In July, Goldman Sachs said Ethereum could eventually overtake bitcoin. It now turns out that Cardano is giving ethereum a run for its money thanks to its immense growth potential. If these were to happen, Cardano could head straight to the top positions.
Cardano value has increased significantly, overtaking Binance Coin to become the third-largest cryptocurrency. Currently, Cardano has a market cap of $82,394,325,581, while the Binance Coin market cap is $80,315,716,074. Overtaking ethereum, which is the second leading crypto, seems next in line. In fact, Cardano is dubbed the “Ethereum Killer.”
Cardano’s growth is attributed to the plans to upgrade the virtual token to a new network known as Alonzo hard Fork. In addition, it is more environmentally friendly, and its debut on the Japanese market has only boosted the fervor. According to TradingBeasts’ Cardano future forecasts, ADA is predicted to double in value over the course of the next 2 to 3 years.
Cardano vs. Ethereum
Perhaps to give you a perspective of the emerging competition, it is imperative to examine Cardano and Ethereum. Ethereum was created in 2013, two years before Cardano was founded. It was vaunted as blockchain 2.0 after release.
But both have something in common. Cardano was created by Charles Hoskin, a co-founder of Ethereum. It is therefore not surprising that the cryptocurrency is posing a serious threat to Ether. In terms of functionality, both digital currencies are based on a programmable ecosystem that allows developers to build applications and other digital currencies on their networks.
Why Cardano Could Eventually Overtake Ethereum
Currently, the ethereum coin is trading at $3000, a thousandfold more valuable than Cardano which is valued at $3 a coin. Ethereum also takes the lead in the smart contract sector. Besides hosting colossal DeFi applications, 87% of ICOs have taken place in the Ethereum network.
Nevertheless, Cardano is growing and could eventually match Ethereum’s market capitalization if its value triples. This is pretty possible considering the current gains. Moreover, if it decouples, it would be at par with bitcoin, the most prominent cryptocurrency.
Here are upcoming developments that could propel Cardano above Ethereum.
Well Researched Developments
Cardano upgrades are peer-reviewed to ensure they are foolproof before release. The Cardano team conducts academic research to ensure the development methods are based on evidence. However, this slows down its development.
Cardano has announced plans to update its system to Alonzo hard fork. When the update plans were announced, the cryptocurrency hit new highs. It is the last update in the second stage of Cardano’s five eras of development. After this update, the virtual token will be ready for the next development stage called the Goguen era.
The upgrade paves the way for Cardano to support smart contracts. Smart contracts are self-executing computer codes that run when specific parameters are met. Therefore, developers will be able to create smart contracts and decentralized applications on the blockchain network.
Decentralized applications allow seamless use without third-party interference. For instance, users can trade, lend and borrow money instantly without waiting for approval from banks and other financial institutions. Similarly, insurance companies can pay up premiums automatically after certain conditions are met. Smart contracts are technology behind the decentralized apps and Non Fungible tokens.
Proof of Stake
Crypto transactions do not require third parties for data authentication. Ethereum and Bitcoin blockchains use a proof of work model to validate transactions for security purposes. The method consumes a massive amount of energy generating a massive carbon footprint. For instance, bitcoin mining is estimated to produce 22 million tonnes of CO2 annually.
On the other hand, Cardano uses the proof of stake mode for its transactions. It is therefore environmentally friendly and hence appealing to ecologically conscious crypto investors. This feature gives it an advantage over ethereum. Cardano is 20000 times more efficient than bitcoin mining.
Cardano blockchain was designed using POS right from the start. As a result, it is insanely swift, supporting over 200 transactions per second. The speed is poised to hit a million transactions every second.
That said, ethereum is scheduled for update 2.0, which will move the blockchain to POS. This will enable it to handle as many as 100000 transactions per second, making it one of the most significant upgrades since inception. To give you a clear picture, Visa can only process 1700 transactions per second.
Entry into Japanese Market
The Japanese market is considered one of the strictest in the world. Its stringent market financial controls are aimed at protecting investors from scams and financial volatility. Cardano launched in the Japanese market, joining the likes of Litecoin, Ethereum, and Bitcoin. Therefore, Cardano is likely to increase its customer base.
Cardano has lined up great projects after launching the smart contracts. For instance, it has partnered with the Ethiopian government for an education program. It is also partnering with the Georgian government. Besides government partnership, ADA is partnering with New Balance and IBM. This new partnership could see its value increase significantly.
The Competition is not a Cakewalk
Cardano seems to have more technical and technological advantages. It is set to launch smart contracts and is still testing its ability to handle Dapps. However, users will still have to wait and see if they can be integrated into the real world.
Ethereum, on the other hand, has the first-mover advantage. Its products are enterprise-ready and already in use. It also boasts support from giant institutions like Morgan Chase bank.
Moreover, Ethereum is headed for a proof stake upgrade. Currently, Ethereum has run away with the smart contract competition. It hosts over 2800 dApp on its network consisting of 80% of all apps.
Therefore, Cardano has to play catch and do it well. Luckily, Ethereum transactions are relatively expensive. The network is also quite congested, and developers are already leaving. These issues put Cardano at an advantage. It will be interesting to see how this development spans out before the proof of stake upgrade.
Cardano Could Eventually Beat Ethereum
There is no doubt that Cardano’s potential is immense. It is likely to overtake ethereum. But this development is premised on its adoption.
Without users, the good works would go to drain, right? We thought so. Remember, Ethereum has plenty of uses and is already steps ahead. Some of the companies using Ethereum blockchain include JP Morgan, Santander, Intel, and Microsoft. It is also highly accessible for trading on most crypto exchanges platforms.
Luckily, Cardano is also traded massively on crypto exchanges like Kranken and Binance. Coinbase also supports the digital token, giving it the much-needed high-profile validation.
Both Cardano and Ethereum have massive growth potential. With upcoming upgrades and product launches, there is plenty of room for them to coexist. Cardano’s future interoperability, lower fees, and higher staking could appeal to and attract users. It could also take advantage of Ethereum high fees and catapult itself to the top. Regardless of which platform emerges top, one thing is almost certain. They will all try to innovate and become better. Therefore, users will be the ultimate winners.