Is Cardano Better than Ethereum?

There is no doubt that Ethereum has been the leader in the smart contract platform space. However, Cardano, which launched on September 29 and whose ADA tokens began trading on Bittrex on October 1, proves to be faster, with more concise maths and cheaper than Ethereum. Ethereum has been faced by, among other issues, high cost of maintaining, regulatory consequences and security issues.

It is the first full open-source decentralized public blockchain and cryptocurrency project based on peer-reviewed academic work and the first one to use the first cryptocurrency project based on the Haskel programming language. The project is overseen by the Cardano Foundation and was developed by IOHK engineering body in conjunction with the University of Edinburgh, the University of Athens and the University of Connecticut.

It will allow developers to build decentralized applications and contracts and run them in a low-cost, secure, private, scalable and legal environment. Cardano uses ADA tokens as the token of value that can be transferred between holders, used to pay for a good or service, exchanged with fiats or used to enter an application. The project uses a secure Proof of Stake system known as Ouroboros that improves on security of the ordinary Proof of Stake system.

Cardano will let holders own as many cryptocurrency addresses as they wish and they can receive and spend money from different addresses as they wish. For instance, a merchant can have one set of address for receiving money and issuing refunds and a separate personal “wallet” for their own needs. All the wallets will be controlled using a single interface, so you will not need to login in different platforms, making the process time efficient.

Cardano uses multi-layered protocols (two layers) -- the settlement layer that runs a unit of account and the control layer that will run the next-generation smart contracts. The layers are known as Cardano Settlement Layer (CSL) and a set of protocols called the Cardano Computation Layer (CCL).

Use of multi-layer protocols allows addition of advanced functions and balancing between regulatory and user privacy needs. The control layer will be programmed to recognize identity, assisting compliance and allowing blacklisting for instance.

However, central to the debate about a protocol that enforces regulatory compliance is how it will protect of users' privacy as many would want of an ideal cryptocurrency project. The system seeks to have no restrictions on flow of value, ensure sole access to their funds without coercion or civil asset forfeiture bu authorities, and give promise of immutability where history cannot be tampered with. It becomes the first cryptocurrency to balance two of these aspects: technology to protect privacy and take care of the needs of regulators.

Here's what makes Cardano better than Ethereum:

1. Cardano uses a more universally known programming language

Cardano is based on the widely accepted Haskel programming language to secure investment. It helps in writing code more precisely, resulting in a more secure and reliable protocol.

In fact, this will be the first cryptocurrency based on this programming language. Ethereum uses its own custom Solidity, a high level programming language that has similar syntax to the scripting language of JavaScript. The language, which was made to enhance the Ethereum Virtual Machine, was made to process verifying and enforcing constraints at the compile-time instead of run-time. With it, it is possible to create contracts for voting, crowd funding, blind auctions, multi-signature wallets and more. There is no regulatory focus in the framework when compared to Cardano's system.

The crypto uses a multi-layer protocol so that it can perform advanced functions. The foundation settlement layer has a unit of account while the control layer linked to this settlement layer runs the next-generation smart contracts. The control layer performs such functions as identity to assist in compliance and blacklisting, for instance.

In gaming and gambling, the control layer system can be employed in the verification of honesty of random number generation and game outcomes. The layer could, for instance, make it possible to accomplish fair distribution of winnings in games and similar tasks. Beyond gaming , it will be applied in identity management, credit system and many other applications.

Previously, the ability of blockchain to solve financial services problems in emerging markets was hampered by regulatory challenges, identity management, KYC, lack of financial history and high fees. With Cardano, not only will developers be able to build ingenious applications and complete financial stacks using the CSL and CCL, they can take advantage of the full compliance, low cost of KYC and fees to extend their services to billions of unbanked masses.

The system is designed to be upgraded by way of soft forks.


2. Cardano already uses Proof of Stake consensus algorithm

Ethereum, in comparison, uses Proof of Work consensus algorithm, where miners solve a cryptographic puzzle to reach consensus on the state of the ledger. This has many troubles of its own including miners needing expensive physical resources to mine and the fact that it is energy intensive to do so.

In proof of stake, instead of wasting electricity on solving computationally heavy problems to mine, a node is selected to mint a new block with a probability proportional to the amount of coins held by the node.

Poof of Stake reaches consensus by votes by coin-holders. The proof of stake in Cardino is known as Ouroboros, which has been previewed by different people and was accepted at the Crypto 2017 conference, proves to be more energy efficient. It enables faster transactions and opens the door to governance schemes in that coin holders can have a say in the evolution of the protocol.

