Thinking from this point of view, a person can see how one cryptocurrency competes with another, just as Yahoo Search or AOL once was for Google. And that’s no more true than for the three cryptocurrencies competing to win in the “smart contract” space –
At the heart of all cryptocurrencies, including these three, is the algorithm that executes them. In fact, Ethereum, Solana and
These three cryptocurrencies can be traded on WazirX, the leading crypto exchange in India. One can buy Ethereum, Cardano, Solana directly with rupees.
Before we get into the differences, let’s talk about the big similarities.
What are smart contracts?
Smart contracts are what differentiates Ethereum, Solana, Cardano, and even Binance Smart Chain, from Bitcoin. In their algorithms, tiny pieces of code execute when certain conditions are met. In essence, they are “if, when, then” instructions that execute automatically.
Imagine a rental agreement, which says your rent is supposed to increase by 10% every 11 months. In the traditional banking system, you can set up a standing payment instruction where the rent amount is paid to your landlord every month, but you will have to keep changing it every 11 months, right? On a smart contract, the system will know that the rent has gone up and could theoretically increase the amount whenever requapplications smart contracts can be defined once on a blockchain platform, and they cannot be changed by anyone. Parties involved can put as many âif, when, thenâ conditions in place in a smart contract.
How do Ethereum, Solana and Cardano fit into the picture?
As mentioned earlier, smart contracts are one of the reasons Ethereum, Solana, and
Cardano the platforms are similar. The other is the fact that they used – or in Ethereum’s case, we will use – a âproof of stakeâ system. More on that later.
Unlike Bitcoin, which is best suited for applications involving the exchange of things, like paying for apps and services, smart contracts open up a world of possibilities. As a result, the three platforms mentioned above can be used to build
Think of it this way: the Bitcoin platform allows you to define situations via algorithms where you could take a Bitcoin and exchange it for something. On smart contracts, you can literally have a contract executed for and for the computers that process them, it’s just another transaction on the network.
Do you remember the example of Google? This basically means that platforms with smart contracts have a lot more features than those that don’t.
Ethereum – the origin story
Bitcoin is, and always will be credited for the introduction
In 19th century science, ether was considered a lightweight, frictionless material that filled all space and carried light waves. Although this theory was disproved, Buterin’s idea for his platform was to be the same – the invisible medium that possibly powers every book in the world, according to the 2020 book by former Bloomberg journalist Camilla. Russo,
The infinite machine.
The introduction of smart contracts made Ethereum different from Bitcoin and answered one of the questions critics were asking at the time – why cryptocurrency? Bitcoin was an alternative to world currencies, Ethereum was an alternative to that and everything in between. It gave developers a way to take advantage of blockchains and create things that didn’t have to make governments and central banks uncomfortable.
How is Cardano threatening Ethereum’s dominance in the market?
Ethereum has grown rapidly between its launch in 2013 and today, but despite all that was good, it had one big flaw – it ran on the proof of work system.
You see, crypto transactions are authenticated by computers, which are owned by large organizations called miners. These miners can only provide the computing power required to authenticate transactions and have no way of actually modifying the blockchain or the transactions that take place there. And for doing this “job”, they are rewarded with new cryptocurrencies by the platform.
Essentially, the platform is like a bank, miners are like Visa and Mastercard, and the bank pays Visa and Mastercard to authenticate the transactions their customers make around the world.
The problem with this is that Ethereum and Bitcoin reward every miner involved in a transaction, which means there is an overwhelming amount of computing power in every transaction. Instead, Cardano has what is called the âproof of stakeâ system, which is more efficient.
In this system, miners must first wager their own crypto to be eligible for the rewards. The platform then chooses the best miners – a predefined number – to authenticate transactions. As a result, the overall amount of computing power is greatly reduced, and in turn the amount of electricity required to power the computers is also reduced. All of this makes Cardano much more environmentally friendly than Bitcoin or Ethereum right now, and this is also true of Solana.
Why are Solana and Cardano called Ethereum killers?
The proof of stake system is the main reason why these two crypto platforms are called Ethereum killers. At the moment, they are more efficient and address the one big concern that many governments, pundits, and billionaires around the world have about cryptos – their environmental footprint.
However, Ethereum will introduce version 2.0 of the platform next year, which will also bring the same system to the platform. It is believed to reduce Ethereum’s energy needs by up to 99%. Last month, the Ethereum London Hard Fork paved the way for version 2.0, introducing the proof of stake system on the platform.
Platforms with smart contracts, like Ethereum, are expected to be adopted more widely, making environmental friendliness absolutely essential.
Who is likely to emerge victorious?
Needless to say, the two points in favor of Ethereum, Cardano and Solana are the fact that they will use or already use the proof of stake system, and that they offer smart contracts. The big issue with the Ethereum platform right now is scalability.
Every Ethereum transaction requires a transaction fee – also known as a gas fee – and it doesn’t matter what type of transaction it is. Right now, those gasoline charges can go up to $ 150 or more and are very volatile, due to the volume of transactions happening on the network every second.
Imagine building a chat platform, where every new message is a transaction. Could a business pay $ 150 for every message we, the users, send? Will users want to pay part of this cost? In comparison, transaction fees on the Cardano and Solana platforms currently cost a dollar or less.
âSolana solved this problem (the scalability problem) with a cryptographic time stamping system that can currently accommodate 65,000 transactions per second, which is amazing. No one came close, including Visa, âcrypto investment analyst Brett Hope Robertson told MoneyWeb.
On the flip side, as The Motley Fool explains, the problem with Cardano and Solana is adoption. Both of these currencies have market caps that are less than half of Ethereum’s currently, which means they remain speculative for now. Whether you buy the ADA and SOL tokens or build an app on them, you’ll be taking a risk on a platform that only works in theory at the moment.
âRisk can be measured in different ways,â Meltem Demirors, chief strategy officer at Coinshares, told CNBC last month. âBut a lot of these assets are much riskier than bitcoin and ethereum,â he added.
Disclaimer: This is a sponsored article in partnership with WazirX.