By
Cloudbet

If you’re a massive Ethereum fan looking for a faster, cheaper and more scalable option, Cardano (ADA) and Solana (SOL) are standing on the shoulders of giants waving their arms in the air.

These two attention-grabbing cryptocurrencies are making moves and lots of noise. They’re both relatively new, compared to Bitcoin or Ethereum, but share many similar traits with one another. But do they have more potential? Only time will tell. 

Are Cardano and Solana viable investments for the future? What makes them stand out in the crowd? Let’s take a look at these exciting altcoins to understand their strengths and weaknesses, and what makes them similar to Ethereum. 

A Deeper Look At The Two Altcoins

When Cardano was initially launched in September 2017, it hit the market fast and was widely lauded by crypto industry experts as the ‘New Etheruem’. It was invented by Charles Hoskinson, who was a founding partner of Ethereum and one of crypto’s true visionaries. It uses a blockchain platform model similar to Ethereum’s with tokens and a smart contract platform. Within a few months of the launch, we, unfortunately, experienced the 2018 crypto crash that wiped out nearly $13 billion from the markets in just three hours. It was a difficult year for all altcoins, which was a booming industry in mid-2017. This resulted in a tough first year for Cardano, but it survived where other altcoins failed during that trying time, and is now considered one of the most robust cryptocurrencies in the world. 

Solana, on the other hand, was launched more recently in 2020 and enjoyed a monumental price rise of 18,000% in its first 18 months. Solana has a reputation as the “Ethereum Killer” because it's reported to be more secure and faster than ETH. It’s sometimes even referred to as the “Cardano Killer”. But, at this point, Solana is still considered well behind Cardano in many respects. It’s still playing catch up, but enthusiasm for the project and its advanced features is on the rise. 

Cardano’s Strengths and Weaknesses

Cardano’s blockchain utilises a proof-of-stake (POS) transaction confirmation system instead of a more standard proof-of-work (POW). This ensures faster operations while eliminating the gas fees you find with Ethereum transactions. This process eliminates the need for extra machines in the system because the nodes are less susceptible to interference. This model trumps Bitcoin’s POW system as there’s no gigantic energy consumption because there’s no mining involved with POS protocol. The rewards you get depend more on the tokens you have, as opposed to the amount of computing power. 

Cardano uses a specific language called Marlowe to write its financial smart contracts rather than using standard blockchain language. Cardano is also written in Haskell language, which is different from the standard C++ used by Ripple (XRP). If Ethereum is considered a second-generation blockchain with innovative smart contract technology, Cardano is a third-generation blockchain that hopes to overcome the issues encountered by previous generations.

One of Cardano’s major drawbacks is a lack of demand. The development team hasn’t yet implemented many projects that give users reasons to buy the coin based on functionality. Because of the token and smart contract system, it’s not that easy to use for those looking to start ICOs or initiate any asset tokenization. The slow development can sometimes dissuade potential users. The price could be considered overvalued as it's still unfinished, even though it has years of research and marketing behind it.

Solana’s Strengths and Weaknesses

Right off the bat, Solana’s major strength is super-fast and powerful operations. It has capacity for an incredible 50,000 transactions per second (TPS), almost 600 nodes, and fees that are much less than 1%. Solana is more adept than Cardano or Ethereum when it comes to scalability, security, and decentralisation.

Solana is developer-friendly and enjoys many new projects that result in more positive news stories in comparison to Cardano. It has over 400 different projects spanning across NFTs, DeFi, Web3, and many more. Its scalability far outweighs most altcoins by attempting to maintain “a single global state as the network scales”.

In terms of weaknesses, it’s still a very young ecosystem whose most popular apps are run by an anonymous group that is closed source. It’s not an open-source project at this moment. If this group decided to pull the rug from under the user, Solana might not recover for a long time. But at this moment in time, that’s just conjecture by us.

Market Cap and Competition

At the time of writing, Cardano is the third-largest cryptocurrency by market capitalization, at almost $74 billion (at a price of $2.30), while Solana's market cap sits at a little over $43 billion (at a SOL price of $144.65), placing it seventh on the list. On this metric, Solana has a long way to go to catch up, but it is nearly four years younger than Cardano and is performing exceptionally well for an altcoin of this fledgling age.

