely to appreciate as the DApp market grows.
Meanwhile, Ethereum is a good investment for people who are in it for the long run due to its high market share.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find in this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.