There are now more and more cryptocurrencies to choose from these days; Bitcoin, Ethereum, Dogecoin, Litecoin, and so many others clutter the market for digital assets. However, it can be difficult to see the differences, the pros and cons, and most importantly, what might be more valuable in the future.
Cardano and Solana aim to improve Ethereum’s scalability issues and create an open ecosystem of decentralised software and services. Both blockchains have a lot of potentials, and both cryptocurrencies can pay off in long-term investments.
In this article, we will be discussing the best crypto to invest in between Solana and Cardano.
What is Solana?
Solana is a smart contracts platform powered by the SOL coin. It was launched in 2017 by former Qualcomm software engineer Anatoly Yakovenko, and it features a consensus mechanism that blends PoS with proof of history. Specifically, Solana timestamps incoming transactions to create a verifiable order of events and accelerates network throughput.
Solana can theoretically handle 50,000 TPS, and those transactions are finalised in just 13 seconds. That incredible scalability keeps network fees low. The average transaction on Solana costs a fraction of a cent, much less than the $0.44 now charged on Cardano and orders of magnitude below the $20 you might expect to pay on Ethereum. In short, the Solana blockchain is already fast and cheap, translating into significant adoption.
The platform boasts over 1,300 blockchain projects, including dApps like Magic Eden and Solanart, the fifth- and sixth-most-popular non-fungible token (NFT) marketplaces in terms of total traders. Solana also ranks as the sixth-largest DeFi ecosystem, with $8.7 billion invested in the blockchain. It just launched Solana Pay, a platform that will allow consumers to send digital payments to merchants using stablecoins like USD Coin, a cryptocurrency that’s tied to the price of the U.S. dollar. Because Solana Pay is powered by blockchain technology, it eliminates the need for banks and credit networks, meaning merchants are charged a fraction of a cent for transactions.
What is Cardano?
Cardano is a smart contracts platform powered by the ADA coin. It was launched in 2017 by Ethereum co-founder Charles Hoskinson, and it features the industry’s only peer-reviewed consensus protocol: Ouroboros. That’s a clever name. The ouroboros is an ancient symbol for infinity that pops up in several cultures, depicting a dragon eating its own tail. In the context of Cardano, the name hints at the highly scalable and sustainable nature of the platform.
Specifically, Ouroboros is a type of proof of stake (PoS) consensus mechanism; meaning validators compete for the right to verify transactions (and earn rewards) based on their stake in the network. By comparison, Ethereum relies on proof of work consensus, an energy-intensive solution that pits miners against each other based on computing power.
Cardano’s evidence-based approach is a key part of its allure. The developer team frequently publishes peer-reviewed research detailing the technical specifications of the blockchain, and the project itself is divided into five phases: foundation, decentralisation, smart contracts, scalability, and governance. As part of the third phase, Cardano launched support for smart contracts in September 2021. And though the ecosystem is still in its nascent stages, there are hundreds of projects in the works, including an array of decentralised applications (dApps) and decentralised finance (DeFi) services.
Next, Cardano will address scalability. The network currently supports 250 transactions per second (TPS), with a finalisation time of two minutes. For context, that’s much better than Ethereum’s 14 TPS and six-minute finalisation time. But it pales in comparison to Visa’s theoretical 24,000 TPS.
To boost scalability, Cardano’s developer team is working to implement Ouroboros Hydra, an upgrade that will enable multiple side chains (i.e., additional blockchains that divide the computing load more efficiently). That update could occur as early as this year, and it could theoretically boost throughput to 1 million TPS while enabling near-instant finality.
Similarities Between Solana and Cardano
Both of these crypto coins are great options for investors looking to add a further coin to their wallet or to break into the industry with a product that has the potential to grow massively. For those using the programs to create external projects (such as developing), it is important to look at the exact specifications of each. However, for the investor, the similarities and differences holistically are very important:
2021 Fastest-Growing Cryptocurrencies
Both Solana and Cardano were among the fastest-growing cryptocurrencies in 2021, growing substantially over the year. In 2021 alone, Cardano’s price rose from $0.18 to $1.37 but hit $2.85 in August, while Solana went from $4.23 in Jan to $172 in Dec, putting both of them on the radar for all crypto investors.
