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- Polkadot Vs. Cardano
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As a responsible cryptocurrency investor, it’s wise to learn the key differences between Cardano (ADA) vs Polkadot (DOT). Both of these projects were designed to overcome some of the inherent shortcomings of Ethereum. As such, they both share a history with the coin. However, there are some crucial differences between these two projects that make them ideally suited for varying roles in the market.
What is Cardano?
Cardano (ADA) is a third-generation blockchain and cryptocurrency that focuses on Dapp development. Currently, the project is one of the most popular tokens in the market. Cardano is often referred to as the “smart crypto” because it incorporated a research-based, peer-reviewed approach to blockchain creation.
What Makes Cardano Special?
Cardano is unique because it was the first project to attempt to integrate blockchain creation with the academic sector. The entire network was built following the stringent scientific methods used when researching new theories and concepts. By utilizing evidence-based methods, the developers were able to overcome multiple problems faced by earlier cryptos. Today, Cardano stands as the first coin built on scientific philosophy, academic theory, and finalized through rigorous peer review.
What is Polkadot?
Polkadot is a multi-chain application environment, blockchain, and cryptocurrency. The network was built to streamline cross-chain interoperability with the overall goal to power next-generation Dapp development. For example, a Polkadot Dapp developer may choose to leverage Ethereum's security and another network's scalability. In this way, they can provide more functionality to users and integrate the best characteristics of each network.
What Makes Polkadot (DOT) Special?
Polkadot differs from the competition in many ways. Primarily, it’s one of only a handful of networks that enable users to communicate actual data across independent blockchains. This approach enables an entirely new approach to Dapp creation. For example, Polkadot developers can transfer data across public, open, private, and permissionless blockchains. The network was designed to remove the technical barriers from cross-chain processes. In this way, it simplifies the most common Dapp development tasks.
Polkadot was the first of these two coins to have its concept hit the market. The project's whitepaper was published in October 2016. Notably, Polkadot was founded by Ethereum co-developer, Gavin Wood. Wood played a vital role in Ethereum's development and rise. He was a core developer on the project until leaving to start Polkadot in early 2016. He also invented the Solidity smart contract programming language.
According to reports, Wood decided to leave Ethereum because he noticed technical limitations that would hold the project back. He set off to eliminate these issues and create a truly cross-chain network. He also wanted to integrate sharding into the blockchain to ensure that scalability concerns were never a problem again.
Polkadot successfully held an ICO on October 15–27, 2017. The event secured $145 million for the further development of Polkadot's ecosystem. Impressively, this was one of the biggest ICOs at that time. The record-breaking event helped to drive more interest in Polkadot.
Sadly, not all the attention they received was good. Around ten days after the ICO's completion, one of the core development teams behind Polkadot, EthCore, was hacked. The firm suffered huge losses totaling over $150 million. Worst of all, more than half of the funds stolen originated from the ICO wallet. Despite this drawback, Polkadot was able to recover and is in full swing today.
Cardano was also founded by former Ethereum developers. The blockchain's founders, Jeremy Wood and Charles Hoskinson, were both part of Ethereum's core development team. They split from the network in September 2017 to develop a new type of blockchain.
Mainly, the developers wanted to streamline Dapp development. They sought to integrate hi-tech innovations in language and VM design to accomplish this task. Rather than hire some other blockchain experts, the development team took the unusual route of seeking out the insight of academics. The project worked hand-in-hand with professors from universities around the world to incorporate peer-reviewed academic research into its design.
This strategy has helped the firm secure high-level partnerships across the academic and FinTech sectors. Cardano hosted a public crowdsale where it secured $62 million in September 2017. This funding helped drive development to new heights. On September 29, 2017, the Cardano mainnet went live.
What Problems was Cardano (ADA) Built to Alleviate?
Cardano was designed to solve a variety of problems that were facing developers in 2017. The network was built to “provide a more balanced and sustainable ecosystem that better accounts for the needs of its users as well as other systems seeking integration.”
What Problems was Polkadot (DOT) Built to Alleviate?
In comparison, Polkadot was designed to eliminate the compartmentalization of data in the blockchain sector. The network revolves around driving interoperability. In this way, Polkadot helps transform the blockchain sector from separate islands of data to an interconnected ecosystem.
