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Table Of Contents
As the blockchain Dapp battle continues to expand, there has been a lot of debate regarding Ethereum (ETH) vs Cardano (ADA). Both of these platforms were built to support the expansion of Dapps by simplifying programming processes. Notably, Ethereum is the pioneer in the sector as it was the world's first successful programable public blockchain.
Recently, this gen-two blockchain has run into scalability issues. These concerns have fueled interest in alternatives in the market. Consequently, a lot of developers have started to migrate from Ethereum to Cardano in an attempt to avoid congestion and high fees.
What is Ethereum?
Ethereum is a distributed, public blockchain. However, people often use the term to describe Ether, the project's utility token. Ethereum has been pivotal to the overall development of the crypto market in many ways. Aside from introducing the market to smart contract functionalities, it is also the leading network for ICOs, DeFi, and token issuances in the world. Ether is currently the second most popular cryptocurrency according to CoinMarketCap.com.
What is Cardano (ADA)?
Cardano is a third-generation public blockchain and Dapp development infrastructure. The network was built to rectify some of the limitations and shortcomings of Ethereum. Uniquely, Cardano integrated a number of scientific methodologies to ensure the blockchain was secure and efficient. As such, the network has strong ties to the academic sector. Currently, Cardano's utility token, ADA, is one of the top cryptocurrencies in the world.
In terms of scalability, Ethereum lags behind Cardano. Ethereum's blockchain can handle around 15 transactions per second (tps) in its current state. However, the network is in the middle of a major upgrade that would significantly improve these capabilities. The Ethereum 2.0 update would provide users with 100,000 transactions per second according to company documentation.
In comparison, Cardano can support around 257 tps. While this is much faster than Ethereum, it still lags behind major payment processors like VISA that support +30,000 tps. Recently, the development team behind Cardano released a paper describing the network's next scaling solution. Hydra is a Layer 2 scaling solution that would enable Cardona to process over one million tps.
Ethereum relies on an early Proof-of-Work (PoW) consensus protocol to validate the state of the network. The protocol integrates the Ethash algorithm. At the time of launch, this was a huge deal because it provided more scalability than Bitcoin and reduced the use of ASIC (application-specific integrated circuit) mining rigs.
In the coming months, Ethereum will complete its migration from a PoW network over to a Proof-of-Stake (PoS) project. The migration will improve Ethereum's scalability and reduce its carbon footprint. Additionally, it will enable users to stake their ETH and earn rewards.
Cardano introduces a new consensus mechanism known as Ouroboros. Ouroboros is a chain-based PoS protocol that provides lightning-fast transactions. To accomplish this task, the system relies on randomly chosen leaders to approve blocks. The network will select these nodes at the start of each epoch.
Epochs function as a snapshot of the blockchain from a previous date. Using Epochs eliminates the need for nodes to search the entire transaction chain when approving the state of the network. The key to this strategy is to ensure that the epoch originates from a block sufficiently deep in the chain of transactions.
As a PoW network, Ethereum is reliant on miners to validate blocks of transactions and add them to the blockchain. Ethereum miners receive a reward of 2 ETH for their participation in validating blocks of transactions. These rewards are set to half over time like Bitcoin. Additionally, the mining difficulty of the network increases in conjunction with the network's congestion.
As a PoS, Cardano doesn’t rely on miners to secure the network. PoS networks enable regular users to validate the state of the blockchain by staking their tokens in network wallets. In this way, PoS networks provide a more democratic system to decentralized networks.
Cardano improves on Ethereum's development process with the creation of a full-stack programming environment based on Haskell, the leading functional programming language in the market. Developers can code directly in the Plutus Playground interface. This feature is a lightweight, web-based environment for exploratory ADA smart contract development. Notably, both off-chain and on-chain code for Cardano is written in Haskell.
