As the cryptocurrency world eagerly awaits the September 12th arrival of smart contracts on the Cardano network, many have been wondering if this is finally the point in which one of the so called "Ethereum killers" can actually overtake Ethereum. This article will explore the debate between the two networks and offer some insight on the subject.
Cardano Finally Adding Smart Contracts
As stated in the introduction, after a very long and highly anticipated wait by the Cardano community, smart contracts are finally coming to the network. This has been one of the biggest glaring points of criticism for those either backing other blockchains or simply just speculating on Cardano's future value. That said, those criticisms can finally be laid to rest. As of September 12th, Cardano will officially be fully decentralized, have public staking, & support smart contracts, effectively placing it ahead of Ethereum's development (as the network already utilizes Proof-of-Stake) despite Ethereum having a two year development advantage.
Why are smart contracts so important for the future expansion of Cardano? For blockchains without smart contracts, it serves as a form of ledger that effectively tracks transactions & stores data. With smart contracts, the blockchain can then support programmable applications directly on the network in the form of decentralized applications (dApps). This includes things like DeFi apps & NFTs - precisely what Ethereum has offered as an alternative to Bitcoin.
How Could Cardano Overtake Ethereum?
Ethereum had the distinct advantage, and also subsequent disadvantage, of being the very first blockchain to fully utilize smart contracts and allow the development of dApps, a major network change from the more or less simplicity of the Bitcoin blockchain. However, being first also puts Ethereum in the driver seat for being the cryptocurrency guinea pig, allowing for alternatives to follow that improve upon the mistakes that the Ethereum network made.
Ethereum is currently beginning to integrate distinct changes to upgrade the network and make it more competitive with alternatives like Cardano, Polkadot, & Algorand. Some of these changes include the recent EIP-1559 which was aimed at making fees on the network more affordable and the integration of Polygon (MATIC) for the purposes of scaling the network. Ethereum 2.0 is a very anticipated chain that is completely changing the operational function of the Ethereum blockchain from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
However, with the integration of smart contracts on Cardano and the network already being PoS with international partnerships established (like the deal signed with the Ethiopian Government), the cards are on the table for Cardano to overtake Ethereum in overall development capabilities. Will this have any effect on the market cap of Cardano overtaking Ethereum? Well, lets compare:
Currently, the Ethereum market cap is estimated at approximately $379 Billion compared to Cardano's $90 Billion. ETH & ADA (the respective cryptocurrencies for Ethereum & Cardano) are both #2 and #3 in overall market cap value in the entire cryptocurrency market currently. Thus, it is not out of the question to believe that Cardano could in fact catch and pass Ethereum in the future should development on Cardano continue to expand & accelerate. Cardano has in fact been outperforming Ethereum by a large margin over the past year with a 2000% bigger ROI than ETH.
Is this something you should absolutely count on or should act on now by switching from Ethereum to Cardano? No, it is not our recommendation. The hype around Ethereum 2.0 offering massive improvements to the Ethereum blockchain is allowing ETH to soar. Not only that, but Ethereum is naturally the second most talked about cryptocurrency behind Bitcoin, with some even suggesting that Ethereum could actually overtake Bitcoin in total value in the future.
Summary
The development and launch (finally) of smart contracts on the Cardano network is a very exciting time, especially for those that have been patient within the Cardano community. Is this a sure fire sign that Cardano is now going to rocket to be the number 1 blockchain offering smart contracts and supporting development on the network? While anything is possible (especially within the world of the cryptocurrency market), this isn't something anyone should immediately count on - similar to the so called "flippening" between Ethereum & Bitcoin.
The most likely scenario for the future of the cryptocurrency market is the development & success of numerous blockchains, especially with the development of cross chain bridges, varying use cases, and niche market development of many networks. Each network is carving out their own users, their own objectives, and their own slice of the market. The most successful mass cryptocurrency adoption scenario could in fact be one that comes in the form of a new mega-internet of blockchains - each with their own value, use cases, and purpose. So, in summary - is it crazy to simply buy both?
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