Education • 7 min read
By Brinsley Bailey
Many cryptocurrencies are vying for Ethereum’s place on the ladder; Polkadot, Avalanche, Zilliqa, Cosmos…the list of rivals is extensive. However, two clear contenders lead the pack; Cardano (ADA) and Solana (SOL). So what exactly makes these tokens ‘Ethereum killers’ and potential usurpers to Ethereum’s throne? We explore the origins of Cardano and Solana, uncovering what they have in common, where they differ, and which has the brightest future.
Launched in 2017, Cardano is a Proof-of-Stake (PoS) blockchain platform that has the lofty but admirable goal of making the world a better place by redistributing power from large unaccountable structures to the individual. Here’s how Cardano co-founder, Charles Hoskinson, describes the platform:
Cardano is also the first blockchain to utilise peer-reviewed research, working collaboratively with academics to navigate the platform’s future developments. ADA is Cardano’s native cryptocurrency that is used to pay transaction fees on the platform and can also be staked to earn rewards.
Solana is a decentralised blockchain created to facilitate scalable, user-friendly apps for the world. Launched in 2020, Solana utilises a hybrid system that employs Proof-of-Stake (PoS) to secure the network and a unique Proof-of-History (PoH) algorithm that automatically verifies the order of blockchain transactions.
Solana’s open-source blockchain has been used by developers in many different ways including minting and selling NFTs, building decentralised finance (DeFi) platforms, and building blockchain games. The SOL token is the native cryptocurrency of the Solana network and is primarily used for staking and paying transaction fees.
Playing it ‘smart’: The primary similarity between the Cardano and Solana blockchains is their smart contract and DApp support. Both networks have been built to facilitate smart contract technology and provide an ecosystem to support the projects of ambitious developers.
Need for speed: Both Cardano and Solana have surpassed Ethereum’s capabilities when it comes to transaction processing speed, which was exactly what they originally set out to achieve.
Scalability and low fees: Both networks offer low gas fees compared to the Ethereum platform and the opportunity for great scalability through exceptional and, in Solana’s case, unique technical features. Cardano can process 250 transactions per second (tps) and Solana can process on average 2,700 tps!
Transaction Fees: While both Cardano and Solana have vastly lower transaction fees than Ethereum, there are clear differences between their prices. Cardano currently has an average transaction fee of €0.18 compared to Solana which offers an incredibly low transaction fee of just €0.00025 per transaction. Based on these figures, Cardano is 800 times more expensive to transact on than Solana.
Planning and Decision-making: Cardano uses a selective, peer-review process that aims to identify and solve complex problems of new technology before integrating it into the network. Like Cardano, Solana is similarly innovative, but the planning and execution of both networks are very different.
Blockchain validation processes: While Cardano and Solana have similarities in platform functionality, their methods of executing the vital blockchain validation process differ significantly. Cardano uses a PoS protocol called Ouroboros to validate transactions. This mechanism selects participants to create new blocks based on the stake they control in the networks.
Solana uses a hybrid system that features PoS, but also uses a Proof-of-History (PoH) method, where the foundation of the validation procedure relies on the unique timestamping of blocks based on the order of blockchain transactions and the passage of time between them.
Transaction speed: The Solana network is unmatched when it comes to transaction speed. They claim a theoretical peak capacity of 65,000 transactions per second (tps), though in practice it’s usually around 2700 tps, which is why this blockchain has become one of the most popular in recent years. In comparison, Cardano seems sluggish with around 250 tps, but it’s important to remember that Ethereum only reaches an average of 30 tps.
Cardano and Solana have a keen interest in reducing environmental impact and place heavy emphasis on sustainable systems, leading to their reputations as green cryptocurrencies. Both use the PoS mechanism which consumes considerably less energy compared to the Proof of Work (PoW) mechanism used by other blockchains such as Bitcoin. In fact, Cardano claims on their website that their Ouroboros PoS protocol is much more energy-efficient and allows Cardano “to securely, sustainably, and ethically scale, with up to four million times the energy efficiency of bitcoin.”
