Cardano Vs Ethereum: How These Two Platforms Match Up
When discussing the blockchain industry’s top platforms and cryptocurrencies, Ethereum and Cardano are among the first that come to mind. While they share many common traits — both feature smart contracts, are powered by well-performing cryptocurrencies (ETH and ADA), and had Charles Hoskinson among the founders — they are also quite different, especially from a technical and design standpoint.
This article will provide an overview and comparison between the two platforms while covering the following topics:
- Ethereum Overview
- Cardano Overview
- Ethereum: Technology and Future Developments
- Cardano: Technology and Future Developments
- Ethereum and Cardano side by side
- ETH and ADA: Price History
Ethereum is a blockchain-based, open-source software platform that provides developers with tools to develop smart contracts and decentralized applications (dapps). As stated on its official website, Ethereum’s vision is to build “a more globally accessible, more free and more trustworthy Internet.” Today, Ethereum is the platform of choice for the creation of alternative coins (altcoins) and smart contracts, bringing tokenization and trustless transactions to a wide variety of industries.
The project was initially described in 2013 in Bitcoin Magazine by Vitalik Buterin — who was only 19 at the time — as a result of his work and research in the Bitcoin community. Buterin argued that Bitcoin needed a scripting language for decentralized application development. Failing to garner support from the Bitcoin community, the young programmer proposed the creation of a new platform.
The Ethereum project was publicly announced in January 2014 by Buterin and Ethereum’s core team at the time (Mihai Alisie, Anthony Di Iorio, and Charles Hoskinson). The development of the platform started in the early months of the same year and then launched in August 2015.
Cardano, like Ethereum, is also a public and fully open-source programmable blockchain with plans to support smart contracts and dapp development.
Cardano was first conceptualised in 2014 out of the need to tackle and improve on the main issues of older blockchains: scalability, security, governance, and interoperability with traditional financial systems. Cardano was released in late September 2017 and ADA became available for trading on October 1, 2017.
The vision for Cardano’s platform is to strike a balance between the needs of users and those of regulators — combining privacy and sensible regulation — with the ultimate goal of providing open, inclusive access to fair financial services.
Describing itself as a 3rd generation blockchain, Cardano is the industry’s first platform supported by an academic community of global researchers and scientists contributing to and developing its blockchain protocol. Here you can find Cardano’s research papers, some of which, like the one describing Ouroboros (the platform’s mining algorithm), are academically peer-reviewed.
Three organisations are supporting the development of Cardano: the Cardano Foundation, IOHK and Emurgo.
The first organization, the Cardano Foundation, is an independent standards body based in Switzerland, established to focus on the community of Cardano users and to work with authorities on regulatory and commercial matters. The second, IOHK, is a top cryptocurrency research and development company led by Charles Hoskinson, which holds a contract to develop the platform until 2020. Finally, Emurgo, is an organization that invests in startups and assists commercial ventures to build on the Cardano blockchain.
At the core of Ethereum is the Ethereum Virtual Machine (EVM), a Turing complete software that enables anyone to develop and run — given enough time and memory — thousands of different applications all on one platform. In short: with Ethereum, any centralised service can be decentralised without having to develop a whole new blockchain.
Another revolutionary feature of Ethereum is Smart Contracts. While the term was originally coined in 1996 by Nick Szabo, Ethereum is the first platform on which these protocols containing self-executing and self-enforcing contractual instructions became widely used and adopted. On a much larger scale, one or more smart contracts can power so-called Decentralised Autonomous Organisations (DAOs). DAOs’ processes are written entirely in code — allowing for operations to run transparently and completely independent of any human intervention.
To reach its full potential, Ethereum needs to tackle a few big challenges such as scalability and cost-efficiency.
Ethereum is currently in the 3rd of the project’s 4-stage development process, called Metropolis. With Byzantium — Metropolis’ first phase — recently completed, next up for Ethereum is Constantinople.
