DeFi race: Cardano vs Ethereum - who takes the lead?

Cardano vs Ethereum is a well-discussed topic in today's rapidly evolving blockchain industry. Cardano is another blockchain solution and a reasonable attempt to revolutionize how cryptos are used today. The Cardano project focuses on regions with lesser blockchain and DeFi adoption, beginning with Africa and South Asia, while Ethereum follows a global finance direction. This comparison article provides a better understanding of similarities and differences between Cardano and Ethereum to help the readers decide which one is better suited for them.

Energy Consumption: Cardano uses a proof of stake (PoS) model requiring less energy consumption than other cryptos such as BTC or ETH, which use proof of work (PoW) consensus mechanism. 

Staking method: In Cardano's Ouroboros proof of stake algorithm family, the protocol allows users from across the globe to run network nodes and validate transactions according to their stakes in ADA tokens within 24 hours.

ADA cryptocurrency: Cardano is a technology that uses ADA as its cryptocurrency. The cryptocurrency was launched on September 29th 2017, which means it's too new to accurately compare metrics against other more established blockchain technologies like Ethereum or Bitcoin. That said, it's still a case study working noting of how decentralized technologies are coming into their own…and trying to differentiate themselves from each other. 

Cardano shares many features with Ethereum; however, there are some fundamental differences in philosophy between the two projects, which will be discussed here in an unbiased manner.

Cardano's key features include: 

- Cardano uses a proof of stake model requiring less energy consumption

- Cardano is the first to be peer-reviewed by third-party academics

- Cardano's PoS algorithm is the first to be peer-reviewed by third-party academics.

Cardano is built on scientific philosophy and peer-reviewed research, giving it a strong foundation for future development. The Cardano team is also committed to open-source development, meaning that Cardano is open to input from the community about how to build out Cardano. Cardano's future roadmap includes sidechains, which will allow Cardano users to better scale for their particular needs.

Application Development: Ethereum is built on smart contracts that can create faster and more secure transactions than other blockchain technologies like Bitcoin and Cardano without sacrificing the network's decentralization. Cardano is building their platform to be more scalable and flexible than Ethereum, potentially making Cardano a good alternative for decentralized application development. Cardano has not yet set out an official roadmap for the future, which may cause concerns about the project's long-term viability.

Supply: One thing Cardano does have going for it is that its token supply is low compared to Ethereum's. Cardano's total supply is 25,927,070,538 ADA, while Ether's total supply is 95,730,083 ETH. Cardano has a circulating supply of 25 billion coins and a maximum supply of 45 billion coins with about 50% of Cardano in circulation. 

Technology: Cardano has excellent potential for real-world applications while keeping smart contracts immutable using its Ouroboros Proof-of-Stake protocol and more scalable than Ethereum with security.

Cardano (ADA) is built with Scala, a functional programming language used primarily in academia for research purposes. Ethereum uses Solidity, which is similar in design philosophy to languages like JavaScript or Python. General computer science courses around the world typically discuss functional vs imperative programming when they cover theming concepts like Lambda Calculus (very interesting stuff!), Applicative Functors, Monoids etc.… Still, it's very important to understand that there are many fundamental differences between how ADA and ETH work, which will be evident as we look at them side-by-side.

As a result, Ethereum is generally easier to onboard developers familiar with web development languages like JavaScript, and Solidity is its primary language for writing smart contracts. On the other hand, Cardano requires an entirely different programming environment to build apps on top of their platform has a more "academic" feel about it – not a bad thing necessarily – but this may or may not turn off some people from using their technology.

This is a very important distinction because if you want people to use your blockchain/platform, they need to create applications on top of it quickly…and most programmers don't like yet another language to learn!

In other words, Ethereum has a significant first-mover advantage in terms of developer adoption.

History: Cardano was initially built as an open-source project under the name "Input Output Hong Kong" before being released as its own blockchain on September 29th 2017. It includes various academic disciplines, including cryptography, distributed systems and mechanism design to enable formal verification for their workflows. These are all topics you'll study if you attend a top tier computer science school like MIT / Harvard / Oxford etc.…

Ethereum's origins predate this with Vitalik Buterin (Cardano's co-founder) having published his white paper about what would eventually become ETH way back in 2013! Ethereum is perhaps more associated with crypto than ADA, but the "academia vs entrepreneurship" debate is one of degree rather than kind, with both originating in computer science research.

So if Ethereum was founded around the same time as ADA, why have people heard more about ETH? There are many reasons, mainly because it's the 2nd biggest cryptocurrency by market cap and has gone through countless ICOs that Cardano has not yet done. EOS, Tron, NEO etc., all launched via an ICO - for this reason, whilst they are often studied alongside ETH, Cardano should be studied alongside BTC instead.

Criticism: Cardano held its ICO without launching its coin from September 2015 to October 2017, where they raised over USD 63M in Bitcoin & Ether (ETH). One sceptic said the project had "raised more money than what they know what to do with". But it's important to remember, unlike its competitors who have held ICOs, that Cardano is not here to compete for market share or attract users. Instead, it wants to be a scalable, secure & interoperable platform on which other cryptocurrencies can build their applications. By being fully open-source, freely available, and an interlinked roadmap between itself and its competitors, there are opportunities for Iota / Monero / EOS etc., to become first-class inhabitants on the blockchain ecosystem whilst still retaining their unique value propositions.

Another criticism levelled at Cardano is its governance system of using a decentralized voting process - through tokens are staked in Daedalus Wallet - to let ADA holders vote on the blockchain's future. There are numerous issues with this that we won't get into here. Still, it speaks of the earlier point about academics vs entrepreneurship because most people would probably disagree that you can use what they see as a decentralized, public ledger for something like governance.

Price prediction: Even though long term price prediction is a futile exercise, we could see Cardano having the potential to potentially become one of the top 3 coins by the market cap. At the time of writing this article, Cardano clocked in at a $26B market cap while Ethereum sits at $570B. 

Conclusion: The Cardano cryptocurrency is still in its infancy, so it's hard to compare any metrics against other more established cryptos like Bitcoin or Ethereum. We can't really say for sure what the future holds for ADA and whether it will be able to compete with these older coins that have had time to establish themselves as trustworthy digital currencies. What we can say is that this new coin has some promising features on paper (like their Proof of Stake algorithm). So far, they've been peer-reviewed by third-party academics, which means there may be something worth investigating if you're looking into investing in cryptocurrencies. It can take a while before we see how well this crypto performs when put up against the big guys like BTC or ETH, but it's definitely not something you should ignore.