Every industry experiences comparison at one point or the other between two or more companies and projects. This comparison usually recognizes the effort the different parties put in to solve a particular problem the industry is experiencing and retains the title of "the best."
In the automotive industry, we have Ferrari vs Lamborghini. In the fashion space, we have Nike vs Adidas. In the mobile operating system space, we have IOS vs Android, and the list goes on.
In this article, we want to consider a Solana (SOL) vs Cardano (ADA) comparison as these two projects have come from behind to claim a top ten seat in the crypto space and a threatening momentum to overtake Ethereum as the go-to decentralized ecosystem.
What Is Solana, SOL?
A long queue continues to form behind projects that hope to completely obliterate the problems plaguing Ethereum and eventually become the "Ethereum killer" that overtakes the blockchain platform. Solana is one of those projects and sits high up on the queue as a real contender for dominance.
Solana has been called a third-generation blockchain and a fourth-generation blockchain by different sources. But, regardless of what you go for, Solana is a hybrid blockchain platform that operates on an open-source infrastructure to accommodate the highest possible scalability.
It was created in 2017 by Anatoly Yakovenko with one mission in mind; increased scalability, transaction speed, throughput, and a drastically reduced transaction cost.
The Solana blockchain, like Ethereum network, is designed to accommodate smart contracts and the creation of decentralized applications. It is also home to many decentralized finance applications and services, not forgetting NFT marketplaces.
Solana achieves its lightning speed transactions per second(TPS) by adopting an upgraded consensus mechanism that combines Proof-of-History(PoH) and Proof-of-Stake(PoS). Unlike Ethereum, which needs layer 2 solutions to get any shot at scalability and reduced cost of transactions, Solana blockchain has its scalability infrastructure integrated into its main chain, making it a Layer 1 lightning speed blockchain.
One thing we cannot forget is SOL, which is the native token of the Solana network. It is the utility and governance token that runs the network. Since it runs on an upgraded Proof-of-Stake consensus mechanism, SOL token can be staked to earn passive income or to earn its holder's certain rights within the network.
The maximum supply of SOL is unknown but currently has a total supply of 511 million SOL and a circulating supply of over 345 million SOL. As of the time of writing, the Solana network has a market capitalization of $12.7 billion, a 24 hrs trading volume of $1.2 billion, and a live price of $36.91.
How does Solana function?
Solana adopts a fine twist to its consensus mechanism, using a Proof-of-History(PoH) alongside the Proof-of-Stake(PoS) methodology. This Proof-of-History style uses a cryptographic clock that records immutable timestamps of events(transactions) on the platform and hardcodes it into the Solana blockchain.
How this works is, the Proof-of-Stake method requires that all validators confirm a suggested block before it can be added to the blockchain. The PoH speeds up the process by requiring every node or validator to activate a cryptographic clock that records the time any transaction takes place, which is then recorded on the blockchain.
Instead of waiting for every validator to validate a suggested block, the node notes the time of the transaction and sends it to the blockchain, which records them in chronological order. This Proof-of-History concept allows Solana to process as many transactions as possible within a second. Another thing to note is that PoH can be classified as a Verifiable Delay Function(VDF) on another level and a triple function consensus(setup, evaluation, verification). These features make it possible for PoH to provide trustworthy and unique outputs.
An overview of Solana network: the good and bad
One thing that stands Solana out from the plethora of projects chasing down Ethereum is its supersonic speed. But if you recall the blockchain trilemma that states; that a blockchain is built on three things, decentralization, security, and scalability.
It is impossible at any moment to have all three working in tandem — In Solana's case, complete decentralization has been compromised for speed. This susceptibility to centralization goes against core blockchain ethos.
Despite this, the Solana blockchain has attracted many developers and creators, processing hundreds of thousands of transactions and a growing user base.
This means many people are willing to compromise on complete decentralization for faster speed and lower transaction fees.
The security of the Solana network is also questionable, as the blockchain has experienced at least six outages, with one lasting for about 12 hours.
Overall, Solana offers unmatchable speed, but it comes at the cost of rock-solid security and complete decentralization.
Solana price prediction
The future is completely unpredictable regarding the financial markets, especially with cryptocurrencies that are newly introduced to the market. However, there are sophisticated algorithms adopted by different data analytics firms to predict how much a coin could be worth two, three, or five years from now.
