Chapter 1: Understanding Ethereum's Landscape

Ethereum has emerged as the preferred blockchain platform for numerous developers focused on decentralized applications. It boasts the largest developer community, even surpassing Bitcoin, due to its strong emphasis on technology and developer engagement. However, a growing number of ambitious projects are positioning themselves as serious contenders for Ethereum's dominance. Following my in-depth analyses of Cardano and Polkadot, I aim to compare these two platforms today. Which one comes out on top? (Last updated 15.11.2021)

Photo by The Humantra on Unsplash — edited by the author

After several years of meticulous development, the initial phase of Ethereum 2.0 (Is There Still Some Potential Left in Cryptocurrencies?) has finally been launched. This significant upgrade has been in the works since 2015. Naturally, altering critical components of an operational system is far more challenging than building anew. Consequently, many former Ethereum developers have seized the chance to create their own blockchains.

Section 1.1: Cardano's Emergence

Cardano (ADA) has established itself as a leading smart contract platform within the cryptocurrency sphere. Founded by mathematician Charles Hoskinson, who was a co-founder of Ethereum, Cardano has made headlines with the recent rollout of its Shelly upgrade on its mainnet. This upgrade enables staking on Cardano, similar to the advancements seen with Ethereum 2.0. Shelly is merely the second phase in a series of four planned upgrades, ultimately aiming to create a scalable blockchain for smart contract development.

Cardano intends to implement an on-chain governance model, allowing any ADA holder to participate in decision-making. It is projected that Cardano will excel in applications across financial and organizational sectors, largely due to its use of Haskell—a programming language that aligns well with business applications and data analytics. Additionally, Cardano has introduced its first stablecoin, AgeUSD.

Subsection 1.1.1: Exploring Polkadot

Gavin Wood, another co-founder of Ethereum, recognized the limitations of Ethereum’s design while serving as its Chief Technology Officer. This realization led him to draft the Polkadot whitepaper in 2016. According to crypto analytics firm Messari, Polkadot distinguishes itself through both its innovative design and a rapidly growing community. Over 250 projects, from stablecoins to social networks, are currently being developed on the network, which launched in May.

Unlike Ethereum, which relies on smart contracts operating on a single blockchain, Polkadot enables developers to create their own blockchains known as "Parachains." These Parachains are interoperable, facilitating communication between different blockchains and allowing developers to tailor their blockchain's transaction fees and processing speed.

Gavin Wood is optimistic about the innovative products that will emerge on Polkadot, particularly in areas where Ethereum’s smart contract framework may not be as effective. He envisions a fully decentralized and anonymous web, encapsulated in the concept of "Web 3.0."

Chapter 2: Investment Perspectives

In the video "Cardano vs Polkadot | Charles Hoskinson and Lex Fridman," the discussion delves into the strengths and weaknesses of both platforms, offering insights into their respective futures.

The second video, "Polkadot vs. Cardano Comparison: Ready to Bring Web 3 Mass Adoption?!," explores how each platform is positioned to facilitate the mass adoption of Web 3 technologies.

As of November 5, 2021, the success narratives of Cardano and Polkadot continue to unfold. With prominent players like Microstrategy and Square entering the cryptocurrency arena, there's a renewed interest in alternatives to Ethereum. Visa has also begun implementing native support for cryptocurrencies.

Currently, Cardano ranks as the fifth-largest cryptocurrency by market capitalization, followed closely by Polkadot at ninth. A report from Outlier Ventures noted that Cardano is among the most evolved protocols, trailing only Ethereum, while Polkadot has seen a significant increase in active developers.

Investors are increasingly viewing Ethereum as "too expensive," with transaction fees rising, as per data from Glassnode. Although both Cardano and Polkadot have distinct advantages, neither has yet surpassed Ethereum in prominence. However, with Ethereum 2.0's full deployment likely years away, the landscape may shift rapidly. Despite Ethereum's established trust with investors, both Cardano and Polkadot are on paths that could lead to significant advancements in the blockchain space.

Update 09.2021: Ethereum Price Target: $35,000