In recent years, Cardano has proven to be Ethereum’s biggest competitor. As time goes on, Ethereum gets more and more competition. Polkadot is one of those. In this article, we will compare Polkadot and Cardano, to see which of these projects has more potential to threaten Ethereum.
Blockchain technology brings changes in different types of business; primarily in terms of transaction security, and eliminating the need for a third-party. Blockchain technology is increasingly being used and we are witnessing problems, and shortcomings. Increasing the use of blockchain technology means increasing the number of computers on the public blockchain network. This results in longer transaction durations and a higher transaction prices. Two projects aimed at solving these problems are Cardano and Polkadot.
If we compare these two projects in terms of price movements, we will conclude that both projects have had a large growth in price in the last six months. Cardano (ADA) went from a price of $0.16 in January to the current price of $1.46, an increase of over 800%. Polkadot (DOT) had decreased growth in comparison, rising from $5 in January to the current price of $21 (representing a growth of over 400%).
Current prices are much lower than they were a month ago. Cardano reached an all-time-high (ATH) of $2.46, which means that current prices are roughly 40% lower than they are now. In comparison, Polkadot had a larger correction, and the price is currently 55% lower from the value of ATH of around $50.
Cardano is public blockchain platform for building and running smart contracts. It is in the top five crypto projects in terms of market capitalization. The founder of Cardano is Charles Hoskinson, who is also one of the founders of Ethereum.
Cardano solves the problems that Bitcoin and Ethereum have which include high power consumption, slow transactions, and high transaction fees. Cardano works with a Proof-of-Stake (PoS) algorithm dubbed Ouroboros. This algorithm doesn’t require expensive computer equipment and allows easy adoption.
Read the article where we covered the topic 10 Reasons to Buy Cardano (ADA).
Polkadot is one of the most successful ICOs of 2017. A total of 5 million DOT tokens were sold at a price of 0.109 ETH, which means more than $ 150 million of total value. Shortly after its official launch, Polkadot found itself among the top ten largest blockchains in terms of market capitalization. Behind the Polkadot project stands Dr. Gavin Wood, who is also a co-founder of Ethereum.
Polkadot unites a network of heterogeneous blockchain shards called parachains. These chains connect to and are secured by the Polkadot Relay Chain. They can also connect with external networks via bridges.
With Relay Chain the problem of interoperability is solved, while parachains solve the problem of scalability. The bridge chain is built to connect blockchains that do not use Polkadot’s governance protocols.
Polkadot will implement a PoS protocol. Validators secure the Relay Chain by staking DOT, validating proofs from collators, and participating in consensus with other validators.
Read the article where we covered the topic 10 Reasons to Buy Polkadot (DOT) here.
Comparison Between Polkadot (DOT) and Cardano (ADA)
|Polkadot (DOT)||Cardano (ADA)|
|Total Market Cap||$19B||$46.5B|
|Up to 1500 tps per parachain.
Limited to around 100 parachains.
It is theoretically possible to achieve 150000 tps.
The plan is to achieve 2 million tps in the future.
|Staking rewards||13.21%||7.26 %|
|Interoperabile||YES||NO (in development)|
|Current adoption||More than 400 projects building on Subtrate, Polkadot project started 2016||There is no information about projects that are building on Cardano|
|Team||60+ developers across 15 countries||300+ employee|
|Proof of stake||Around 1000 validators||2000 active nodes|
If we compare these two projects it can be seen that currently each of these two projects has some advantages over the other; Polkadot more so. Currently it has much higher scalability, higher staking reward, it is interoperable, and has much better adoption. Cardano, on the other hand, has better blockchain decentralization, and a bigger team.
It is very important to consider the plans for the future, when comparing the two projects. Cardano has much bigger plans. Cardano is developing second layer solution called Hydra to improve scalability. The plan is to achieve 2 million transactions per second (tps), which is approximately 10x more than a Polkadot can achieve.
Taking all this into account, it can be said that Polkadot currently offers more to its customers but Cardano has more potential in the future if it meets its set goals.
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