Firms like Gov Capital, CoinGape, CoinPriceForecast, and Capital.com, predict that SOL could climb up to $263.5, $150, $58, and $42 by the end of the year 2023, respectively.
However, while some, like Gov Capital are optimistic with their predictions, others aren't seeing SOL gaining momentum despite a price increase.
What Is Cardano, ADA?
Cardano is a pioneer project in the blockchain space, holding itself down as the first blockchain platform to be fully scientifically oriented, using peer-review research and evidence-based methodologies to establish its blockchain network. At its core, the Cardano blockchain is an open-source Proof-of-Stake blockchain platform.
Remember the long queue we mentioned forming behind Ethereum to overtake it? Cardano is also on that queue, sitting high up with the likes of Solana, hence the comparison; Solana Vs Cardano.
Like Ethereum, Cardano can also enable smart contracts and its infrastructures can accommodate the creation of decentralized applications(Dapps), blockchain games, and decentralized finance services(DeFi). Cardano is big on decentralization, scalability, security, flexibility, interoperability, and sustainability as core pillars to create an alternative for developers and creators suffering from Ethereum's congestion.
An interesting fact is, Cardano was founded by a former co-founder of Ethereum, Charles Hoskinson, in 2015. The summarized gist of his fallout with Ethereum's co-founder, Vitalik Buterin, was a difference in intentions for the Ethereum platform. Charles wanted Ethereum as a profit-oriented organization, Vitalik wanted Ethereum to remain a non-profit organization.
Cardano is a self-acclaimed third-generation blockchain platform and also adopts a unique protocol within the Proof-of-Stake consensus mechanism called the Ouroboros protocol. As a result, Cardano can process as high as 250 transactions per second as opposed to Ethereum's 15 per second.
The native cryptocurrency of the Cardano network is the ADA token which is interestingly named after famous mathematician Ada Lovelace, just like Cardano was named after Gerolamo Cardano, an Italian Polymath. ADA can also be staked to get passive returns and earn certain rights within the Cardano community as regards voting and governance.
The maximum supply of ADA is pegged at 45 billion ADA, with a total supply of 34.2 billion ADA and the amount of coins in circulation is 33.7 billion ADA. As of the time of writing, the Cardano network has a market capitalization of $15.8 billion, a 24 hrs trading volume of $671.6 million, and a live price of $0.47.
How does Cardano function?
Cardano is the first blockchain hinged on peer-reviewed research and is evidence-based. What does this mean? Peer review is simply the assessment of a work or project by one or more experts in the same field of study. For example, in medicine, peer-reviewed research would be evaluated by top professors, practitioners, etc., in the specific study niche. In Cardano's case, it means that everything built or proposed to the Cardano blockchain has first been reviewed and proven by experts in cryptography, blockchains, and other significant contributors.
This method of developing the Cardano network brings strong credibility and ensures that the network is built on factual data and little to zero assumptions.
The Cardano network also uses the Ouroboros protocol with the Proof-of-Stake consensus as a validation mechanism. Similar to the typical Proof-of-Stake methodology, a validator is picked randomly based on how much ADA is staked and for how long. Then a group of validators are selected to attest to proposed blocks by the selected validator, after which the validated block is added to the Cardano blockchain.
An overview of Cardano network: the good and bad
Cardano is an environmentally friendly blockchain because of its Proof-of-Stake consensus mechanism, which consumes low energy. Cardano is also a peer-reviewed research and evidence-based blockchain platform, giving it strong credibility and making it the first of its kind within the blockchain space.
Cardano is also one of the first adopters of the Proof-of-Stake consensus mechanism and has accrued a large market share making it one of the biggest platforms using the consensus mechanism. However, a downside to the blockchain platform is the pace at which it's moving. Cardano is known to miss many deadlines due to their "conscientious" approach to developing the blockchain.
The team shows no sign of being in a rush, and this has given other platforms that came after Cardano the room to outrun them in certain areas and snatch market dominance. An example is Solana.
Cardano price prediction
We have already established the uncertainty of the crypto market and the existence of sophisticated algorithms to help predict future outcomes. Cardano has suffered a nose dive in 2022 from its all-time high, just like many other cryptocurrencies, dropping over 85%.