The two have also seen price growth in 2022. They are definitely considered some of the biggest possible winners in the coming years, primarily because of their following and developer backing.
The two coins have also been dubbed “Ethereum Killers” because of their ability to be better and more functional than Ethereum, primarily because of their technical capabilities.
Due to the intelligence and functionality behind each of the coins and the relative lack of competitors, Solana and Cardano are likely to become increasingly popular tools for developers and for digital financers, which will fuel their increase in price in the future.
A smart contract is an automated digital agreement that cannot be corrupted or altered. Cardano added smart contracts to their system in 2021, similar to Solana, so both have the feature, mimicking the fundamental building block of Ethereum and allowing the new coins to match, if not better, their predecessor.
Solves Ethereum’s Scalability Issue Promise
While it may sound like a lot, Ethereum can only process 15 transactions per second on its system. As it becomes more widespread and additional programs use it, it slows down considerably. Its gas fees increase, making it considerably worse to use.
Both Cardano and Solana were built with this problem in mind and with solutions capable of effectively solving this issue, making them more viable options for the future of crypto.
Why Invest in Solana Over Cardano?
While Cardano does have its benefits, Solana should not be overlooked as a cryptocurrency that has seen remarkable growth for a good reason.
The cryptocurrency is a pioneer in many ways and can stand apart from the crowd for its capabilities, making it better than its rival Cardano.
Faster Transaction Rates
Firstly, Solana’s transaction rates are considerably faster than Cardano’s due to the direct method it employs to transmit information. Solana’s programming provides it with the necessary features to be used as an effective transaction hub for developers looking for speed.
Lower Transaction Fees
In a similar method to the faster transaction times, Solana also has the bonus of having lower transaction fees. The transaction can be completed quickly and does not have to be waiting on the blockchain, lowering gas prices and making it a more affordable alternative to Cardano.
More Blockchain Projects Currently
Solana also began outreach for its projects faster than its alternative, meaning that it now has more users and projects currently involved with the system. So while Cardano may catch up to it in time, Solana has a considerable head start and tremendous popularity.
Why Invest in Cardano Over Solana?
While the two currencies rival each other considerably in terms of popularity and profitability, certain defining characteristics differentiate them. Knowing these differences is key to choosing which one is the better long-term investment for profitability.
Unfortunately, the two systems are constantly developing new features and improving their efficacy, meaning further alterations beyond these may be possible.
Better Validation Mechanism
Cardano’s validation mechanism is incredibly effective at transmitting data than Solana. Furthermore, by using a number of validators, each of which works inter-chain for multiple transactions, Cardano can be the most censorship-protected of the two (and highly ranked on the fiat coin market in its totality).
Ouroboros Consensus Protocol
As the revolutionary proof-of-stake system that enabled Cardano to become so famous in the crypto community, Ouroboros is peer-reviewed for its level of security and efficiency. It also has a highly affordable way of completing transactions up to four million times more effective than the system that controls Bitcoin, making it a much more effective option for users and investors.
Better Stability: Peer-Reviewed System
Additionally, Cardano’s system in its entirety has been peer-reviewed to validate its usability and its efficiency at performing various tasks, and it was the first fiat coin to undergo this.
In terms of reliability and trustworthiness, Cardano’s programs have been confirmed to be one of the best options available. Solana and many other coins have not been peer-reviewed, but this is not necessarily a way of indicating the coin is poor.
Both the two coins have the potential for remarkable growth in the future. As a result, neither can be written off as a complete investment dud; a crypto investor that puts their money into either of the options is entirely rational, given the power and momentum of both.
The technology backing both coins and platforms make them different in many ways. In terms of investment potential, given the lower current price of Cardano, it has the highest growth potential. With considerable professional backing from a proven crypto expert, it is likely to be the choice for investors. However, Solana has many features that make it more functional for transactions.
Either option is likely to be a profitable one.