Ethereum entered the market in a different era. In 2013, the concept of an ICO was still in its fledgling state. The firm secured $18 million from thousands of international participants. Ethereum went on to raise $150 million during its DAO (decentralized autonomous organization) ICO. At that time, this was the largest ICO to date.
In comparison, Cardano's ICO secured $62 million in 2017 during the height of the first crypto craze. The network received immediate attention due to the fact it was developed by Ethereum co-founders and academic professionals. Cardano entered the market officially on September 29, 2017.
Ether is the main utility token of the Ethereum networks. The token serves multiple roles within the ecosystem. Notably, Ether's primary role is to compensate miners for performing EVM computations. The more complex the equation, the higher the fee. Additionally, Ether can serve as a cryptocurrency. The coin has a circulating supply of 115,951,040.94 ETH. As the coin is vital for Ethereum's functionality and smart contract capabilities, there is no issuance cap on ETH at this time.
ADA is Cardano's utility token. Interestingly, the ADA token gets its name from the 19th-century mathematician, Ada Lovelace. Lovelace was the world's first computer programmer. Unlike Ethereum, Cardano has capped the issuance of ADA at 45 coins. There are currently 31.95 billion ADA in circulation.
Ethereum was founded by Vitalik Buterin. Buterin revolutionized the crypto sphere when he published the project's whitepaper in 2013. In the document, he explains how the EVM (Ethereum Virtual Machine) would function and provide programmability to the sector. He believed his new crypto would be a game-changer because it enabled the programming and use of smart contracts.
In comparison, Cardona entered service after the crypto market was in full swing. Specifically, Cardano launched during one of its most memorable bull markets in September 2017. Interestingly, Cardano Founders, Jeremy Wood, and Charles Hoskinson were both veterans of the Ethereum project. The two had left the network after disagreements emerged surrounding the overall direction of the project.
Additionally, the developers wanted to avoid some of the issues that Ethereum developers had started to experience due to congestion and the network's overall structure. To accomplish this task, the pair helped develop a number of innovations in language and VM design. These changes are what drive ADA's popularity within the development community today.
Ethereum's development is coordinated and implemented by a group of programmers. Specifically, the Ethereum development community includes the Ethereum Foundation, Hyperledger, Nethermind, OpenEthereum, and EthereumJS. Together, this team succeeded in creating the world's largest and most robust Dapp ecosystem of all time.
Cardano also relies on a group of developers to remain stable and introduce improvements to the network. Cardano leverages a decentralized team of developers that all work in tandem on projects. To ensure that all the new developments remain compatible, the groups have agreed to utilize set standards.
The Ethereum Foundation is a non-profit organization dedicated to supporting the Ethereum protocol. The group helps to cultivate more interest and the expansion of the platform. Notably, the Ethereum Foundation doesn’t provide financial assistance to projects directly.
The Cardano Foundation serves a very similar role within its respective ecosystem. The foundation is tasked with preserving and protecting the technology that powers the platform. As such, the group is responsible for vital tasks such as promoting standardization in the sector to further interoperability.
What's a Better Investment?
Now that you have a better understanding of the differences between Ethereum (ETH) vs Cardano (ADA), you are ready to start your crypto adventure. Both of these projects have thriving development communities and are regarded as premier projects in the market. Of course, Ethereum dominates the sector at this time. However, Cardano offers a combination of features and lower fees that have helped it to cut into Ethereum's market share as of late.
Moving forward, both of these projects have potential upside. Ethereum is set to remain a dominant force moving forward, especially following the completion of its Ethereum 2.0 update. Also, Cardano is set to see rapid expansion as more Ethereum developers expand their horizons into other blockchains in an attempt to avoid high fees and congestion issues. As such, it makes sense to hold both of these projects in your portfolio moving forward.
How to Buy Ethereum (ETH) and Cardano (ADA)
These are two of the most popular cryptocurrencies in the world. The exchanges below enable the purchase of both of these digital assets.
Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.
The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is a top exchange for USA residents. (Excluding New York & Washington state).
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