The ongoing expansion of the cryptocurrency market and the increasing acceptance of digital currencies by individuals and organizations have given rise to many rivalries between competing crypto assets. Bitcoin versus Ethereum is probably the most talked-about juxtaposition in the market for obvious reasons. One is the initiator and unparalleled leader of the crypto industry, and the other is the front-runner of the altcoin squad.
However, another interesting contrasting pairing is Ethereum versus Cardano. This goes beyond drawing parallels between Ethereum’s price action and the ADA price prediction. The two projects are often analyzed in comparison because they have a somewhat similar background and goals, and share various features, but have taken different paths to development.
Besides, Cardano is one of the very few altcoins that doesn’t look out of place when put side by side with Ethereum, so comparing the two makes perfect sense. Knowing how these coins relate and differ is all the more important for those who want to diversify their crypto holdings but only have place for one of these assets in their portfolios.
Ethereum and Cardano at a glance
Ethereum and Cardano are two powerful Layer 1 blockchains that have managed to carve a path in the crypto sector thanks to their strong fundamentals and bold objectives. They enjoy great popularity among investors and developers and have maintained their positions in the top ten largest cryptocurrencies in the market for many years now.
Ethereum ranks second, right behind Bitcoin, with a market cap of $192.12B, while Cardano occupies the tenth place with a market cap of $21.73B. Despite the notable value gap between them, both Ethereum and Cardano have proven their resilience numerous times, surviving several bear markets and registering notable gains over the years. This makes them similar in many ways, but upon closer inspection, the differences between the projects become obvious, particularly in terms of design and technical infrastructure.
Background and vision
Ethereum was the first to enter the crypto market in 2015, being created by a team of developers led by Russian-Canadian programmer Vitalik Buterin.
The project was inspired by Bitcoin but aimed to achieve much more than its predecessor. Buterin and his peers envisioned a blockchain that could do a lot more than simply facilitate transactions.
Therefore, they built the first platform that enabled the deployment of complex decentralized applications (dApps) through a groundbreaking smart contract functionality. The introduction of the Ethereum Virtual Machine (EVM) allowed the blockchain to execute advanced and flexible smart contracts, which led to the creation of an entire ecosystem of decentralized finance (DeFi) and non-fungible token (NFTs) projects around Ethereum.
Cardano, on the other hand, came into existence a bit later, being founded by American mathematician and entrepreneur Charles Hoskinson in 2017. The interesting thing about Cardano’s origin story is that it connects with that of Ethereum.
Hoskinson was one of Ethereum’s co-founders, but diverging opinions with Vitalik Buterin regarding the blockchain’s future caused Hoskinson to leave the project in 2014 and start a different venture that would allow him to put his own vision into practice.
This led him to establish the IOHK (Input Output Hong Kong) blockchain research company in 2015, which two years later developed Cardano, a third-generation blockchain based on academic research and peer reviews, and its native token ADA. Cardano’s purpose is to ensure interoperability in the blockchain space via sidechains and push the boundaries of blockchain technology by offering unparalleled scalability, security and processing power.
Technical features
The evolution of both blockchain platforms is nothing short of remarkable. However, while Ethereum focuses on fast progress by constantly upgrading its protocol with new improvements based on changing needs and demands, Cardano took a more systematic approach to development, resorting to extensive scientific research and rigorous peer assessments to ensure safe and steady progress. Ethereum is mainly focused on addressing scalability and throughput, the two biggest issues plaguing the network, while Cardano looks to expand its user base and advance its dApps ecosystem since it’s been lagging behind in these areas.
In terms of consensus mechanisms, Ethereum was initially based on a Proof-of-Work (PoW) protocol but switched to a Proof-of-Stake (PoS) system in 2022, during the Merge upgrade. Cardano employed a unique PoS mechanism known as Ouroboros from the get-go, being a trailblazer in this respect.
