Why Is Cardano often Compared with Ethereum; Cardano`s Price, the Similarities, and Differences Between these 2 Cryptocurrencies
Most cryptocurrencies are always seen as a competitor to another based on their usability, volatility, and scalability. In recent years, there has been a constant comparison between Cardano and Ethereum, this is because both cryptocurrencies share many features, and are two of the largest blockchain platforms in the world. This article explains in detail the reasons for this comparison, Cardano’s price, the similarities, and the differences between these two cryptocurrencies. You can check Cardano’s price and others at Bitvavo’s website.
Reasons for comparing Cardano with Ethereum
Cardano is mostly compared with Ethereum because they both have a history of sharing a founder. One of the co-founders of Ethereum, Charles Hoskinson, is the founder of Cardano. There was a bit of a disagreement between the co-founders of Ethereum, which led to Hoskinson deciding to establish his own new cryptocurrency company, which was called Input Output Hong Kong (IOHK). This IOHK company bootstrapped the development of Cardano, which we all know today.
Also, Cardano and Ethereum are usually compared because of the wide difference between Cardano`s price and Ethereum`s price. Cardano`s price is relatively low when compared to Eth`s price, even as their functions are quite similar. This in turn makes people more interested in investing in Cardano than Ethereum.
Cardano vs Ethereum
|Year of establishment||2015||2017|
|Cryptocurrency of the platform||Ether||Ada|
|Blockchain algorithm||Proof-of-Work (PoW) protocol||Proof-of-Stake Ouroboros protocol|
|Decentralized application (DApps)||Yes||Yes|
|Price||$1.24 USD||$3,912.38 USD|
|24-hour trading volume||$1,214,822,459 USD||$16,148,308,398 USD|
Similarities between Cardano and Ethereum
Cardano and Ethereum have more differences than similarities. These two cryptocurrencies are similar because they run custom programming logic, i.e., they are both smart contact compatible. The second similarity is that their application platforms are decentralized, hence, developers can use both Ethereum (ETH) and Cardano (ADA) for building connected programs. Therefore, ADA is now seen as an alternative to ETH.
The differences between Cardano and Ethereum
Although Cardano and Ethereum share founders and are both decentralized systems, they both have their differences. Some of which includes:
- Scalability: Cardano has fewer scalability issues than Ethereum. Cardano is scalable because it has a multi-layered framework that consists of a separate settlement layer and computational layer for transactions.
Ethereum has been making ways to resolve this scalability issue, and they were able to achieve this a little with their ETH 2.0 upgrade. But Ethereum still runs on Proof-of-Work (PoW) protocol, which still slows down their transactions.
2. Security: Cardano is more secure because it emphasizes its peer-review nature above all else. This is significant to the Cardano team because it emphasizes the importance of security. While Ethereum is a far less controlled environment with contentious upgrades (known as hardforks) and a chaotic token economy. While the Ethereum blockchain has been secure since the infamous DAO hack, many of the decentralized applications that run on it have not.
3. Smart contracts: Most blockchains are known to run smart contracts, and Cardano and Ethereum are also known to run smart contracts. Cardano does not currently have live contract features despite it being the fourth-largest cryptocurrency by market capitalization. On the other hand, Ethereum runs live smart contracts.
4. Market capitalization: Cardano is the fourth-largest cryptocurrency by market capitalization, while Ethereum is the second-largest cryptocurrency by market capitalization. Its market cap is currently at $509.58 billion, which is more than seven times the market cap of Cardano.
5. Blockchain algorithm: All blockchain platforms thrive on the blockchain algorithm used to create blocks and authenticate transactions. Cardano`s blockchain algorithm is different from that of Ethereum. Cardano uses a Proof-of-Stake Ouroboros protocol while Ethereum uses Proof-of-Work blockchain. Ethereum`s Proof of work blockchain requires more energy and resources to run it while Cardano`s Proof-of-Stake requires less energy and fewer resources to run it. Hence, this makes transactions carried out with Cardano faster and cheaper.
6. Price: Cardano’s price is much better when compared to that of Ethereum, and it is more affordable than Ethereum. Also, in the short and long run, it is more profitable than Ethereum. Both cryptocurrencies appreciate as the decentralized application market grows.
7. Although there is a consistent comparison between Cardano and Ethereum, both cryptocurrencies have their own functions and capacity. At the moment, the main difference between both cryptocurrencies is their blockchain algorithm, because Cardano’s Proof-of-Stake Ouroboros consensus protocol is more flexible than Ethereum’s Proof-of-Work blockchain. And Cardano`s price is much cheaper than that of Ethereum.
Can Cardano be considered an Ethereum Killer?
The truth is that Cardano cannot yet be considered an Ethereum killer because ETH is still very much alive and well as the dominant L1 in crypto. Furthermore, Cardano is lagging behind surging competitors such as Solana, which has seen rapid adoption in recent months. However, ADA has undoubtedly captured a sizable portion of ETH’s market share. Regardless, both platforms have room for expansion during this bull market.
It is difficult to predict whether ADA will ever surpass, let alone “kill,” ETH’s market cap. While the architecture and development approach used by ADA appears it still has a lot to prove in terms of smart contract functionality to be fundamentally sound. Another thing to keep in mind is that Cardano upgrades will take a long time to complete because each one is thoroughly processed and reviewed before being released. Ethereum is no exception, which means that we may have to wait a while for a response.
Nonetheless, Ethereum is in a bind as many users have grown wary of its slow and expensive network, especially when alternatives such as Cardano and others are growing quickly and eating into its market share. Although ETH remains the undisputed king of dApps, its throne is no longer unassailable.
Nonetheless, Ethereum remains at the top of the smart chain for a reason. If you’re an ETH holder who is nervously watching Ethereum progress toward 2.0. But as we know things might change with time.