Cardano & Ethereum (A Tale of the Tortoise and the Hare)
This past weekend I went on a short trip to Bend, OR to backpack with a friend of mine named Nick who introduced me to block-chain and crypto currency starting in 2015 or 2016. Our hike left plenty of time for talking about various technologies related to crypto but it wasn't long before we started into a disagreement about the 2 leaders in the Layer-2 crypto space, Cardano and Ethereum. On one hand I believe Cardano will provide the protocol & currency that is widely adopted throughout the world. Nick believes Ethereum will take this crown. As the conversation deepened, it became clear that our beliefs stemmed directly from the principles each company abides by, but that I did not truly understand the differences between these approaches. Needless to say, without an understanding of the differences in company philosophy, it's hard to know who could be the ultimate winner. The ramblings below serve to outline the core principles of each company and how these principles affect timelines for growth and feature-sets moving forward. I hope you enjoy and learn some things along the way as I know I have. Also, a thank you to Nick for constantly pushing my knowledge!
IOHK & The Cardano Foundation:
Started in 2015, Cardano was created following a dispute between Vitalik Buterin and Charles Hoskinson, both of whom helped Co-found Ethereum. The dispute was centered around the principles that would govern growth and scaling from a business standpoint for Ethereum moving forward. Charles believed in a for-profit model of development whereas Vitalik wanted to keep Ethereum open-source/non-profit. This dispute and separation from Ethereum meant that Charles and Cardano needed to start from the ground up and produce all assets and features of Cardano from within - no more reliance on an open-source community.
One of the primary pain points for a Layer 1 cryptocurrency is the lack of efficiency and scalability. Bitcoin is the poster child for these weaknesses, with Ethereum initially falling into this group as well (this has since changed for Ethereum but remained true until recent years). Large amounts of energy and computing resources are consumed to verify the transactions using a Proof-Of-Work protocol whereas Cardano implemented a Proof-Of-Stake mechanism from the get-go to alleviate these issues.
Another distinction that Cardano has is in the coding language it is built on, Haskell. Invented in 1990, Haskell is a statically typed language designed to integrate well with mathematical formulas and algorithms as well as providing extremely high degrees of reliability and security within the language itself. Considered a purely "functional" language, Haskell functions are designed to run with essentially no chance of unintended side-effects elsewhere in code. This is a crucial point in it's comparison to Ethereum, whose coding language Solidity is more akin to JavaScript which has no such feature (or limitation depending on which camp you're in). I have started playing around with Haskell, and the basic gist is the language is built of tiny interconnected pieces of code that are effectively isolated, meaning one chunk of code can only run one way and cannot be modified without breaking the entire "process stack" of functions. Security and reliability are the name of the game here with an added benefit of efficiency.
These features are why I equate Cardano to the Tortoise in this fairy tale - they appear to be the "wise" cryptocurrency that learned from the large player's (Ethereum/Bitcoin) mistakes. So far, Cardano has released and supported the following features:
- Proof-Of-Stake using Ouroboros protocol
- Desktop and Mobile Crypto Wallet Clients
- Stake Pools and Decentralized Community
- Smart Contracts (apparently this release didn't go so well this September. I'll have a blog post discussing what happened. )
Being a Tortoise isn't all sunshine and rainbows however.
Cardano's funding, research, and verification model of development means that producing a working and vetted feature within the Cardano ecosystem can take a LONG time. IOHK and Cardano also gave up features and abilities that are retained within Ethereum including a faster pace of innovation, inherent full decentralization, and an arguably much lower bar to cross for users to develop on the Ethereum blockchain.
The Ethereum Foundation:
Ethereum is the brainchild of Vitalik Buterin, a Russian born developer and computer scientist. Vitalik first gained notoriety when the Bitcoin Whitepaper caught his attention in 2009/2010. Vitalik’s interest eventually pushed him to co-found the Bitcoin Magazine in 2011 where he continued to create posts about cryptocurrency and decentralized economics. During this time, Vitalik learned of the limitations of something like Bitcoin and understood that changes and features would need to be added if this were to scale appropriately. Starting in 2013, Vitalik began writing his own Whitepaper for a new currency, Ethereum. Ethereum was designed to fill holes in Bitcoin’s functionality while also allowing for increased involvement from outside developers - hence the eventual creation of the Ethereum Foundation in 2014.
The Ethereum Foundation describes itself as the following:
“The EF is not a company, or even a traditional non-profit. Their role is not to control or lead Ethereum, nor are they the only organization that funds critical development of Ethereum-related technologies. The EF is one part of a much larger ecosystem.”
In other words, development work is not done directly by developers hired by Ethereum, but rather grants and funding/resources are given to those who simply work within the Ethereum ecosystem. This open-source style of development means that many more people are working on the Ethereum blockchain at a given time in comparison to Cardano, but that work might not be synced together. Changes to the blockchain and features are rapid meaning “cool stuff” can be made quickly and easily. The link below shows the the myriad of ways you can get involved with Ethereum and contribute to it’s development:
https://ethereum.org/en/community/
This is where my personal hesitation on Ethereum comes in. When I visit that site as a business, I have no idea who to contact or what central agency can help me implement Ethereum into my business. It’s up to me to know how I want to implement the blockchain into my business and up to me to find developers from there. Cardano on the other hand, has a handy link and a physical address helping to establish a physical presence similar to what companies are used to dealing with now. The link below illustrates this.
https://iohk.io/en/contact-commercial
Working in IT, there are governing bodies and agencies which set protocol standards to support security and reliability of hardware and software. Without these organizing bodies, technology in Enterprise environments would be the “wild west” and invariably efficiency & reliability would go down. These standards are why I can reliably connect an HDMI cable to any HDMI port and it “just works”. By structuring a foundation like Ethereum has, I worry that development work might get disorganized or be a source of frustration for a typical business to implement. On the other hand, Cardano and IOHK are unbearably slow to develop and implement so it has it’s own downsides.
Regardless of all of these facts, I can’t say reliably where either of these will go in the future which is why I hold both currencies. Maybe Ethereum is too ahead of it’s time and Cardano is stuck in the past? Maybe there is a middle ground that someone will snatch up? I hope you learned as much as I did in this post....This is not meant to advise investment decisions but merely to provide context for the vision of these companies (or foundations). Let me know your thoughts in comments below or on Twitter!













