Cryptoinvestors and experts are considering whether Cardano can replace ETH and take second place in the cryptocurrency rankings.
Cardano is currently in 3rd place. The market capitalization of Cardano (ADA) is $ 70 billion. Although it is still a long way from Ethereum (ETH), slow and certain growth could become a threat to Vitalik Buterin and ETH.
The benefits of Cardano
Cardano was formed on blockchain similar to BTC and most other cryptocurrencies. The founder is Charles Hoskinson, who also co-founded Ethereum in 2013.
Cardano is considered one of the most ecological cryptocurrencies. It even belongs to the TOP 5 list. For comparison, ETH uses approximately 20 to 25 terawatts annually. On the contrary, Cardano uses only 6 gigawatts per year.
Despite its low energy consumption, Cardano processes many more transactions than BTC and ETH combined. BTC processes approximately 5 transactions per second and ETH can process 15. Cardano can process up to 257 transactions per second. Cardano does not use a large number of nodes to verify transactions. Instead, it uses Proof of Stake, which reduces the number of devices needed to verify transactions.
Disadvantages of Cardano
Cardano’s main challenge is, in essence, the very existence of Ethereum. Hoskinson and his team are, of course, working on their project, trying to increase its value, but apparently in the Buterin team they are doing exactly the same. ADA plans to launch smart contracts and ETH plans to use the Proof of Stake model.
Changes are expected by the end of 2021. Once ETH launches Proof of Stake, Cardano will no longer be able to boast of its advantage. ETH, as is now the case with their competitor, will be able to perform more transactions per second and use less energy.
The lack of smart contracts also means that Cardano is less interested than ETH, which affects its progress. Developers will therefore continue to work on this innovative feature. This could eventually persuade several cryptoinvestors to switch to Cardano.
What chance does Cardano have?
Looking at market capitalization and price, Cardano has something to catch up with. Nevertheless, the difference between the market capital of ETH and ADA is around $ 330 billion.
ADA has grown by more than 1,400% in the last year, while ETH has increased its price by 330%. Nevertheless, the price of Cardano is quite small compared to ETH. 1 ADA currently costs $ 2.20 while 1 ETH is trading for more than $ 3,500.
The price is driven by the number of users, so popularity plays a very important role. It should be noted that the ADA was launched in 2017, while the ETH has been operating since 2013. It depends on the developers how the future of the cryptocurrency will develop and whether it will overtake its competitor. For now, however, it is very unlikely.