In the overall attempt to make the platform lighter, faster, and more secure, the Ethereum team is planning to introduce the following:
- Casper: a consensus protocol upgrade aimed at transitioning Ethereum from a proof-of-work (PoW) algorithm to a more computationally cost-efficient mechanism, consisting of a combination of proof-of-stake (PoS) algorithm and Byzantine fault-tolerant consensus theory
- Sharding: a process where the blockchain is split into smaller chunks or shards, allowing nodes to only store and compute certain shards rather than the whole blockchain
- Plasma: a process allowing for the creation of many separate but interconnected blockchains, therefore preventing nodes on the network from having to confirm and verify every single transaction
Cardano is a full blockchain developed from scratch in Haskell, a functional programming language similar to math, that allows for more precise code and more reliable protocols.
Cardano plans to improve on areas where 1st and 2nd generation blockchains struggle by implementing unique approaches to network structure and consensus:
- Cardano is designed in layers. By separating transactions and accounts from computations for smart contracts, the protocol is meant to be more easily upgradable and much more flexible. Cardano’s two layers are: the Cardano Settlement Layer (CSL), home of ADA and the balances of user accounts, and the Cardano Control Layer (CCL), where smart contract functions exist and regulatory elements like digital identity can be supported.
- Cardano enables consensus through Ouroboros. Ouroboros is the PoS consensus algorithm at the heart of Cardano. In contrast to PoW, PoS systems allow for consensus to be reached by coin-holder vote. Ouroboros comes with a peer-reviewed mathematical proof of security and is, according to Hoskinson, the most efficient consensus protocol in cryptocurrency.
Having released in September 2017, the project is still at an early stage. Cardano is currently in development stage Byron, or the bootstrap phase, where the focus is on code improvements, design of Daedalus (Cardano’s wallet), and simplification of API integration.
After Byron is complete, Cardano’s development will move on to Shelley, a big release expected to happen in 2018. Shelley is planned to focus on decentralization and interoperability and will include:
- Release of Ouroboros
- Added incentives for running full nodes
- Wallet upgrade, including advanced security, multi-signatures, quantum resistant addresses, and checkpoints
- Release of on-chain voting system
- Trusted hardware feature allowing for off-chain payments
Following Shelley, Cardano’s development will continue with three more phases:
- Phase 3: Goguen, where the focus will be on sidechains, accounting model and smart contract development
- Phase 4: Basho, featuring performance improvements
- Phase 5: Voltaire, with scalability and assurance as main focal points
|Release date||July 30, 2015||September 29, 2017|
|Supporting organisations||Ethereum Foundation||Cardano Foundation, IOHK, Emurgo|
|Currency||Ether or ETH||ADA|
|Market cap (Feb, 2018)||$86,546,261,244 USD||$9,483,059,393 USD|
|Current coin supply||97,767,632||25,927,070,538|
|Est. coin supply in 2050||146,975,853||45,000,000,000|
|Mining algorithm||Ethash (PoW)||Ouroboros (PoS)|
|Blockchain programming language||Go, C++, Rust, Solidity||Haskell|
|Smart Contracts programming language||Solidity||Plutus|
|Block times (at the time of this article)||14.27 sec||<1 min|
Given the fact that Cardano was only released in September, 2017, it’s unsurprising that Ethereum has always been valued much more highly than Cardano (as shown in the table above).
That being said, Cardano has shown exceptional growth since its release. Cardano is currently the seventh largest cryptocurrency in the world, while Ethereum comes in at the number two position.
Ethereum has been — and still is — one of the biggest innovators in the blockchain industry. It essentially took a technology — the blockchain — that had only been concerned with value transfer and extended its use to include smart contracts and dapps. Still, the platform is facing important challenges which will have to be addressed in order for Vitalik Buterin’s vision to become a reality.
Cardano is the smart new kid on the block. With peer-reviewed code and a community of scientists working on the platform, Cardano shows clear plans to innovate its way to becoming a top blockchain platform. Much of Cardano sounds good in the abstract, but it remains to be seen if the team can bring their ideas to fruition.
Cardano seems to have all it takes to become a valid alternative to Ethereum, but it has only just begun its long development journey. Ethereum, on the other hand, is the current leader in dapp development and is about to make significant scalability upgrades. Will both platforms eventually come to a state of coexistence? Or will one make the other obsolete? It’s too early to say, but this much is certain: exciting times await ahead.
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