Smart contract capabilities are a common feature of the two blockchains, but here, too, there are notable differences to mention. Solidity is the programming language used to design and run smart contracts on Ethereum. Being a Turing-complete programming language means that Ethereum can execute any task as long as it has the necessary resources. By contrast, Cardano uses Plutus for writing smart contracts, which is based on Haskell scripting. This model ensures the accuracy and dependable execution of smart contracts.
Historical price performance
The way these two coins have evolved and performed over the years in terms of price and adoption is also an important aspect to look at for a more comprehensive comparison.
Ethereum
Starting with Ethereum, we can see that at launch time, the main altcoin had an initial price of $0.30. Its smart contract feature drew immediate attention from market participants and it wasn’t long until the asset started appreciating. By early 2016, Ethereum had already climbed to around $10, a significant increase for a coin that had been in the market for less than a year.
In 2017, Ethereum experienced its first bull market, which pushed its price to a whopping $1300. That’s when the general public started to gain an interest in crypto assets. Those who weren’t yet convinced of Ethereum’s potential realized that it could in fact become a strong contender to crypto leader Bitcoin. As expected, this surge attracted more attention from investors and bolstered Ethereum’s standing in the crypto market.
Between 2019 and 2020, Ethereum experienced a major decline in value due to the onset of the crypto winter, which affected prices across the board. During this time, the asset traded in a much lower range, between $100 and $300.
A new bull run came in 2020-2021, lifting all assets. Ethereum was one of the biggest winners, hitting its all-time high of $4,891 in November 2021. Since then, Ethereum, just like most cryptocurrencies, entered a period of decline in 2022, falling below $1000 at one point. However, the coin gradually recovered over the following years and is currently standing at around $1,500.
Cardano
Now, let’s take a look at Cardano’s rise to fame. While not as impressive as its forerunner, Cardano’s evolution also presents several moments of glory that helped the token rise to the top. There wasn’t much hype around Cardano’s launch in 2017, so the asset was worth only a few cents in its early days. Fortunately, the altcoin entered the market at a very opportune time, just in time for a bull run, so its value rose to $1.30 in late 2017/early 2018, driven by the larger market boom.
When the 2018 bear market came along, ADA’s price crashed, dropping below $0.05. For the next two years, the coin performed poorly, but then the crypto market surged again in 2021, and ADA experienced its first major breakout. The Alonzo upgrade, which added smart contract functionality to Cardano, helped the token gain even more momentum, and ADA reached its record high of $3.10 in September 2021.
Unfortunately, the hype was no match for the upcoming bear market, and ADA dropped below $0.30 in 2022. Cardano managed to gain back some of its lost value throughout 2023 and 2024 and is now trading at $0.61.
Governance
Decentralization is a core characteristic for Ethereum and Cardano, but they have different approaches in this regard as well. In Ethereum’s case, there is no formal governance structure or a central governing body to manage the decision-making process. Decisions are largely based on discussions among the platform’s core developers.
By contrast, Cardano has a structured and advanced governance mechanism known as Project Catalyst. In this system, ADA holders can participate in the governance process by proposing changes and voting on them, ensuring democratic and decentralized decision-making.
Bottom line
The idea that Cardano might one day overtake Ethereum has been a popular topic of debate in the crypto space for years. For the time being, the possibility of Cardano surpassing Ethereum seems highly unlikely given the huge value gap separating them. Ethereum is clearly more powerful and enjoys greater adoption than Cardano. However, there’s no telling how things might evolve in the long run.
So, to answer the question of which of these cryptos is better and would make a wiser addition to your crypto portfolio, it’s all a matter of personal preference and perspective. Both have strong and unique selling points, just as they have weaknesses and downsides.
It’s up to every individual to assess the positives and negatives of each project and draw their own conclusions. Ultimately, the decision to include a new crypto to an investment portfolio requires in-depth research of the assets in question and a clear understanding of one’s goals and risk tolerance.
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