Firms like Wallet Investor, Digital Coin, and Gov Capital predict that ADA could reach $0.20, $0.66, and $0.85 by 2023. While firms like the Wallet Investor see a further decline, firms like Gov Capital are optimistic with their predictions. Others like Capital.com suggest that Cardano can recover its former price.
Similarities Between Solana Vs Cardano
Solana and Cardano are rivals but share several similarities. This is expected because, regardless of what cutting edge you adopt on your platform, there are some basic building blocks everybody has to integrate to set up a competitive platform.
Solana and Cardano both use the Proof-of-Stake consensus mechanism. This is not surprising since scalability is a big deal for both blockchain platforms. Proof-of-Work would have been the go-to option because the two largest cryptocurrencies, Bitcoin and Ethereum are built on it.
But the limitations currently faced by both platforms, lack of scalability, network congestion, high transaction fees, and low throughput, among others, make it unsuitable for platforms looking to scale like Solana and Cardano. Proof-of-Stake also enables both blockchains to process transactions faster and offer low fees.
Both platforms were built to correct the deficiencies of the Ethereum blockchain and provide a better alternative to the growing industry of blockchain developers, creators, and investors. Doing this means maintaining a lot of the functionalities that Ethereum provides and sharing in the ultimate goal of a decentralized economy by enabling the creation of decentralized applications, decentralized finance, and smart contracts platforms.
Layer 1 blockchains
Solana and Cardano are both layer 1 blockchains. To understand this, Ethereum is a Layer 1 blockchain, but its current setbacks require that it adopts layer 2 solutions to scale. On the other hand, Solana and Cardano have their scalability possible on their main chains, do not necessarily need layer solutions.
Differences Between Solana Vs Cardano Protocols
SOL and ADA use the Proof-of-Stake consensus mechanism but add a twist through the protocols they adopt alongside the Proof-of-Stake. For example, Solana uses the Proof-of-History protocol alongside the Proof-of-Stake, while Cardano uses the Ouroboros protocol alongside the Proof-of-Stake. As a result, Solana's PoH gives it the cutting edge to process as many as 50,000 transactions per second, while the Ouroboros protocol allows 250 transactions per second on the Cardano blockchain.
Every platform eventually has to choose its poison since it looks impossible to have everything working at once. Solana chose to compromise on complete decentralization in order to get the speed limit its blockchain offers while Cardano chose to compromise on speed as regards development, to deliver on its promise to the blockchain industry.
Overview: Solana vs Cardano, similarities and differences
It's been interesting comparing Solana Vs Cardano in this article. The rate at which the growing blockchain industry constantly shortens how far a fully decentralized economy can be realized. The crypto market is filled with many projects, among which Solana and Cardano sit in the top 10.
Perhaps you're just about to get started in your crypto journey or looking for a better platform to trade cryptocurrencies, then Margex platform is the best place to visit. It is a global cryptocurrency exchange platform that offers multiple trading pairs, easy to use interface, and options to trade and profit from both the rise and fall constantly happening in the cryptocurrency market.
Is Solana the same as Cardano?
Solana is not related to Cardano. They are two different blockchain platforms with different philosophies, goals, and roadmaps. Although, they have several similarities.
Is Solana a more secure platform than Cardano?
It doesn't appear to be so. Solana has experienced about 6 outages with one lasting as long as 12 hours. Solana also has fewer validators on its blockchain, which reflects how secure the platform is. Cardano has a higher number of validators and is preferable for security.
Is Solana the best cryptocurrency in the market?
Solana is not the best cryptocurrency. However, it is among the top ten cryptocurrencies in the world by market capitalization and volumes traded.
Is Solana a good investment for me?
You get to determine this question by yourself after doing proper research. Solana has grown massively over a short time and offers high speed like very few do in the industry. Therefore, it looks promising and could be a good investment in the future. However, this is the cryptocurrency market, and nothing is certain. DYOR (Do your own research).
Is Cardano a better choice than Solana?
This is essentially a matter of preference. You get to decide which is better for you based on what you're looking out for in a blockchain platform. However the Solana vs Cardano debate is one that will continue for a long time.
Which is a better investment, Solana or Cardano?
This is also a decision you must make after doing your research. Solana and Cardano are both promising projects in the cryptocurrency space.