Can the “Ethereum Killer” Live Up to the Hype and Take Down the Reigning Champ?
Article by Vi-Fi Edited by Kornekt & Hiro Kennelly Cover art by ab_colours
Ethereum is the undisputed king of smart-contract enabled blockchains. But when the Ethereum network gets busy, it becomes slow and expensive to use. These shortcomings have been the launchpad for several blockchain projects. These blockchains — dubbed “Ethereum Killers” — hope to displace Ethereum by providing alternatives that aim to make up for its deficiencies. One of these Ethereum killers is Cardano, and its potential (or lack thereof) to topple Ethereum has been the subject of a long-standing debate in web3. What is Cardano? How is this blockchain similar to or different from Ethereum? Can it really beat out Ethereum? Let’s find out.
What Is Cardano?
Cardano is a Layer 1 blockchain that, like Ethereum, is used to deploy decentralized applications. The blockchain’s development in 2015 was led by one of the co-founders of Ethereum, Charles Hoskinson, who believed there was a huge flaw in the design of existing blockchains. Cardano is meant to fix these flaws around scalability, interoperability, and sustainability.
Beyond solving these problems, Hoskinson also wanted to build a blockchain that, unlike Ethereum, was fully profit oriented — a position at odds with the Ethereum core developers that ultimately led to his exit from Ethereum’s team. All this led to his partnership with Jeremy Woods and the founding of IOHK (Input-Output Hong Kong), the blockchain company behind the development of Cardano.
The Cardano blockchain has a native cryptocurrency known as ADA. The coin was named after Ada King, Countess of Lovelace, popularly known as Ada Lovelace. She was an 18th-century mathematician who is often referred to as the mother of computer programming.
Ada Lovelace, circa 1840, the first computer programmer. Source
How Is Cardano Different From Ethereum?
From a high-level overview, Cardano and Ethereum look a bit similar, as they are both proof-of-stake blockchains that enable smart contracts and they even share a co-founder. However, looking more closely, these projects are very different.
Cardano vs Ethereum. Source
Consensus Model
Cardano is a proof-of-stake blockchain. It uses Ouroboros, a blockchain protocol developed by IOHK, which is said to be the “first provably secure proof-of-stake blockchain protocol and the first to be based on peer-reviewed research.” One of the benefits of using the Ouroboros protocol (and every other proof-of-stake system) is that it consumes 99% less energy compared to proof-of-work systems, making it more environmentally friendly.
Ethereum started as a proof-of-work blockchain, but after The Merge on September 15, 2022, Ethereum is now a proof-of-stake chain. The type of consensus mechanism is one characteristic of these blockchains where Cardano and Ethereum are similar.
Tokenomics
Like Bitcoin, Cardano’s native currency has a maximum supply limit. This means there is a fixed amount of tokens that can be minted — in the case of ADA, 45 billion. Some believe the token will become deflationary after the last ADA has been minted.
Ethereum’s native token, meanwhile, doesn’t have a supply cap, but after EIP 1559 and The Merge, ether is also expected to become net deflationary. In fact, since The Merge, Ethereum has had a number of deflationary blocks.
Staking
Cardano does something unique with its proof-of-stake consensus mechanism. Instead of having to lock up your stake like on the Ethereum network (which currently does not permit the staked ETH to be unlocked), ADA staked on the Cardano network is liquid, meaning there is no lock-up period. This allows stakers to come and go as they please.
It is important to note that with the Shanghai upgrade, expected in the first half of 2023, Ethereum stakers will be able to withdraw their staked ETH.
Choice of Coding Language
Smart contracts on Cardano are written using the Haskell programming language, which was published in 1990. It is a secure coding language that experienced programmers can use to create smart contracts on the Cardano network. Note, however, that Haskell isn’t as popular as other programming languages due to its relative difficulty and complexity.
While Cardano uses Haskell, Ethereum (which has crypto’s largest developer community by a good measure) uses an entirely new programming language, known as Solidity, for smart contract development on the network. Solidity is a programming language created for Ethereum, and it borrows heavily from Java, C++, and Python. It has become one of the most popular programming languages for building smart contracts on blockchains.
Transactional Model
Cardano uses an Extended Unspent Transaction Output (EUTXO) model, which essentially keeps track of individual transactions. Bitcoin, for example, uses a similar method to maintain its ledger.
Ethereum uses an Account Based Model, which is more similar to how most people think of bank accounts, a system that at its core is an account number and a corresponding balance. This model is efficient for memory usage and is also well suited for scalability and smart contract functionality. If interested, please read more on how the account-based model differs from UTXO.
The Future of Cardano and Ethereum?
Cardano’s developers claim to be committed to rigorous research and testing for its blockchain solutions. IOHK, Cardano’s parent company, has also made several real-world partnerships, including collaborations with the University of Edinburgh and the University of Wyoming. These partnerships have also been extended to the governments of countries like Georgia and Ethiopia, who are looking to build an ID verification and tracking infrastructure into their educational systems using IOHK’s enterprise solution known as Atala PRISM. Another unique collaboration is IOHK’s partnership with sneaker giant New Balance to use blockchain technology to ensure the authenticity of its sneakers.
IOHK has also released a roadmap for Cardano’s future, which includes five eras: Bryon, Shelley, Goguen, Basho, and Voltaire. Each era is centered around a set of upgrades that enable new products and features.
In some ways, Ethereum is just getting started on its roadmap. The Merge transitioned Ethereum from a proof-of-work consensus mechanism, like Bitcoin, to a proof-of-stake consensus mechanism, like Cardano.
The Merge is only the first of five stages to make Ethereum much more secure and scalable. During the viewing party for The Merge, Ethereum’s co-founder, Vitalik Buterin said, “This is the first step in Ethereum’s big journey towards being a very mature system, but there are still steps left to go.” Ethereum may already be far ahead of its rivals, but it still has a long way to go.
Closing Thoughts
As smart-contract enabled blockchains, Cardano and Ethereum have similar use cases, although they offer their utility through different means and will continue to tread separate paths. Ethereum is much more established in terms of user base, transaction volume, developer community, and smart contract functionality. Also, based on market capitalization, Cardano has a long way to go to catch up with Ethereum. ETH is currently the second-largest cryptocurrency by market cap behind bitcoin, and is nearly 20x that of ADA.
While Ethereum is ahead of Cardano on these metrics, Cardano is currently more scalable, with faster transaction processing times and lower fees. That said, Cardano has a long way to go to catch Ethereum. Fortunately, there’s more than enough room for multiple blockchains to help foster the web3 future.
Bios
Author
Vi-Fi is a web 3 enthusiast, writer and researcher. He is also a UI/UX designer with the passion to design products that meet users needs.
Editors
Kornekt is a writer and editor with strong conviction in the world Web3 creates.
Hiro Kennelly is a writer, editor, and coordinator at BanklessDAO and the Editor-in-Chief at Good Morning News. He is also helping to build a grants-focused organization at DAOpunks.
Designer
ab_colours is a versatile designer with over seven years of experience. He specializes in doing product design, UX design and brand identity. He has been DAOing for the past eight months and has been able to amass quite a lot of knowledge about the fascinating blockchain space.
BanklessDAO is an education and media engine dedicated to helping individuals achieve financial independence.
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This post does not contain financial advice, only educational information. By reading this article, you agree and affirm the above, as well as that you are not being solicited to make a financial decision, and that you in no way are receiving any fiduciary projection, promise, or tacit inference of your ability to achieve financial gains.
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