Have you made up your mind? You can buy ADA and SOL on Coinbase.
Both Solana and Cardano have had a fantastic year, and investors are planning to compete with Ethereum, which is currently plagued by scalability issues. While Solana and Cardano share a similar premise, the way each coin runs decentralized applications (dApps) and facilitates rapid currency transactions is very different.
Is Solana better than Cardano? Start with the Benzinga review to find out more now.
What is Cardano?
Cardano was founded in 2015 by Charles Hoskinson, co-founder of the Ethereum network. Hoskinson acknowledged that the transaction throughput of Proof-of-Work (PoW) blockchains like Ethereum was too low for widespread adoption.
PoW forces miners to use their computer’s processing power to validate transactions by solving complex mathematical problems. This requires large amounts of energy and processing power, only for a relatively small number of transactions to be processed on the blockchain.
Hoskinson started working on a Proof-of-Stake (PoS) blockchain. PoS issues new cryptocurrency to those who bet it, rewarding them for using their cryptocurrency to validate transactions through nodes.
Cardano is a 3rd generation decentralized PoS blockchain that uses the Ouroboros consensus mechanism. The native token of the Cardano blockchain is ADA, named after mathematician Ada Lovelace, who laid the foundation for modern programming. Ouroboros uses a system of slots and eras to measure time. Slots last 1 second and Epochs last 5 days.
During each slot, a lottery takes place. The odds for this lottery are determined by the amount of currency put into play by each node. The larger the bet, the higher the chances of being selected as the slot machine leader. Once selected as the leader of a slot machine, the slot machine manager can validate transactions and earn rewards.
Actors can also come together and nominate a few holders to represent the entire pool while the protocol is running. This allows those with low stakes to easily have a chance of winning a slot machine lottery. It also ensures that blocks are always added to the chain, even when some members of a pool are offline. You can think of this as mining pools on a proof-of-work blockchain.
At the end of each epoch, the protocol distributes rewards in proportion to the cryptocurrency stake a user had during the epoch. These rewards motivate players to keep validating blocks.
The staked ADA should only be present when these network snapshots are taken. Between locations, the staked ADA can be moved and used in Decentralized Finance (DeFi). This sets Cardano apart from other PoS blockchains, in which the staked currency is locked once staked.
In addition, Cardano uses RINA (Recursive InterNetwork Architecture) to essentially divide the network into smaller subnets, which can handle a large volume of transactions.
Cardano recently completed the Alonzo fork, which added smart contract capability to the network and makes it easier to build decentralized applications (dApps). However, the rollout of this upgrade has not gone smoothly and the apps are still being rolled out on Cardano’s blockchain.
What is Solana?
Solana was created in 2017 by Anatoly Yakovenko who was looking to create a platform for dApps that could offer scalability and flexibility. Solana seeks to create a network capable of handling huge transaction throughput using a proof of history consensus mechanism before applying the PoS mechanism. This allows Solana to achieve high speeds at Layer 1, and it eliminates the need to use Layer 2 solutions or sharding to better scale its blockchain.
Solana offers smart contracts, which can be linked to create dapps. Solana has a strong network of dApps, with over 250 applications that have been launched, including NFT markets and Decentralized Exchanges (DEX).
Solana has 8 basic technological features, and each of them has been designed to maximize speed. Solana uses a Tower BFT consensus system as a PoS layer. Anyone with SOL tokens can participate in validation and governance.
DeFi applications built on Solana include Project SEED and Star Atlas, with game developers choosing Solana because of its high speed and ability to create NFT elements for these games at low cost.
Solana vs. Cardano
Solana has a much more developed ecosystem than Cardano, with more operational applications currently online and even more underway. Simply, the Solana ecosystem is more developed than the Cardano ecosystem.
While Solana may support a more robust ecosystem at the time of writing, serious concerns have been expressed about centralizing the network. The Solana Foundation is the only central node, which gives it enormous control over the direction of the network. Several large wallets hold a large portion of the currency supply.
Cardano, on the other hand, is completely decentralized. The community is made up of participating pool operators and controls all block production on the network. This makes Cardano a much more decentralized network and more resistant to single party influence.
How to buy ADA and SOL
SOL and ADA are the major cryptocurrencies and are listed on most of the major exchanges, such as Coinbase. Coinbase has a friendly user interface and provides a smooth experience on PC and mobile devices.
Coinbase keeps 95% of its cryptocurrency in offline cold storage, making it a reliable exchange. Coinbase currently offers a great program called Coinbase Learn, which allows you to earn free cryptocurrency by watching short videos on blockchain technology.
Step 1: Open an online account.
Download the Coinbase app, follow the onscreen prompts to create an account by setting up an email account, password, and enabling 2-factor authentication for additional account protection.
After completing the credentials to meet US Know Your Customer (KYC) standards, you will be able to purchase cryptocurrency.
Step 2: Buy a wallet (optional).
For added security, you can transfer your cryptocurrency to a wallet.
Best Hardware Wallet: Ledger
Hardware wallets store cryptocurrencies offline. The user’s private keys, which are used to authorize transactions, are stored on the Ledger device. This process keeps the keys offline and away from hackers who might gain access to the keys from an online location.
Best Software Wallet: Zengo
ZenGo is a mobile application that offers a non-custodial wallet to store private keys. In addition to being a wallet, ZenGo allows users to purchase cryptocurrencies within the app.
Step 3: Complete your purchase.
Look for ADA and SOL on the pricing page. Go to the buy button and choose to buy by linking your bank account or with a credit or debit card. After previewing and completing the transaction, you will now own SOL or ADA.
Are Solana or Cardano the best investment?
While ETH remains plagued by high gas fees and a slow transition to PoS, ADA and SOL appear to be among the pioneers that could possibly challenge ETH. While the ADA is likely to continue to climb, the stronger ecosystem on SOL appears to hold more promise.
Investors seem to think that SOL also has more potential, as it recently overtook ADA in terms of market capitalization, which reflects the size of a project. Do your own research before investing in Solana or Cardano.
Benzinga has developed a specific methodology for classifying cryptocurrency exchanges and tools. We prioritized platforms based on offers, prices and promotions, customer service, mobile app, user experience and benefits, and security. To see a full breakdown of our methodology, please visit our Cryptocurrency Methodology page.