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When it comes to cryptocurrency, there are two names that stand out: Cardano and Ethereum. Both of these platforms have their own unique features, but which one is the better option for you? In this article, we will compare Cardano vs Ethereum and help you decide which platform is right for you!

When it comes to cryptocurrency, two names stand out: Cardano and Ethereum.

Ethereum (ETH) became one of the largest blockchain networks out there, mainly because it was one of the first to truly introduce smart contracts as a technological advancement within the blockchain space.

It essentially paved the way and gave birth to what we know today as decentralized applications (dApps) and non-fungible tokens (NFTs).

Without Ethereum, the sphere of Decentralized Finance (DeFi) might have looked different, and its overall influence within the crypto sphere cannot be understated. Furthermore, Ethereum is the second largest blockchain in terms of market capitalization. As a result, it is up there alongside Bitcoin (BTC) as one of the most commonly bought and invested cryptocurrencies.

On the other end of the spectrum, Solana was built to solve many of the issues within Ethereum, such as scalability, where it aimed to provide a lot higher throughput (transactions per second) compared to the Ethereum blockchain.

Once Solana launched, many developers began creating dApps for the network, and it became a home for DeFi and NFTs mainly because it was much cheaper to develop for it and use it due to the lower transaction fees.

Both of these platforms have their unique features, but which one is the better option for you? In this article, we will compare Cardano vs Ethereum and help you decide which platform is right for you!

Cardano

What Is Cardano?

Cardano is a smart contract platform that allows users to validate transactions and create new applications on the blockchain. The platform is built on top of the Cardano blockchain, which uses a Proof-of-Stake (PoS) consensus algorithm.

Cardano is one of the first blockchain platforms to be developed from scratch and is designed to be scalable and flexible. The platform has been under development since 2015 and is currently launching its main net.

Cardano plans to offer several features that are unique among smart contract platforms, including a multi-asset ledger, smart contracts that can be upgraded without Forkin, and a Pluggable smart contract interpreter.

Cardano is still developing and has not yet launched its main net or released its roadmap. However, the team behind Cardano is experienced and has already made significant progress on the platform.

ethereum-blockchain

What Is Ethereum?

Ethereum is a blockchain platform that runs on a blockchain Ethereum blockchain. The Ethereum blockchain is a decentralized, global computer that allows for the execution of smart contracts.

These contracts are self-executing, meaning they do not require a third party to enforce them. Ethereum uses a proof of work algorithm to validate transactions and prevent double-spending. This algorithm is energy-intensive, making Ethereum one of the most energy-efficient blockchain platforms.

Ethereum has been used to create decentralized applications, which are apps that run on the blockchain. These apps are censorship-resistant and cannot be shut down by any government or organization.

Ethereum is also working on a project called Polkadot, which is a decentralized internet protocol that will allow for scalability and interoperability between different blockchain networks.

Ethereum is an open-source project with a large community of developers working on it. It is free to use, and anyone can contribute to its development. Ethereum has the potential to revolutionize the way we interact with the internet and create a more open and decentralized world.

How Are Cardano and Ethereum Different?

Cardano and Ethereum provide comparable blockchain solutions. Smart contracts may be developed on both platforms, as well as decentralized applications. There are some important distinctions between the networks, though.

Cardano vs Ethereum: Development Approach

The main difference between Ethereum and Cardano is how they were put together and how they were made. Ethereum stands out because it is useful and changes can be made quickly, while Cardano requires that each part of the architecture be reviewed and tested by a team of experts before it can be used.

Because Ethereum’s developers spent less time on theory and moved more quickly, the product became a leader in the smart contract niche and the second-largest blockchain project in market capitalization.

Ethereum is now a mature ecosystem on which many decentralized applications have been built. The stages of the roadmap move along very slowly. Cardano came out in 2017, which was a few years after Ethereum. A lot fewer projects use Cardano, and those projects are much less well-known. But Ethereum’s popularity is slowly going down.

Vitalik Buterin’s invention was first used to take over developed countries, while Cardano’s first focus was on developing countries and how to work with their governments. The creators of Cardano have chosen to show how useful their product is in areas where blockchain technology is in high demand.

Cardano vs Ethereum: Consensus Protocols

Ethereum’s main network still uses the Proof-of-Work (PoW) consensus model. Experts have been very critical of this technology because it uses too much energy and negatively affects the environment. For a transaction to be added to the blockchain, it has to get “mined.”

All these things make experts dislike the PoW consensus and make it unsuitable as a platform for dApps. Ethereum, on the other hand, is moving toward ETH 2.0, which will be finished in 2022.