Realizing the benefits of Proof of Work, Ethereum is working on a similar project coded Casper which seeks to solve the "nothing at stake" problem in the Proof of Stake algorithms. It is yet to be implemented.

3. Proof of security; more security on Cardano

Developing a secure system in the face of Proof of Work is not easy. To achieve good security, Cardano's Ouroboros uses a mathematical proof of security. The proof of security system is based on persistence and liveness properties of a robust transaction ledger and which are hard to break by an adversary. Persistence mandates that all nodes do not disagree when a transaction becomes stable and liveness requires that all honestly generated transactions eventually become stable.

In other words, users get the same level of protections to bitcoin when transacting on the CSL but a higher speed and transactional capability as a result of its PoS rule.

4. In-built cryptocurreny-to-fiat exchange in the wallet

Cardano also has Daedalus, a cryptocurrency wallet application that will be universal, meaning it will handle all currencies and it will have automated cryptocurrency trading and cryptocurrency-to-fiat transactions.

For now, those who want to buy ether will need to use a cryptocurrency exchange service, buy with Bitcoins or use fiat exchanges such as Kraken to buy ether with Euros or Dollars and other fiat money.

5. More regulation-versatile

Most cryptocurrency projects including Ethereum, were originally meant to allow individuals to transact directly with anonymity with each other outside the control of banks and governments. Although this guarantees the individual's right to privacy in financial dealings, full anonymity can be counterproductive according to Cardano as can completely lack regulatory oversight.

Today, some cryptocurrency projects are already looking it positively to list as securities while most others want to advance aims of privacy. Cardano thinks that finding the right mix between individual privacy protection and provision for regulatory control is the best answer for a crypto project to be globally effective. It is the first of its kind to have a tech system that balances regulation and privacy.

6. Based on peer-reviewed academic research

Cardano, boasts as the first cryptocurrency to be based on published peer-reviewed academic research. The Proof of Work itself had to be proved to work mathematically. The project was developed by IOHK in conjunction with the University of Edinburgh, the University of Athens and the University of Connecticut.

As a result, it combines various disciplines including distributed systems, mechanism design and cryptography to build-up from scratch to make it stronger than modern systems while adding future extensibility, security, regulatory compliance, and complex functions.

In terms of extensibility, Cardano is a general purpose cryptocurrency that will enable and connect with domain specific cryptocurrencies such as Ethereum Classic. This allows participants of any innovation developed via domain specific cryptocurrency to hold value in a general purpose cryptocurrency. Such applications include identity management, gaming and gambling, and verifiable computations.

7. Airtight governance

Many cryptocurrencies are based on crowd-based governance models which allows democratic control of network by participants, which allow the building of truly decentralized economies. However, problems have resulted when these systems are not properly designed.

Both Bitcoin and Ethereum have experienced problems in terms of the question of how to upgrade their networks, and has caused a split in the Ethereum's case. Because of the problems related to suggesting projects and voting for the same in Ethereum and Bitcoin, both have long standing, infrequent cases and unresolved arguments over the technical and moral direction of the codebase. When a decision is taken, there is usually fracturing of community. These are a direct result of a lack of formal processes for debating change according to Cardano, which seeks to solve that.

The Cardano blockchain has an airtight governance model that allows the community to democratically take clear and binding decisions.

Their blockchain will include a formal, blockchain based system to propose and vote on both soft and hard forks. According to Cardano, the possibility to propose a protocol change in a transparent, censorship free way with blockchain based voting can help avoid the mentioned problems. Better incentives to coin holders can also help to improve participation in Cardano project. This is in addition to using formal methods, machine understandable specifications and merging a treasury with process for financial incentives.

Every ADA holder can take part in the voting. Users will be able to vote on the changes they want to see on the protocol and to decide on what gets funded, most likely though competing development teams; marketing efforts; hackathons and venture capital. The governance and voting system will allow the system to evolve over time, while funding itself sustainably through a visionary treasury system.

The treasury system allocates a percentage of the block reward into a pool that is used for covering network costs.

David Kariuki

David Kariuki likes to regard himself as a freelance tech journalist who has written and writes widely about a variety of tech issues that affect our society daily, including cryptocurrencies (see and; climate change (, OpenSim and virtual reality (see He is currently pursuing a MSc in Environmental Management at Open University. He does write here not to offer any investment advise but with the intention of informing audience, and articles in here are of his own opinion. Anyone willing to use any opinion here as advise to invest in crypto should obviously take own responsibility and accountability of their losses (or benefits) thereof. You can reach me at [email protected] or [email protected]

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