Cardano, the fledgling altcoin launched in 2017, reached third place among cryptocurrencies in terms of capitalisation in February 2021. The first and second places are occupied by Bitcoin and Ethereum respectively. Cardano’s founder, Charles Hoskinson, who created it directly to compete with Ethereum, therefore seems to be getting closer to his goal.
Charles Hoskinson, co-founder of Ethereum, left the cryptocurrency giant in 2014 after a dispute over the acceptance of venture capital and the need for a more formal governance structure. In 2015, he launched the Cardano project with his start-up IOHK.
Cardano, a “synthesis” of Bitcoin and Ethereum
Cardano is an open-source blockchain created by Charles Hoskinson in 2017. The Cardano platform has ADA as its motto and also offers smart contract execution. Cardano uses technology inspired by both Bitcoin and Ethereum. Unlike Bitcoin, which uses proof of work, Cardano requires proof of participation. Its platform then contains two layers. Firstly, a settlement layer, on which ADA is based and which is inspired by Bitcoin. Secondly, a calculation layer, similar to Ethereum, where smart contracts and applications are executed.
This model has led to it being referred to by some as a synthesis of Bitcoin and Ethereum. Its creators present it as a third-generation cryptocurrency, overcoming the problems encountered by Bitcoin, which is too slow, and Ethereum, which is not secure and scalable enough.
The Cardano project is currently still in development. It is divided into five phases or “eras”:
Byron: with the implementation of the fundamental elements of its blockchain such as the proof-of-stake algorithm, the infrastructure enabling transactions of its ADA cryptocurrency and the wallets offered by Cardano
Shelley: with the gradual decentralisation of the network and the introduction of delegation, incentive and reward systems
Goguen (current Cardano era): with the introduction of smart contracts
Basho (coming soon): with the introduction of parallel chains to solve interoperability problems
Voltaire (coming soon): for governance issues
Cardano enters the big league
Right from the start of the project, Charles Hoskinson wanted Cardano to replace Ethereum on the cryptocurrency market. His background with Ethereum certainly explains the strong rivalry between the two cryptocurrencies.
Confident in his project, Charles Hoskinson predicted a bright future for Cardano on his Twitter last summer.
“Next year I predict there will be hundreds of assets running on Cardano, thousands of DApps, tons of interesting projects and lots of unique uses and utilities. In 2021, it will be great fun to watch Cardano grow and evolve. The community is definitely ready to innovate. ”
So where does this leave us eight months on? The ADA share price has risen sharply on the market. The Cardano project was also recently annexed to Bloomberg Terminal. Charles Hoskinson’s predictions may not come true in 2021, but the Cardano project is on track.
The crazy rise in the price of ADA, Cardano’s cryptocurrency
ADA, Cardano’s cryptocurrency, is currently priced at $1.24. Ethereum, its main competitor, is currently selling for $1,771.15, putting it well ahead of ADA in terms of capitalisation. Nevertheless, if we look at their growth in proportion, Cardano’s growth has far outstripped that of Ethereum throughout the year. What’s more, Cardano recently climbed to third place among cryptocurrencies behind its two models, Bitcoin and Ethereum.
The young altcoin is gradually approaching the big league, and seems to be living up to its promise of rivalry with Ethereum. Cardano’s addition to the Bloomberg Terminal confirms this trend.
The recent addition of Cardano to Bloomberg Terminal
The Cardano project was also added to the Bloomberg Terminal this week. This addition was reported on twitter by an analyst from S14 Capital, a French company, and has been repeated many times since.
The Bloomberg Terminal enables professional traders to follow market prices. For the moment, only a description of the Cardano project has been added. But other elements, such as tracking its price, could be added. In any case, this is a major step forward for Cardano, which will undoubtedly gain a great deal of visibility.
So is Cardano a serious rival for Ethereum?
For the time being, it’s fairly difficult to estimate Cardano’s potential. We have no information on the DApps available on Cardano. As for its smart contracts functionality, it will not be implemented until this summer. So we’ll have to wait and see whether Cardano delivers on its technical promises.
The response to Cardano has been mixed for the time being. Some people are not taking its launch seriously and are extremely critical of the young altcoin. Members of the Ethereum team have, of course, spoken out on the subject. In their view, Cardano’s rise on the stock market is due to the transaction fees charged by Ethereum. Cardano applies lower transaction fees, which explains its popularity.
Ethereum developer Ryan Berckmans does not see Cardano as a real rival. He was highly critical in an interview with cryptonews.com: “Cardano has no features or partners on which to build a credible reputation to be a ‘killer’ of Ethereum or simply to be a serious competitor. To my knowledge, there is a well-meaning and talented development team behind Cardano. Yet Cardano is evolving too slowly and has no appeal,” he confided.
Charles Hoskinson’s past at Ethereum could of course influence these criticisms.
Cardano also has many supporters. The affordable price of its ADA currency attracts many buyers. The personality of its founder, Charles Hoskinson, who also co-founded Ethereum, reassures many buyers that the latter will be a success. If Cardano lives up to its promise of being faster than Bitcoin and more scalable and secure than Ethereum, it will have no trouble competing directly with the latter. This prospect certainly explains the popularity of ADA on the market this year.
