Ethereum is the ultimate and most mainstream solution to build smart contracts or DApps (decentralized applications). Since Ethereum went live in 2015, it has been the de-facto platform for anything related to smart contracts. Vitalik Buterin suddenly became very popular and worshipped in the crypto space. The ICO space in 2017, CryptoKitties in 2017, and now DeFi protocols in 2020 all were mostly created on top of Ethereum.
However, the fame of Ethereum also exposes huge vulnerabilities for the platform itself. Ethereum’s transaction fees have become very expensive, and the token transfers become too slow. Many crypto whales and average supporters start to look elsewhere in an attempt to find the next golden child of the cryptocurrency industry.
And then, there’s Cardano (ADA). This project was launched by Ethereum co-founder, Charles Hoskinson. ADA has become extremely popular in recent years despite the fact its smart contract ecosystem hasn’t gone live. People anticipate that Cardano will have a part in the crypto future. So, here’s the important question. Should you buy ETH or ADA? Which one is better? Let’s analyze both coins and ecosystems.
Ethereum As The De-Facto Smart Contract Platform
Let’s talk about Ethereum. The biggest advantage of Ethereum over its competition is simply its status as the “de-facto” smart contract platform. In other words, Ethereum has the first-mover advantage. Kinda like Bitcoin but in the smart contract space.
Even though Ethereum has problems with huge transaction fees and scalability, it remains the number one choice for most crypto traders who like to interact with smart contracts. Almost all popular DeFi protocols are still built on Ethereum, and many crypto traders are too ignorant to migrate to other platforms. They like to connect their Metamask wallet to Ethereum-based DApps instead of trying something new.
And this creates a “chicken and egg” situation where most people wouldn’t bother to use other platforms as long as nobody uses them. Ethereum will remain the king for the foreseeable future due to this factor. When everybody uses Ethereum, it will be hard to convince people to migrate and move to other platforms.
Another important factor to consider is that Ethereum 2.0 will introduce the concept of Proof-of-Stake to gradually replace its current Proof-of-Work consensus algorithm. While it takes forever for Ethereum to roll out the 2.0 upgrades, sooner or later we will get there eventually.
Cardano As One Of The Prime Alternatives
How about Cardano? Well, it’s smart contract platform isn’t live yet, but they expect to have their first DApp before the end of the year (2020). The enthusiasm around Cardano is pretty high. The coin was pumped pretty heavily when it introduced Shelley upgrade to its mainnet where people could finally stake their ADA coins.
Unlike Ethereum, Cardano utilizes what they call as Ouroborous Proof-of-Stake, which is the twisted version of Delegated Proof-of-Stake (DPoS). With Ouroborous, the transaction confirmation time should be able to be reduced. Things should be much faster and transaction costs should be way cheaper as well.
While there are other smart contract platforms that also attempt to dethrone Ethereum (i.e., Polkadot and Tron), Cardano has a more iconic battle with ETH. Since 2018 everybody has been praising Cardano’s effort to be the first peer-reviewed blockchain on the planet. Unlike EOS or NEO or Tron, Cardano took very careful approach to their development stages.
While Cardano is still largely untested without any DApp, its foundation is already perfect. It is very interesting to see where they will end up once developers start building on top of it.
ETH or ADA?
It’s a hard question. The safer bet as of now is still ETH, as it’s the second-largest cryptocurrency on the planet. However, ADA has been having a very good year, and it might bounce back to the top 5 crypto rankings once we start seeing a bunch of DApps on top of the Cardano blockchain. Which one will give you a better ROI? We can’t predict the future. However, both ETH and ADA are pretty big, and they are good options for your diversified altcoin investments.