Ethereum will eventually transition to the Proof-of-Stake (PoS) consensus mechanism with the addition of ETH 2.0 (Ethereum 2.0), also known as “The Merge.”  Cardano does not use Proof-of-Work (PoW).

The Ethereum Blockchain Architecture

Proof-of-Work (PoW) is the current consensus mechanism to secure the network.

Ethereum transactions are essentially processed into blocks, where each block features a block difficulty, a mixHash, and a nonce. This block data then gets directly related to PoW.

  • The PoW protocol known as Ethash requires miners to race with one another during trial and error, where their objective is to find a nonce for a block. Only blocks that feature a valid nonce can be added to the chain.
  • Each miner will repeatedly need to put a dataset that they can only get from downloading and running the full chain through a mathematical function.
  • This dataset then gets used to generate mixHash below a target nonce, as dictated by the block’s difficulty.
  • The difficulty determines the target for the hash, where the lower the target is, the smaller the set of valid hashes. Once generated, this makes it easy for other miners to verify it. At the point in time when a transaction changes, the hash would be completely different, which would give the network an indication that it is fraudulent.

Experts agree that Proof-of-Stake is the best alternative to blockchains that are just for smart contracts right now. Cardano, on the other hand, uses the Proof-of-Stake consensus model. Instead of miners, stakeholders keep an eye on how the network runs while using less energy.

However, Cardano’s consensus mechanism goes a lot deeper, so to truly understand it, we will be diving deeper into it.

The Cardano Blockchain Architecture

The Cardano blockchain is actually made up of two main components that enable its functionality. First, there’s the Cardano Settlement Layer (CSL). This layer fills the role of being a unit of account and is the place where the token holders can essentially send or receive ADA instantaneously with minimal transaction fees.

Then there’s the Cardano Computational Layer 9CCL), a set of protocols that fills the role of the blockchain’s backbone and aims to aid in running smart contracts while ensuring security and compliance and even allowing for other advanced levels of functionality. These include blacklisting and even identity recognition.

Keep in mind that the Cardano open source code was originally written utilizing Haskell, a universally recognized and secure programming language.

By design, Cardano was intended to be a Proof-of-Stake (PoS) blockchain, and its implementation of this model is known as “Ouroboros.” This consensus mechanism lets ADA coins get sent and received easily and with a high level of security at any point in time while also ensuring the safety of the smart contracts found on top of the Cardano blockchain.

Ouroboros provides rewards to the token holders that decide to start staking their ADA to the network and help the network reach consensus.

  • The network randomly selects a few nodes that have the opportunity to mine new blocks; these are known as the leaders.
  • The blockchain then splits into slots, where each is called an epoch.
  • The slot leaders then have the opportunity to essentially mine the specific epoch or sub-portion of the epoch, and any participants who aid in this mining process are rewarded for their participation.
  • An epoch can be partitioned indefinitely, and what this essentially means is that the Cardano blockchain can be, in theory, at least, infinitely scalable. This allows it to run as many transactions as required without reaching a potential bottleneck.

Furthermore, Ouroboros features mathematical security when it comes to picking blockchain validators.

In both networks, developers can run custom programming logic, and as such, both networks play a major role in the crypto space, both in terms of their technology as well as market cap.

Cardano vs Ethereum: Scalability

In terms of being able to grow, Cardano is better than Ethereum. The system can handle more than 2 million transactions per second with an up-to-date pool of validators if the Hydra scaling solution is implemented.

Ethereum is much slower than many of its younger competitors because it can only process 16.5 transactions per second. With Ethereum 2.0, users will be able to make transactions up to 100,000 times per second, which is much faster than VISA.

Cardano vs Ethereum: Market Capitalization

Ethereum and Cardano are two of the top ten cryptocurrencies right now. Their market caps are $478 million and $44 million, respectively. If we were talking about public companies instead of cryptocurrency platforms, we could say that the project’s developers have a large market capitalization.

Large investors and institutions have invested a lot of money into Ethereum, which has helped raise its market capitalization. The price of ETH has almost doubled in the past year. Vitalik Buterin’s development is steadily growing in value as more and more investors believe in Ethereum’s future.

These are some of the best blockchain projects in the crypto space; however, when we put them in a side-by-side comparison in the crypto world, in terms of market capitalization, Ethereum is larger.

Many investors are interested in ADA because it has a lot of room to grow. Cardano’s large capitalization, measured in tens of billions of dollars, shows how stable and important the system is to society. In the past year, this coin has become eight times more valuable.

Both networks can verify transactions. However, Ethereum has slow transaction times, while Cardano appears to be much quicker when transferring its ADA cryptocurrency, which can be attributed to its peer-reviewed research approach.

