Cardano vs Ethereum – the ultimate crypto review
You may have heard people in the crypto space talk about Cardano vs Ethereum. They’re two of the largest cryptocurrencies right now, so it’s no surprise that crypto fans know about them. If you’re not into cryptos, you might wonder what’s the big deal. If you’re planning to invest, you will have to select your cryptocurrencies carefully.
Check CoinMarketCap, and you’ll see hundreds of cryptocurrencies. Most of them are promising in some way, but others are simply poor investments. This is why you must learn all you can before adding them to your portfolio. Since Cardano and Ethereum are popular choices, it’s best to know all about them.
Before we go into these specific cryptos, we will have to go through the basics of cryptocurrency. Then, we’ll cover this article’s namesake by comparing Cardano vs. Ethereum. More importantly, we will show you how to choose the right crypto investments. We will inform you about these coins, but it’s up to you to pick the right one.
How do cryptocurrencies work?
We cannot discuss Cardano vs Ethereum unless everyone’s up to speed with how cryptocurrencies work. It’s best to explain this by talking about bitcoin (BTC).
It came out in 2009 intending to provide a decentralized financial system. Instead of relying on banks or governments, it will use computers operated by regular people.
These are called miners, and they are connected via a blockchain network. What’s more, they validate transactions that use bitcoin, and each one is protected by encryption.
Miners must find the specific code that will let them confirm a transaction. The first to get the winning solution earns proof-of-work, add a new block to the blockchain, and earns BTC.
The way a blockchain confirms transactions is called a consensus mechanism. The one we just talked about is for proof-of-work (PoW).
Unfortunately, this process uses too much energy.
This is why other people made cryptocurrencies that consume less energy. They even made an alternative to PoW called proof-of-stake (PoS).
The old way allowed people to earn more cryptos if they had more processing power. As a result, they purchased upgrades that greatly increased energy use.
On the other hand, PoS lets you earn cryptos based on how much you’re holding. If you have a fast computer, you don’t get an advantage, so there’s no reason to get one for more earnings.
Cardano and Ethereum are often compared because they’re some of the largest cryptos that allow staking. That’s why people usually compare the two, just like what we’re doing right now!
What is Cardano (ADA)?
Let’s start with the first part of Cardano vs Ethereum. Cardano or ADA came from one of the co-founders of Ethereum, and Charles Hoskinson launched it in September 2015.
Hoskinson built it from the ground up using peer-reviewed research, and the Cardano Roadmap proves this. It has applied new upgrades such as smart contracts from the Goguen stage.
Smart contracts are agreements made using blockchain. They execute once certain conditions are met, and it doesn’t need a third party to do so.
This allows a lot of DeFi crypto features, including decentralized applications (dapps). What’s more, it takes 5-7 minutes to confirm transactions, and meanwhile, bitcoin needs 10 minutes.
At the time of writing, the price of ADA is $1.92. It has a lot of catching up to do with Ethereum. ETH is still at the number two spot, while Cardano sits at number five.
Read More: What Is “DeFi Crypto”?
What is Ethereum (ETH)?
Let’s now turn to the other side of Cardano vs Ethereum. Vitalik Buterin released the Ethereum blockchain in 2015, and it uses Ethers (ETH) as its native cryptocurrency.
Unlike Cardano, Ethereum already had the features it recently got, such as smart contracts and dapps. What’s more, it’s the main network for non-fungible tokens (NFTs).
These are digital media with ownership tied to a blockchain, allowing the owner to have a unique copy despite numerous ones available. Soon, many artists took an interest in NFTs.
It allowed them to earn more from their work. That’s why we have so many NFT art pieces nowadays. Yet, NFTs can come in other forms, even as the Twitter CEO’s first tweet!
As you can see, Ethereum has more use-cases than Cardano right now. What set ADA apart from ETH back then was its staking feature. However, Ethereum has it now!
If you have 32 Ethers, you can become a full validator on the blockchain. You’ll work like the miners you see in PoW cryptos like bitcoin, which most people may not be able to do.
When writing this article, an Ether costs $3,994.52, so 32 of those is $127758.40! You could just join a staking pool if you don’t have that much.
Staking is just one part of the Ethereum 2.0 upgrade. We will see more great things from the number two crypto. Cardano has a lot of catching up to do!
How do I choose between Cardano vs. Ethereum?
Cardano will get better as time passes, so it may beat Ethereum one day. Of course, Ethereum is also getting more upgrades almost every year.
You can only pick the best investment if you’ve figured out your goals. Ask yourself why you want to have these investments in cryptocurrency. Look at your short-term and long-term objectives.
Both of their prices are likely to go up after a few years. You could say this for the whole crypto market. Even lesser-known coins like SHIB are gaining value right now!
It’s hard to time cryptos for quick gains, though, and you’ll need to perform technical analysis to figure out when the coins will go up.
Then, you could go two ways with short-term investing.
- Setup sell orders – Once you know how high the price can go, place a sell order at that amount. This will execute once the price increases, so you earn from it.
- Hold a long position – This allows you to make money off the coin’s upward trend. As long as it’s going up, you keep earning. However, you might want to set a stop loss for your position, which prevents you from losing too much money if the price drops.
These methods aren’t easy to pull off, though. You will have to use market indicators to your advantage. Even if you’re skilled, you will still need a lot of luck to succeed.
That’s because so many factors could shift the prices, and you can’t monitor all of them. If you want to be on the safe side, you might want just to hold both Ethereum and Cardano.
While we focused on Cardano vs Ethereum, other cryptos continue to improve. For example, bitcoin’s recent upgrades are making it more eco-friendly.
Also, El Salvador is now mining bitcoin using geothermal energy. Since it’s the number one crypto, the others may follow in its footsteps, turning the market environment-friendly.
This article is for informational purposes. Research and plan your investments, and never use the money you are not willing to lose. Read other inquirer USA articles to learn more.
Use them to learn more about other cryptos besides Cardano and Ethereum. What’s more, you should see the many ways these digital assets are changing the world.
You may read about other conventional asset classes such as bonds and mutual funds. That way, you can have a more well-rounded and secure portfolio.
Cryptocurrencies are highly volatile, so the price trends may have changed by the time you’re reading this. Check other websites for real-time data.