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Cardano and Ethereum are two powerful examples of blockchains that have attracted a lot of attention over the years. This has made individuals compare them especially because the founder of Cardano, Charles Hoskinson, has participated in the development of the two networks. Other than this, people also wanted to discover which platform is better, especially since both Ethereum and Cardano have improved their smart contract capabilities and host a large variety of dApps.
Cardano and Ethereum are great examples of blockchain with important digital currencies. For instance, Ether (ETH) is the native token of Ethereum and the second largest cryptocurrency by market cap. In the Cardano Ecosystem, ADA is the cryptocurrency that powers this network. ADA is used for all Cardano applications and services. One of the best advancements of ADA is that it is more efficient and scalable than Ethereum, and it also has lower transcription fees. The ADA price prediction shows that analysts are optimistic about the future of this digital coin, as its price is expected to grow.
In this article, we will compare Cardano with Ethereum and explore the main differences. Keep reading to learn more.
What is Ethereum?
Ethereum was developed in 2015 with the goal that this platform and digital coin could overcome the shortcomings of Bitcoin (BTC). Vitalik Buterin proposed ways in which Bitcoin could improve its services, but the Bitcoin team didn't approve these changes. This made Vitalik Buterin want to launch its own crypto project, Ethereum.
He envisioned Ethereum as a decentralized platform that could support several dApps and transactions without needing intermediaries. When it was first launched, Ethereum operated with a Proof-of-Work (PoW) consensus mechanism. Still, then it transitioned to a Proof-Of-Stake (PoS) model to solve some shortcomings, including the high electrical consumption needed in the mining processes. Thanks to this transition, Ethereum has transformed into a greener solution while also improving scalability.
Ethereum prioritized the use of smart contracts that execute themselves when the conditions written into the code are met. This is why smart contracts eliminate the need for a central authority like a bank or government.
What is Cardano?
Charles Hoskinson developed Cardano as a third-generation platform that could solve the shortcomings of the first and second blockchain networks, like Ethereum and Bitcoin. Thanks to this, Cardano is more scalable and secure and can be adopted more easily. ADA is the native token of Cardano, which functions with a PoS consensus algorithm to provide high efficiency and network security. In addition, Cardano employs an original mechanism called Ouroboros that improves security.
Cardano vs Ethereum: Main differences
Historical context
Ethereum was launched in 2015 by many co-founders after Vitalik Buterin had the idea to create a platform that could expand Bitcoin's capabilities. Ethereum introduced smart contracts, which are self-executing contracts with the terms of the agreement written into the code.
Cardano was launched after Ethereum in 2017 by Charles Hoskinson, who also participated in the development of Ethereum. Previously, Charles Hoskinson had a different view on the direction of Ethereum, so it launched a third-generation platform. Before founding it, Cardano adopted a research-driven and academic approach to help it flourish in the best ecosystem.
Consensus mechanism
The two platforms also differ in their consensus mechanism. For instance, when it was first launched, Ethereum employed a PoW consensus mechanism, taking this example from Bitcoin. However, over the years, Ethereum went through several changes to improve its features, and it transitioned to a PoS consensus model to be more stable and reduce electrical consumption.
Cardano has a unique consensus mechanism called Ouroboros and a PoS model. Ouroboros uses mathematical security to select its blockchain validators while also offering a fair chance to all participants.
Token utility
Both Ethereum and Cardano host their native tokens, represented by Ether and ADA. Ether is the second-largest cryptocurrency by market cap, and participants can utilize it for various use cases, such as transactions or accessing Ethereum services. Additionally, the platform compensates users in the form of ETH if they choose to stake their digital coins and validate transactions.
ADA is Cardano's native token. Similar to ETH, it facilitates transactions on the blockchain platform and is also used as a reward.
Transaction speed
ETH and ADA differ in terms of transaction speed. ETH can usually process around 30 transactions per second, with the goal of reaching 100,000 transactions per second (TPS). Cardano wanted to offer more transactions per second so it could process about 250 TPS. This fact occurs thanks to its consensus mechanism, called Ouroboros, which has been designed to process a higher throughput.
Do Cardano and Ethereum have something in common?
Even though there are many discrepancies between Cardano and Ethereum, there are also some similarities that unite the two platforms. Both these examples are great examples of powerful decentralized networks powered by two important cryptocurrencies, ETH and ADA.
Cardano and Ethereum offer a prosperous environment in which developers can create decentralized applications and employ smart contracts capabilities. Other than this, another similarity between these two examples is the fact that they both function with a PoS consensus mechanism. The PoS model has attracted more popularity lately, as, in comparison with the PoW, it doesn't consume a huge amount of electricity. Bitcoin is a cryptocurrency that still functions with a PoW consensus model, and users have criticized this approach for the negative consequences it brings to the world.
How do these platforms seek to improve in the future?
Both platforms are looking for new upgrades to improve their current offerings and address their shortcomings. For example, with new upgrades, Ethereum wants to enhance its security, scalability, and sustainability problems. With new updates, Ethereum could attract even more users to its platform. Cardano wants to attract more participants in the future by having meaningful partnerships and fostering better dApp development.
Cardano and Ethereum are two powerful networks that leverage blockchain technology to offer new, improved solutions to individuals worldwide.