Cardano vs Ethereum: Smart Contract Features

Cardano uses the Extended Unspent Transaction Output (eUTXO) accounting model, which is a smart contract-enabled update of Bitcoin’s UTXO model. It’s different from regular cash because it can be used for many digital assets and functions. Ethereum, on the other hand, uses the Account/Balance model, which is similar to how commercial banks store money in the accounts of users.

Compared to Ethereum, the eUTXO Cardano model makes smart contracts easier to understand and makes it easier for developers to make and run decentralized applications.

Cardano smart contracts have only recently started working, and the system hasn’t become popular enough to be tested in the same “battle” conditions as Ethereum. Because the platform doesn’t have a decentralized exchange, it’s hard to give an unbiased opinion on how reliable, secure, and useful it is. So, Ethereum is clearly ahead regarding how smart contract technology is being used.

Remember that Cardano is based on peer-reviewed research, and Cardano’s Ouroboros is quite unique compared to PoW.

NFT

Non-Fungible Token (NFT) Ecosystems: Ethereum Blockchain vs. Cardano Blockchain

Non-Fungible tokens (NFTs) are another development within the blockchain space. They initially gained a lot of fame and attention on top of the Ethereum (ETH) blockchain, and one of the biggest NFT marketplaces, OpenSea, also fully supports Ethereum (ETH) NFTs.

This initially fueled creatives to mint (Create) all of their NFTs on top of Ethereum.

To make this an availability, Ethereum implemented two token standards, ERC-721 and ERC-1155.

These essentially define what an NFT needs to be composed of; in other words, it showcases that it needs to be a unique token with different values compared to other tokens from the same smart contracts.

However, there was one issue when it came to minting, selling, or even trading NFTs on top of Ethereum, and that involved the high gas fees incurred. This made it an expensive ecosystem and network to get in, especially for creatives who were just starting to get into the world of NFTs.

On the other hand of the spectrum, we have Cardano’s approach. On Cardano, native assets feature an amount/value, a name, and a unique policy ID.

Because the names are not unique and can be easily duplicated, each Cardano NFT needs to be identified by the policyID.

This ID is essentially unique and is attached permanently to the asset. The policy ID stems from the policy script, which defines the characteristics, such as who can mint tokens and when they can be made.

This essentially means that Ethereum’s NFTs are made by the creation of smart contracts, while Cardano’s NFTs are treated like all other tokens and are minted directly on top of the Cardano blockchain.

Best NFTs on the Ethereum Network

Some of the most popular Non-fungible token (NFT) collections built on top of Ethereum are:

  • Mutant Ape Yacht Club
  • Otherdeed for Otherside
  • Bored Ape Yacht Club
  • Moonbirds
  • CryptoPunks
Best NFTs on the Cardano Network

Some of the most popular Non-fungible token (NFT) collections built on top of Cardano are:

  • Yummi Universe
  • Clay Nation
  • Pavia
  • Deadpxlz
  • Spacebudz
Cardano vs Ethereum

Which One Is The Better Blockchain Platform For You And Your Needs?

If you’re trying to decide between Cardano vs Ethereum, it’s important to understand the key differences between the two blockchain networks.

Ethereum is the incumbent platform for decentralized applications, but it’s not without its flaws. The Ethereum debate has raged on for years, with no clear consensus. Meanwhile, Cardano is a relative newcomer to the blockchain space, but it has big ambitions.

The Cardano foundation aims to create a blockchain network that is scalable, flexible, and sustainable. So which one is better for you and your needs? Only you can decide that. But we hope that this article has provided some food for thought.

It is also important to remember that Ethereum will make the switch to a Proof-of-Stake (PoS) consensus mechanism with the introduction of ETH 2.0 (Ethereum 2.0), also dubbed “The Merge.” This essentially means that we will see a dramatic shift in how transactions are verified on top of the network. Ultimately, with “Shard chains” which are planned to be added at some point in the future, we could see much higher scalability on Ethereum as well.

You can base your decision on the current state of each blockchain, but waiting for Ethereum’s merge could be the best choice of action for this point in time. In any case, both blockchains currently fill their roles and have specific features that make them stand out individually.

Both the Ethereum and the Cardano network feature solid opportunities. Cardno had the Vasil Hard fork, while Ethereum will have “The Merge”. They are both a good cryptocurrency option and are generally considered by the community as solid choices in terms of investments.

Conclusion

So, which of these two platforms is the better investment? Well, that depends on what you’re looking for. Cardano seems more focused on security and sustainability, while Ethereum has been more about speed and flexibility.

As with most things in life, there isn’t necessarily a right or wrong answer – it all comes down to your personal preferences and goals. Do your research, consult experts, and make an informed decision based on what will work best for you.

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