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Comparing Cardano vs Ethereum is like comparing apples to oranges because Cardano aims to solve different problems to Ethereum.

For instance, Cardano is trying solve proof of stake mining issues whereas Ethereum is staying with proof of work. So you’re basically looking at two blockchains that are aiming for different things and have their pros & cons.

In this Cardano vs Ethereum article I will be going over the differences between Cardano and Ethereum.

Cardano

Cardano is a blockchain platform which offers a network for decentralized applications, smart contracts and side chains. Cardano was founded by Charles Hoskinson who also co-founded Ethereum. It has been made public since September 2017 following a lengthy development phase of around 2 years. Cardano uses ADA as it’s cryptocurrency token where 1 ADA is worth $1.30 USD as of writing this. In terms of market capitalization, Cardano sits at 7th place just below SOL and BNB with an estimated $43 billion cap.

Ethereum

Ethereum is a blockchain platform that is aimed at decentralizing the web using smart contracts. Before Ethereum was created, Bitcoin had already paved the way but Bitcoin is limited in what it can do. Bitcoin can only be used as a currency whereas Ethereum allows for multiple use cases. It has been live since 2015 and uses ETH (ether) as it’s cryptocurrency tokens where 1 ETH equals $3,300 USD at time of writing this. In terms of market capitalization, Ethereum sits at 2nd place just above BNB with an estimated $402 billion cap according to CoinMarketCap.

Proof of Work vs Proof of Stake

Proof of work is one way to do verify transactions. Ethereum uses proof of work and relies on miners solving difficult problems to validate transactions for a reward. Proof of work is energy intensive and environmentally unfriendly compared to proof of stake, the other option for mining.

Cardano is seeking to be more energy-efficient than other cryptocurrencies based on proof of stake, since there are fewer environmental worries with this approach.

Proof of stake is where Cardano and Ethereum differ the most. With Cardano they will use a new protocol called Ouroboros whereas Ethereum is currently running on proof of work, which is used by bitcoin as well.

Ouroboros vs Ethash

Ethash is the hashing algorithm used by Ethereum and it has been created so that ASICs (specialized mining chips) would be less able to mine this cryptocurrency. This was done in order to try and keep things decentralized but since mining is becoming more profitable due to an increase in ETH value, we are seeing a huge amount of centralization happening around a few big players who have invested heavily into dedicated mining farms.

Cardano aims to solve this issue with their new protocol Ouroboros where Cardano is completely resistant to ASICs and is resistant to centralization with it’s novel approach.

This is the explanation from their site:

“Ouroboros is the first provably secure proof-of-stake protocol, and the first blockchain protocol to be based on peer-reviewed research. Ouroboros combines unique technology and mathematically-verified mechanisms – which, in turn, combine behavioral psychology and economic philosophy – to ensure the security and sustainability of the blockchains that depend upon it.”

Digital Assets

Ethereum and Cardano both have a native digital asset. ETH is Ethereum’s native token and ADA is Cardano’s.

The ETH token is used to pay transaction fees on the Ethereum network. The ADA token is used for Cardano’s Settlement Layer. With Cardano, users can send and receive ADA or tokens/assets which are standard ERC20 tokens.

What are Smart Contracts?

Both Cardano and Ethereum allow for the creation of smart contracts which are scripts that will execute when certain requirements are met like triggering an event or sending/receiving cryptocurrencies.

A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible.

It is possible to set up smart contracts so that payments in cryptocurrencies are released when certain conditions are met such as an expiry date or hitting a particular price with ETH/BTC acting as the currency for this transaction.

Transaction Speeds

The transaction speeds on Cardano are significantly faster than Ethereum which currently takes 15 seconds to complete a transaction while Cardano takes just 5 second to do the same thing.

The network congestion combined with high fees and disorganized development creates many challenges for Ethereum.

Cardano vs Ethereum final thoughts

In conclusion, Cardano and Ethereum are both excellent projects that will undoubtedly change the world of cryptocurrencies. In terms of what is better Cardano or Ethereum I believe they both have their advantages and disadvantages. Although Cardano focuses more on being eco-friendly with proof of stake and is resistant to ASICs, Ethereum has a much larger user base and has an easier time recruiting developers as well as bigger community support.

In my opinion Cardano sounds a lot better in theory but it still has a long way to go before we will be able to safely say that Cardano has done away with the possibility of exploits and vulnerabilities.

CryptoWhat
CryptoWhat was created in 2015 and has become one of the most trusted and well-respected sources of information on all things crypto. The blog's authors are dedicated to providing clear, concise, and jargon-free explanations of this complex technology, so that everyone can understand it.