There are speculations by groups of De-Fi enthusiasts that networks like Cardano will be bigger than the Ethereum network in the long run. Others project that the Ethereum momentum will eventually slow down, allowing new networks to overtake it. It’s predicted that institutions will adopt networks like Cardano as a result of this. However, Ethereum loyalists, on the other hand, maintain that Ethereum is here to stay and that this is only the beginning. They predict that Ethereum will eventually become the crypto world’s poster child, with its network becoming the industry standard.
How about some analysis that would shed some light?
Ethereum launched in 2015, and about two years after that, Cardano launched. They both have similarities in that they are both digital currencies that have a programmable ecosystem. Their respective founders both worked on the development of Ethereum before Charles Hoskinson left Ethereum to begin developing Cardano. Cardano prides itself as a peer-reviewed platform developed through evidence-based methods. Cardano aims to solve the issues plaguing Ethereum, like scalability.
Ethereum, on the other hand, is more of a big brother. This means that it is more popular and more trusted. Development in Ethereum moves faster as it is not peer-reviewed like Cardano. However, Ethereum’s selling point is the deployment of smart contracts, which have not been built into the Cardano network to date.
Ethereum and Cardano are both platforms with huge potential, aiming to solve the same problems, but have chosen to take different routes. The race that would determine which would be the bigger network will be largely determined by these two factors:
Deployment of Smart Contract
Smart contracts are self-executing contracts on the blockchain, with the terms of agreement between buyers and sellers being written directly into the lines of code. This means that smart contracts need no arbiter to fulfill contracts, as long as the requirements for the contract are met, the program executes itself. Now the blockchain can execute deals as opposed to just recording them, smart contracts make this possible.
Smart contracts are the backbone on which the NFT marketplace is built.
The Ethereum network prides itself as the paragon of smart contracts and this functionality gives it a slight edge over Cardano. However, Cardano is presently testing the usability of smart contracts on its network and hopes to launch fully before the year runs out. It is a likely possibility that Cardano gains momentum when this functionality is fully deployed on its network, and as a result, it might be more promising to have more skin in the Cardano game than the Ethereum game, except something changes for Ethereum.
What could that be?
See our next point.
Proof of Stake
In decentralized finance, transactions are recorded on the blockchain, these transactions are then validated as being genuine by a process called “Proof of Work”. This process makes sure that the system has not been tampered with, this is to avoid problems like double-spending or a fraudulent attack on the blockchain system. Ethereum makes use of the “proof-of-work” method to validate its transaction.
This method has come under fire and a lot of criticism lately due to the high amount of energy it consumes and has been described as not being eco-friendly. Cardano, on the other hand, opted for a different and much more energy-efficient alternative to validate transactions on its network, this alternative is known as “Proof-of-stake”. Proof-of-Stake is far more energy-efficient and as an extension more eco-friendly than Proof-of-work, it can process about 1 million transactions every second. This is another edge Cardano has over Ethereum, but not for long, as Ethereum plans to migrate to ETH 2.0 that will see Ethereum drop Proof-of-work, and adopt the much more efficient Proof-of-Stake.
What these differences will mean.
Cardano incorporating the smart contract functionality and Ethereum adopting Proof-of-work means both Cryptos will stack up evenly against each other. The winner, in the meantime, would be determined by who can implement these upgrades with minimal technical issues. However, we should not forget that Ethereum was here first and has earned more trust over the years, and it also has more users who might be reluctant to ditch what they already used to, for a new network. Still, from time to time, users get frustrated with the high gas fees that accompany transactions on Ethereum’s network as a result of congestion on the network. So, yes, we will continue to see more institutions gradually move on to other networks like Cardano.
The fact of the matter is; they are both solid blockchain ecosystems that will still go on to be the building ground of great things. Also, the crypto sky is big enough for all to shine. Yet, if I were to be a betting man, I’ll go all-in on Ethereum.
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