The “crypto economy” has exploded in recent years, creating an enormous amount of wealth in the process. But few blockchain projects have generated as much excitement as Cardano (CRYPTO: ADA) and Solana (CRYPTO: SOL), which rank as the seventh and eighth most valuable cryptocurrencies, respectively.
Cardano and Solana aim to improve Ethereum’s scalability issues by creating an open ecosystem of decentralized software and services. Both blockchains have great potential and both cryptocurrencies could make big long-term investments, but it is almost certain that one will outperform the other in the years to come. Which ?
Cardano is a smart contract platform powered by ADA coin. It was launched in 2017 by Ethereum co-founder Charles Hoskinson and features the only peer-reviewed consensus protocol in the industry: Ouroboros. It is a smart name. Ouroboros is an ancient symbol of infinity that appears in different cultures and depicts a dragon eating its own tail. In the context of Cardano, the name alludes to the highly scalable and sustainable nature of the platform.
Specifically, Ouroboros is a type of Related: Bitcoin, Ethereum and Dogecoin are expected to remain stable ahead of the Lunar New Year: is it time to buy these cryptocurrencies?.Proof of Stake (PoS) consensus mechanism., which means validators compete for the right to verify transactions (and earn rewards) based on their participation in the network. By comparison, Ethereum relies on proof-of-work consensus, an energy-intensive solution that pits miners against each other based on their computing power.
Cardano’s evidence-based approach is a key element of its attraction. The team of developers often publishes peer-reviewed research detailing the technical specifications of the blockchain, and the project itself is divided into five phases: foundation, decentralization, smart contracts, scalability and governance. As part of the third phase, Cardano launched support for smart contracts in September 2021. Although the ecosystem is still in its infancy, hundreds of projects are in the works, including a number of decentralized applications (dApps) and decentralized financial services ( DeFi).
Next, Cardano will address the issue of scalability. The network currently supports 250 transactions per second (TPS), with a completion time of two minutes. For context, this is much better than Ethereum’s 14 TPS and six-minute finalization time. But that’s not much compared to Visa’s theoretical 24,000 TPS.
To increase scalability, Cardano’s developer team is working on the implementation of Ouroboros Hydra, an update that will allow for more sidechains (i.e. additional blockchains that distribute the computational load more efficiently). This update could happen as early as this year and could theoretically increase the flow to 1 million TPS while allowing for near instantaneous finality.
Solana is a smart contract platform powered by the SOL coin. See the article: Unusual: You can buy this rock legend’s mansion with … cryptocurrencies.. It was launched in 2017 by former Qualcomm software engineer Anatoly Yakovenko and features a mechanism for consensus mixing PoS and proof of history. Specifically, Solana timestamps incoming transactions, creating a verifiable order of events, which accelerates network throughput.
Solana can theoretically handle 50,000 TPS and these transactions are finalized in just 13 seconds. This incredible scalability helps keep network costs low. The average transaction on Solana costs a fraction of a cent, much less than the $ 0.44 currently charged on Cardano and orders of less than the $ 20 you might expect to pay on Ethereum. In short, the Solana blockchain is already fast and cheap, and this has led to significant adoption.
The platform has more than 1,300 blockchain projects, including dApps like Magic Eden and Solanart, the fifth and sixth most popular non-fungible token (NFT) marketplace by total number of traders. Solana is also the sixth largest DeFi ecosystem, with $ 8.7 billion invested in blockchain. It just launched Solana Pay, a platform that will allow consumers to send digital payments to merchants using stablecoins such as USD Coin, a cryptocurrency pegged to the US dollar price. Since Solana Pay is powered by blockchain technology, it eliminates the need for banks and credit networks, which means merchants are charged a fraction of a cent for transactions.
Cardano and Solana are both blockchain projects See the article: Mark Zuckerberg’s Facebook cryptocurrency project: a bank buys intellectual property!.innovative that could disrupt the modern software and financial services industries. Additionally, each platform has unique features that have created loyal fan bases.
However, Solana is faster, cheaper and more developed. Its ecosystem of dApps and DeFi products easily outshines Cardano’s and is in a better position to gain ground on Ethereum in the short term. This is all the more important as Ethereum has a scalability solution in the works, but it will not be operational until 2023. For this reason, Solana appears to be the best investment right now.