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Use case and comparison • Benzinga


Bitcoin was the first decentralized peer-to-peer cryptocurrency that introduced the world to blockchain development, planting the seed that would later become decentralized finance (DeFi). The development of DeFi has steadily grown in importance as new platforms are constantly being created to solve contemporary problems. Cardano is a Proof of Stake (PoS) blockchain platform that says its goal is to redistribute power from unaccountable power structures to individuals.

Bitcoin was originally created as a peer-to-peer currency, although over time it has become impractical for daily micro-transactions. Other alternative cryptos offer faster transaction times with lower fees – so where does Bitcoin get its value?

Many people often make the comparison: Bitcoin is the digital equivalent of gold. Like gold, Bitcoin is a scarce resource that a large number of people agree to value. Unlike heavy, continuously mineable gold bars, Bitcoin is easy to move and trade; is confined to a limited and capped supply of € 21 million; and is easily accessible to buy as little or as much as you want. These factors make Bitcoin, which has essentially been the pioneer of all decentralization, a particularly strong asset as it fundamentally owns the crypto market.

So what is the value of Bitcoin? Its purpose is a store of value. As an asset, this is something you allocate fiat to with the intention of receiving better returns and then letting your dollar suffer from inflation.

Cardano is a decentralized Layer 1 PoS blockchain platform designed to be a more efficient alternative to Proof of Work (PoW) networks. Cardano hopes to facilitate the development of decentralized applications (dApps) and different protocols with its recent deployment of the Alonzo hard fork. The biggest use case for Cardano is that it is currently used by agricultural companies to track different products, although users are adamant there will be a lot more applications.

Proof of Work (PoW) is the first blockchain verification mechanism introduced by Bitcoin, where computing power is used to verify transactions called “nodes”. Then came Proof of Stake (PoS), where instead of computing power, a financial stake is used to verify transactions. The point of sale locks out coins from a validator in exchange for the ability to verify transactions, effectively using them as collateral, so if a validator tries to be malicious, the in-game coins will be “cut” or some of them. Player’s funds will be lost as a punishment for misconduct. The action occurs by hosting staking pools. PoW quickly became an obsolete technology as it raises many environmental concerns as well as scalability issues.

Bitcoin’s current market cap is just over $ 1,000 billion, with an outstanding supply of 18 million BTC. Which makes it the largest cryptocurrency by market cap currently available. Cardano’s market cap is currently $ 70 billion, with an outstanding supply of ADA 32 billion, currently claiming its place as the 4th largest cryptocurrency by market cap.

Cardano recently launched Alonzo, a hard fork bringing smart contract functionality to the blockchain, although the real utility is some time since users are unable to rely on the network. Cardano’s Layer 2 network, the Hydra, has some adoption, but it’s not as popular as blue-chip cryptos like Ethereum. Ouroboros Hydra, a major scientific achievement and a milestone in Cardano’s development, innovates in the scalability of PoS. With Hydra, Cardano can truly become more energy efficient and more sustainable than alternative parts.

As mentioned earlier, Bitcoin’s primary use case is a store of value. Many investors buy it with the intention of holding it for an extended period of time as it appreciates in value. You can do the same with ADA if you are a supporter of the project, but it is also possible to stake your ADA in order to earn interest on the amount you are willing to allocate. Once smart contracts are fully operational on Cardano, ADA will have clearer use cases than today.

You can buy Bitcoin and Cardano on an exchange like Coinbase Global Inc (NASDAQ: COIN), eToro and Webull. A digital asset exchange is a great choice for people who want to start buying cryptocurrency. Be sure to do your own research before buying cryptocurrencies, as they are very volatile assets.

1 minute exam

eToro, headquartered in Cyprus, England and Israel, has been providing currency products and other CFD derivatives to retail clients since 2007. A major strength of eToro is its social trading operations, including OpenBook, which allows new customers to copy the best performing transactions from the platform. Its social trading features are top notch, but eToro is losing points for its lack of tradable currency pairs and underwhelming research and customer service features.

Best for

  • United States Based Cryptocurrency Traders
  • Social traders and copiers
  • Simple user interface
  • Community engagement and follow-up of other traders
Advantages

  • 25 cryptocurrencies
  • Extensive network of social trading features
  • Large customer base for new traders to emulate
The inconvenients

  • U.S. traders can only buy cryptocurrency

To start

securely via the Interactive Broker website

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Coinbase is one of the largest cryptocurrency trading platforms on the internet. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes buying and selling major cryptocurrency pairs exceptionally easy.

You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and improved functionality.

While Coinbase doesn’t offer the most affordable prices or the lowest fees, its straightforward platform is fairly easy for complete newbies to learn in a single transaction.

Best for

  • New cryptocurrency traders
  • Cryptocurrency traders interested in major pairs
  • Cryptocurrency traders interested in a simple platform
Advantages

  • The simple platform is easy to use
  • Full mobile app reflects desktop functionality
  • Coinbase Earn feature rewards you with crypto to learn more about available coins
The inconvenients

  • Higher fees than competitors

Bitcoin is a much safer investment than ADA, primarily because it supports the entire crypto market. ADA is also widely speculated at this point where Bitcoin has a very clear value that you may or may not believe in. ADA may have more growth potential if it succeeds with its smart contract integration. For Cardano to reach Bitcoin’s market cap, its total market cap would need to increase by over 1,400%.

The total market capitalization of all cryptocurrencies is around $ 2 trillion as of October 2021. The current structure of the crypto market looks bullish as Bitcoin begins a rally. If Bitcoin continues its uptrend, a generous increase in the total crypto market cap could occur.

From an investment perspective, Bitcoin is a safer investment. It is better established and has a much larger community. From a development perspective, Cardano could be better as it will soon have the ability to facilitate other dApps. Since ADA costs around $ 2 a coin with a market cap of $ 70 billion, a large influx of capital investment into ADA would be required for you to achieve significant returns. Do your own research before investing in cryptocurrency.

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.

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