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Can Cardano replace the Ethereum blockchain in the future?

 


What is Cardano? 

Cardano is a blockchain network founded in 2017. Ethereum co-founder Charles Hoskinson was responsible for Cardano. The Cardano blockchain uses the modern proof-of-stake consensus mechanism . Cardano's network token is called ADA.


Cardano is characterized by the fact that the blockchain is further developed according to evidence-based methods with the support of scientists. The developers analyze weaknesses of other blockchains and improve these weaknesses in their own blockchain. T he blockchain combines security, decentralization and scalability, making it one of the most technically advanced blockchains on the market.

How has the Cardano (ADA) price moved in the last 12 months?

The price of Cardano’s ADA token experienced a massive increase in autumn 2021. This was mainly due to the introduction of smart contracts with the completion of the Goguen development phase . The ADA course rose to over 3 US dollars. After that, however, we saw increased falls in the ADA course.

By the turn of the year, the ADA had fallen to $1.70. This price drop started as early as September and October, when most cryptocurrencies were still rising. In 2022, this trend continued. Here Cardano (ADA) became a victim of the bear market, which started for Bitcoin in November and has so far determined the year 2022. The ADA price even fell below the $0.50 mark in June.

Ethereum is a blockchain that has existed since 2015 and was the first blockchain to offer smart contracts. Today, Ethereum has a huge ecosystem and is the basis of most decentralized applications. In the area of ​​NFTs and DeFi , Ethereum is by far the most used blockchain.


However, Ethereum has had to struggle with low transaction speeds and, above all, high transaction costs and gas fees for years. This is mainly because Ethereum uses the proof-of-work consensus mechanism . This is less efficient when processing transactions. 


Why is Cardano an “Ethereum Killer”?

Cardano is significantly faster and also more efficient than Ethereum when processing transactions. Furthermore, the blockchain offers higher security than the Ethereum blockchain. Because of its technical excellence, Cardano has been dubbed the “Ethereum killer” for years. In theory, Cardano could be the blockchain on which the majority of decentralized applications will be based in the future.


A disadvantage of Cardano is that its scientific approach has slowed development in recent years. The network only introduced smart contracts in 2021 as part of the Goguen update. Ethereum had a lead of several years and was able to establish itself as number 1 in smart contracts. But Cardano has the potential to replace Ethereum in a few years.


What needs to happen for Cardano to replace Ethereum?

The number of Cardano addresses and smart contracts has increased continuously in recent months. Yet Ethereum is still the clear leader when it comes to decentralized applications, both DeFi and NFTs. This advantage is difficult to catch up. Technically, Cardano would have to be so far superior to Ethereum that it is absolutely the best choice of all blockchains for dApp developers.


In the next update, Basho, Cardano wants to massively increase the transaction speed and scalability of the blockchain. This could lead to it becoming the fastest blockchain on the market. This move would be massive and could pose a real threat to Ethereum.


What is the importance of Ethereum 2.0?

Ethereum 2.0 is the update of the Ethereum blockchain, in which primarily the consensus mechanism of the Ethereum blockchain is switched from proof-of-work to proof-of-stake . This should make the blockchain more efficient. The transaction speeds are to be increased and the gas fees are to be massively reduced.


Ethereum 2.0

If Ethereum 2.0 is successful, Ethereum will be in a much better technical position and will be able to run smart contracts much more efficiently. This is extremely important as new blockchains such as Cardano, Solana or Avalanche have shown in recent months that they are more efficient and can also securely execute smart contracts.


Can Cardano still overtake Ethereum?

Despite the switch to proof-of-stake at Ethereum, Cardano could remain the much more technically mature blockchain in the future. The network is not known for its rapid development. But the end result has always been technically brilliant and superior to other blockchains in the past.


Especially with the massive increase in scalability by Basho, Cardano should see another massive push and could actually become a serious competitor for Ethereum in the field of dApps in the long term. Optimists see the Cardano blockchain as number 1 in this area in 5-10 years and consider the name “Ethereum killer” to be justified.


Should I invest in the ADA token now?

The price of Cardano’s ADA token is very low at the moment. The price recently fell below the $0.50 mark. In September the price was still 3 dollars. The bear market could still drive the price down in the short term. But in the long term, the ADA course should rise again in the next bull market.

For investors thinking long-term, the current market presents a massive opportunity to buy Cardano’s ADA token cheaply. Optimists even see prices of $100 or even $1,000 for the ADA token in many years. If so, the current bear market presents an extreme opportunity for long-term investors.

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