How Does Cardano Work?
The Cardano Team is the group of decentralized developers responsible for keeping the network functioning properly. This group is comprised of three separate development teams. Each team operates as an independent entity when creating new Dapps. However, all the developers use preset standards to ensure that there is complete interoperability within the network.
The Cardano Foundation is the non-profit that backs the platform up. It provides financial support for promising projects or developments that considerably expand the network's reach or functionality. They also are tasked with promoting standardization to further interoperability.
As part of its educations aspect, Cardano integrates additional steps into its processes. Researchers are academics that spend their time examining blockchain networks to discover the core concerns and how to eliminate them. For example, the group might review new consensus algorithms and privacy protocols and how they could benefit Cardano users.
How Does Polkadot Work?
Polkadot combines four core users to enable its cross-chain capabilities. Nominators, Validators, Collators, and Fishermen all play a vital role in keeping Polkadot functioning. Here is how each of these nodes enables Polkadot to process thousands of transactions per second (TPS).
Nominators are the nodes that are responsible for securing the Relay Chain. They have a couple of responsibilities within the network. For one, Nominators must “nominate” trustworthy Validators. This task is accomplished by staking dots in the ecosystem.
Validators also help to secure the relay chain. Their primary responsibilities include staking dots and validating proofs from collators. They also play a critical role in the network's consensus.
Collators are nodes that maintain shards. Shards are pieces of data. Sharding enables networks to access data faster and enables nearly unlimited scalability. Collators collect shard transactions from users and produce proofs for the Validators.
Fishermen are another unique node only found in Polkadot's network. Fishermen operate as network monitors. They constantly scan the network to ensure that there are no bad actors or nefarious nodes in operation. Notably, Collators and any parachain full node can perform the fisherman role within the Polkadot ecosystem.
Cardano was the first blockchain to introduce the Ouroboros consensus mechanism to the market. This chain-based PoS protocol eliminates miners from the equation. Instead, a group of randomly chosen leaders approves blocks on the network. Interestingly, the system is designed to operate in epoch periods.
The system selects leaders from the stakeholder pool. These nodes are tasked with holding a snapshot of the blockchain from a previous date. This strategy enables the platform to verify up to the epoch date rather than the entire state of the blockchain. In this way, Cardano introduces the first “provably secure” proof-of-stake consensus mechanism to the market.
Polkadot also introduces a proprietary consensus mechanism called GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement). The protocol was built to enable developers to pool security. In this way, they can leverage network-specific protections and apply them to their own projects.
In terms of scalability, Cardano is capable of around 10 transactions per second (tps). While this may not seem that impressive, Hoskinson recently released a paper that describes how the integration of a Layer 2 scaling solution called Hydra could enable Cardano to process over one million transactions per second.
In comparison, Polkadot's sharded infrastructure makes it well suited for scalability. The GRANDPA consensus mechanism provides near-instant confirmation times. Polkadot is capable of around 1000 transactions per second without the need to utilize any other systems.
Cardano (ADA) vs Polkadot (DOT) Tokens
ADA is one of the most popular cryptocurrencies in the world. Cardano intends to issue 45,000,000,000 ADA in total. Notably, ADA's name originates from the 19th-century mathematician and world's first computer programmer, Ada Lovelace.
The DOT Token functions as the main governance, utility, and cryptocurrency for the Polkadot network. Users must hold DOT to interact with the features and services of the network. DOT holders can participate in the network's governance systems, including tabling proposals, voting, and bonding.
How to Buy Polkadot (DOT) and Cardano (ADA)
Both of these cryptocurrencies are extremely popular, we recommend the best exchanges based on your jurisdiction.
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).
If you would like to invest via an IRA it is also available on iTrust Capital.
Cardano (ADA) vs Polkadot (DOT) – Two Project with Potential
Now that you see the similarities and differences between these projects, it’s easy to see why they can get confused. They both originated from Ethereum team members and both seek to eliminate some of that platform’s limitations. However, a closer delve reveals that Cardano is geared towards providing an upgraded network for Dapp development, whereas, Polkadot seeks to enable developers to utilize other networks together to achieve more functionality. For these reasons, it’s not a bad idea to hold a little of both of these projects in your portfolio.
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