Similarly, Solana’s PoH protocol claims to be “so efficient that it has an energy impact a fraction of other blockchains and has the numbers to back it up”: the average Solana transaction uses 2,707 Joules, compared to proof-of-work blockchains such as Ethereum (equal to 287,305 Solana transactions) and Bitcoin (equal to 2,738,710 Solana transactions). Along with energy impact reports, the Solana website also has an energy comparison feature to highlight the network’s efficiency and sustainability efforts.
Over the years, Cardano has featured in the news for all the right reasons and developed some interesting partnerships and celebrity admirers:
Samsung and Veritree partnered with Cardano in land restoration efforts to combat climate change.
New Balance struck a deal with Cardano to authenticate a premium line of training shoes for the company.
Cardano worked closely with the Ethiopian government in efforts to build a blockchain-based universal student credentialing system.
TV & Wireless provider DISH Network integrated the Cardano blockchain into its telecom business to provide digital identity services to Dish customers.
Cardano teamed up with esports company Rival to help it mint and distribute non-fungible tokens (NFTs) for showcasing the sports franchises in Rival’s stable.
Kiss frontman Gene Simmons invested in Cardano in 2021!
Though Solana is pretty new in the crypto space, the network has many notable collaborations and endorsements under its belt since launching in 2020:
NBA icon Michael Jordan launched his debut NFT collection on HEIR, which is a Solana-based platform.
Audius, a fully decentralised music platform, launched on Solana in February 2022.
In January 2022, Bank of America praised Solana and said the blockchain could become the “Visa of the digital asset ecosystem.”
American singer Jason Derulo couldn’t resist the lure of Solana…
Since their launches, there have been notable price developments for both ADA and SOL.
Cardano reached its all-time high on Sep 2, 2021, at €3.05 and its all-time low on March 13, 2020 at €0.019.
Solana reached its all-time high on November 6, 2021 at €256.46 and its all-time low on May 11, 2020 at €0.5008.
You can check the price developments of Cardano and Solana from the last 24 hours, 7 days, 30 days and the past year on Bitpanda.
The crypto market is known for its volatility, therefore past performances can’t be considered indicative of future performances.
…both platforms! Cardano and Solana are similar in that they are environmentally-conscious blockchains that are built for smart contract and DApp projects and looking to deliver speed and scalability to the masses.
If you believe speed is the key and are looking for a greener solution, then maybe SOL would suit your investment strategy.
On the other hand, if sustainability and peer-reviewed validation systems rock your boat then maybe ADA is right for your portfolio.
We can’t provide a definitive answer because the best token is the one more valuable for you.
Remember that things change fast in the world of crypto, so not all investments will always be good investments for everyone.
Whatever you decide to do, get your research done and consider your investment strategy before you start investing in any asset, including Cardano and Solana. Remember to take into account portfolio diversification and your personal risk tolerance, so don’t let FOMO and impulsivity take investment decisions for you, especially in turbulent times.
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Disclaimer This article does not constitute investment advice, nor is it an offer or invitation to purchase any digital assets.
This article is for general purposes of information only and no representation or warranty, either expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this article or opinions contained herein.
Investing carries risks. Make sure to conduct your own research before making any investment. Past performance is no indication of future results.
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Bitpanda Tech • 3 min read
Bitpanda GmbH ve grup şirketleri (Bitpanda) Türk Parasının Kıymetini’nin Korunması Hakkında 32 sayılı Karar’ın 2/b maddesine göre Türkiye’de yerleşik sayılan hiçbir kişiye yönelik olarak 6362 sayılı Sermaye Piyasası Kanunu başta olmak üzere Türkiye Cumhuriyeti Devleti mevzuatı hükümleri gereği Türkiye’de faaliyet izni gerektiren hiçbir sermaye piyasası faaliyetine dair hizmet sunmamaktadır. Şayet Bitpanda’nın yabancı sermaye piyasalarında vermiş olduğu hizmetlerden Türkiye’de yerleşik kişilerin faydalandığı tespit edilecek olursa tüm zararları kullanıcıya ait olmak üzere bu hizmetler ivedilikle sona erdirilecektir.
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