What is Ethereum?
Ethereum is a blockchain platform created in 2015 by a young developer, Vitalik Buterin, becoming the first ever project to enable smart contract development. Ethereum also allows users to send and receive coins as well as has its own native cryptocurrency Ether (ETH).
The Ethereum network is decentralized, meaning that it is controlled by a single entity, each transaction (including smart contracts) being verified by the community.
Ethereum is the platform that most startup projects launch their tokens for their ICO sale campaign.
What is Cardano?
Just like Ethereum, Cardano is a blockchain project which uses smart contract technology. It was developed in 2015 by the Input Output Hong Kong (IOHK) organization, led by Charles Hoskinson. Charles Hoskinson was also one of Ethereum’s co-founders, leaving the project as he believed he can create a better version of Ethereum blockchain.
While Ethereum is a second generation blockchain, Cardano calls itself a third generation blockchain.
Cardano also has its own cryptocurrency named the ADA coin and has a similar function to ETH, namely to send and receive funds, wallet-to-wallet.
Both platforms were designed to be used for dApp development and smart contract deployment. However, aside from these two similarities, the two blockchains feature significant differences.
The current consensus mechanism Ethereum uses is Proof-of-Work (PoW). However, Ethereum has plans of switching to Proof-of-Stake (PoS) sometime soon. Casper, Ethereum’s new PoS algorithm, will be implemented to try and solve the blockchain’s scalability issues.
Before completing the transition to PoS, Ethereum will employ for a temporary period a PoW/PoS hybrid for consensus. After the new PoS mechanism will be determined to be stable, the developers will set off a “difficulty time bomb” which will make Ethereum, in effect, impossible to mine.
Cardano uses a Proof-of-Stake protocol but utilizes the Ouroboros algorithm. Slot leaders are the entities able to verify transactions and generate new blocks in order to be qualified to become a slot leader, you have to hold any amount of ADA coins. To become a slot leader, the “Follow the Satoshi” algorithm has to choose a coin you own.
Ethereum was built using the Solidity programming language. The Ethereum team developed Solidity specifically to enable the creation of smart contracts which operate using the Ethereum Virtual Machine (EVM).
Unlike lots of other projects, which ‘fork’ the original code of a different blockchain, Cardano developed their own protocol by using Haskell and Plutus. Haskell is a functional programming language which is based on an advanced form of mathematics. Plutus is also a functional programming language, but unlike Haskell, it is an internal language developed by the Cardano team.
Cardano’s structure consists of two layers. The layers keep separated the accounting of the ledger from the computational part. This separation offers the end-user more control over the privacy and execution of their smart contracts.
The Cardano Settlement Layer (CSL) handles the settlements that occur on the blockchain, while the Cardano Computation Layer (CCL) is where the smart contracts are also included to connect transactions between the two layers. This multi-layer architecture permits soft fork to make updates easier than Ethereum does.
Ethereum currently has one layer, but scaling solutions in the form of a second layer are under development. Plasma is one of those solutions, which features sidechains similar to Bitcoin’s Lightning Network. These sidechains enable transactions without having to use up bandwidth on the main Ethereum chain.
Ethereum will also be implementing sharding as well to lessen the blockchain’s scalability issues.
As we mentioned before, Hoskinson worked with Buterin and other founders in creating Ethereum. After six months, the developers went their separate ways. The split was due to a difference in opinion, as the majority of founders argued that Ethereum should remain a non-profit project which should avoid venture capital fundraising.
Hoskinson believed otherwise. For this, the team had to instate some type of governance and develop a plan to generate profit. The project is also non-profit but considering its architecture, it has more flexibility right now for further implementations. Its team also believes that at some point cryptocurrency will be regulated similar to the financial services industry, and thus it will have to collaborate with venture capitalists.
Ethereum has a market cap of $10,106,581,125, which is much higher than Cardano’s $854,878,928, at the time of writing. Cardano has one of the biggest maximum supplies in the industry, 31,112,483,745 ADA, with Ethereum having no fixed supply, just a little over 100 million in circulation as of now.
At the time of writing, Ethereum is traded at $97.52, a seventh of its highest value of ~$1,400. Since the great crash at the beginning of 2018, Ether had its ups and downs, with the month of October seeing values that hovered around the 200$ mark.
Cardano peaked in January at $1.30 following the market momentum. The coin is experiencing a downward tendency, with its current price being situated at $0.032972. As no dApp ready platform has been launched yet, much of this pricing is speculative.
Cardano vs Ethereum Conclusion
There is a lot of active development on the part of both projects, some which will certainly lead to an appreciation in price for the platform’s respective coins.
With that being said, both Cardano and Ethereum have their own sets of pros and cons, making it quite difficult to exactly say which one will be more successful in the future.