Key Points
Cardano’s evidence-based approach to development differentiates it from other blockchain projects.
Solana is one of the fastest and cheapest smart contracts platforms in the blockchain industry.
The crypto economy has exploded in recent years, creating a tremendous amount of wealth in the process. But few blockchain projects have generated as much enthusiasm 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 upon Ethereum ‘s scalability problems, creating an open ecosystem of decentralized software and services. Both blockchains have plenty of potential, and both cryptocurrencies could be rewarding long-term investments, but one will almost certainly outperform the other in the coming years. Which one? Image source: Getty Images. 1. Cardano
Cardano is a smart contracts platform powered by the ADA coin. It was launched in 2017 by Ethereum co-founder Charles Hoskinson, and it features the industry’s only peer-reviewed consensus protocol: Ouroboros. That’s a clever name. The ouroboros is an ancient symbol for infinity that pops up in several cultures, depicting a dragon eating its own tail. In the context of Cardano, the name hints at the highly scalable and sustainable nature of the platform.
Specifically, Ouroboros is a type of proof of stake (PoS) consensus mechanism, meaning validators compete for the right to verify transactions (and earn rewards) based on their stake in the network. By comparison, Ethereum relies on proof of work consensus, an energy-intensive solution that pits miners against each other based on computing power.
Cardano’s evidence-based approach is a key part of its allure. The developer team frequently publishes peer-reviewed research detailing 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. And though the ecosystem is still in its nascent stages, there are hundreds of projects in the works, including an array of decentralized applications (dApps) and decentralized finance (DeFi) services.
Next, Cardano will address scalability. The network currently supports 250 transactions per second (TPS), with a finalization time of two minutes. For context, that’s much better than Ethereum’s 14 TPS and six-minute finalization time. But it pales in comparison to Visa ‘s theoretical 24,000 TPS.
To boost scalability, Cardano’s developer team is working to implement Ouroboros Hydra, an upgrade that will enable multiple side chains (i.e., additional blockchains that divide the computing load more efficiently). That update could occur as early as this year, and it could theoretically boost throughput to 1 million TPS while enabling near-instant finality. 2. Solana
Solana is a smart contracts platform powered by the SOL coin. It was launched in 2017 by former Qualcomm software engineer Anatoly Yakovenko, and it features a consensus mechanism that blends PoS with 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 those transactions are finalized in just 13 seconds. That incredible scalability keeps network fees low. The average transaction on Solana costs a fraction of a cent, much less than the $0.44 now charged on Cardano, and orders of magnitude below the $20 you might expect to pay on Ethereum. In short, the Solana blockchain is already fast and cheap, and that has translated into significant adoption.
The platform boasts over 1,300 blockchain projects, including dApps like Magic Eden and Solanart, the fifth- and sixth-most-popular non-fungible token (NFT) marketplaces in terms of total traders. Solana also ranks as the sixth-largest DeFi ecosystem, with $8.7 billion invested in the blockchain. It just launched Solana Pay, a platform that will allow consumers to send digital payments to merchants using stablecoins like USD Coin , a cryptocurrency that’s tied to the price of the U.S. dollar. Because Solana Pay is powered by blockchain technology, it eliminates the need for banks and credit networks, meaning merchants are charged a fraction of a cent for transactions. The better buy
Both Cardano and Solana are innovative blockchain projects that could disrupt the modern software and financial-services industries. Moreover, each platform has unique characteristics that have created loyal fan bases.
However, Solana is faster, cheaper, and more developed. Its ecosystem of dApps and DeFi products easily eclipses that of Cardano, and it’s better positioned to gain ground on Ethereum in the near term. That’s particularly important because Ethereum has a scalability solution in the works, but it won’t be live until 2023. For that reason, Solana looks like the […]
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