Cardano was Built for Scalability

Cardano’s main protocol was always to become a scalable and sustainable blockchain that relies less on cryptocurrency miners with massive energy consumption. Scalability was always the factor setting it apart from Ethereum. Cardano uses a Hydra scaling solution that suits both smart contracts and blockchain. Hydra is a groundbreaking POS scalability method that can help Cardano become a viable replacement or alternative to fiat money.

Using this system, Cardano could scale up to 1 million TPS that will rapidly finalise transactions. This Hydra method can also enable horizontal scaling that uses more nodes to increase performance.

Solana Is Focused on Fast, Scalable Blockchain

Solana calls itself the fastest blockchain in the world. Their website states that the average transaction cost is $0.00025. Altcoin experts often call it the most scalable blockchain in the crypto-sphere.

It has a reputation as being the first blockchain platform that’s web-scaled and is one of the few altcoins that can achieve over 1,000 TPS. It scales proportionately with the bandwidth to create these transaction speeds. This fourth-generation blockchain creates a fast and scalable network that never compromises its decentralisation or security.

Which Is More Likely To Become the Next Ethereum?

If we had a dollar for every time we heard about the ‘next Ethereum’, we would long have been living on our own tropical island. However, Cardano and Solana are two altcoins that could live up to that lofty statement. They are both referred to as ‘Ethereum killers’, so which one fits the bill?

At this time, Cardano is seen as the natural alternative to Ethereum in the short term, largely due to its consistency and how long it’s been in existence. However, with Solana’s unparalleled transaction speed margins and ultra-low fees, it has more potential as an alternative to Ethereum in the long term. Solana does a better job at promoting its projects across social media platforms like Twitter and Telegram. 

Cardano Vs. Solana Price Outlook

Although Cardano’s current market cap is almost double Solana, what does this mean for the future price analysis and outlook? After researching both altcoins, Cardano shows all the traits of a better investment for a long-term holding than Solana. It’s lower risk and is more track-proven and battle-tested at this time.

Solana is still in its infancy and is volatile, but that also makes it an interesting coin if you are looking to make short-term gains in the market. The 18,000% price increase in its first 18 months should be a clear indication of the opportunities available, but please do tread carefully.

Not financial advice - DYOR

Following the first maxim of cryptocurrency research, we do not offer financial advice and encourage everyone to do your own research before making any investment in the cryptocurrency market - as you should for any investment. The volatile nature of the cryptocurrency market is unpredictable, which brings us to the second maxim: only invest what you can afford to lose.

Solana Still Has a Long Way To Go To Catch Cardano

Solana is still a fair distance behind Cardano in most respects, but it does have lots of layers of potential to create positive global change. Age and experience is on Cardano’s side at this time, but its lack of development and Solana’s blockchain speed might make up the difference in surprisingly quick time. Solana has roughly half the market cap of Cardano, so it will be a while before it makes up the ground on ADA. And before it can become the Ethereum Killer it claims to be, it has to challenge the true boss in its sector first - Cardano.

Final Thoughts on Cardano and Solana

When Cardano was initially launched, it received massive support and investment from the crypto community. However, after the market's decimation in 2018, its supporters seem to have had more mixed feelings towards ADA. Still, over the past three years, it has steadied and proven itself a major competitor to Ethereum. The main issue now seems to be the lack of ongoing development and projects. These projects work as marketing tools to promote the benefits of said altcoins, and to increase their value. In Cardano’s case, this seems to be the most stagnant part of the model.

Solana’s price is less predictable compared to not only Cardano but other top-10 altcoins. That said, its vast array of projects, apps, transaction speeds and compatibility looks to bode well for the future.

Conclusion

Solana (SOL) could be seen as a better short-term investment because the price is still fluctuating, but that’s at your own risk. Cardano (ADA)'s price has been more consistent recently with less fluctuation, perhaps making it more reliable. Will Solana and/or Cardano usurp and replace Ethereum in the next couple of years? Maybe, though we doubt it.

But they will likely become viable alternatives. Solana does seem to have the compatibility and operational processes to take on Ethereum, but at this moment is trying to find its own place in the grand scheme of things. Like many things in the world of cryptocurrency, we wait for time to tell.

Posted 
Sep 24, 2021
 in 
Crypto 101

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