What Is Bitcoin?
Bitcoin first came into the public eye in 2009 and is widely regarded as the first established cryptocurrency in the market, and was created by Satoshi Nakamoto. There is still considerable speculation about the identity of Nakamoto, and the true identity has still not been established. If you read Bitcoin’s whitepaper, it describes the cryptocurrency as a decentralized, Peer-to-Peer electronic cash system. What led to the creation of Bitcoin? There was considerable speculation about Bitcoin being created in response to the 2008 financial crisis, intending to restore the balance of power back to the people from large banks and financial institutions.
Bitcoin functions on a public ledger, known as a blockchain, the transactions confirmed on the Bitcoin network are added to the blockchain. These transactions are verified by users, known as miners, who solve complex mathematical problems. Once the problem is successfully solved, the transaction is added to the blockchain, and the miner is rewarded.
The reward that miners receive is halved every four years or every 210,000 blocks. The current mining reward stands at 6.25 BTC. The total supply of Bitcoins has been capped at 21 million, and newer bitcoins are created at a declining rate.
- Also read: Bitcoin vs Ethereum: Which is a Better Investment?
- Also read: Bitcoin vs Bitcoin Cash: Battle Of The Forks
What Is Cardano?
Cardano is one of the fastest-growing cryptocurrencies globally and has already established itself in the top ten currencies in terms of market capitalization. Founded by Ethereum co-founder Charles Hoskinson, Cardano is often described as a third-generation blockchain that improves on and solves the persistent issues that plague first and second-generation blockchains such as Bitcoin and Ethereum. The platform’s native cryptocurrency is ADA, and it can be used to send and receive funds.
Positioning itself as an alternative to Ethereum, Cardano distinguishes itself from its peers through its focus and commitment to utilizing peer-reviewed research on the platform. Cardano’s protocols are peer-reviewed by academics and scientists from reputed institutions such as the Tokyo Institute of Technology and the University of Edinburgh. Cardano hopes to become a highly efficient and scalable alternative to Ethereum.
Also read: Cardano Vs Ethereum: The Smart Contract Platform Showdown
Also read: EOS vs Cardano: The Battle Of The “Ethereum Killers”
Bitcoin vs Cardano: Use Cases
Bitcoin Use Cases
BTC was created with a singular goal, to create a decentralized peer-to-peer electronic cash system. It removes the need for a centralized banking system and enables people to carry out transactions directly. The cryptocurrency gives individuals complete control over their funds, eliminating the need for any third party to be involved in transactions. Bitcoin has also emerged as a strong hedge against inflation and has seen its value as a store-of-value increase significantly, with several multinational companies and financial institutions buying Bitcoin to shore up their reserves and use it as a hedge against inflation.
Bitcoin has also found other use cases, some of which are.
- Donations to charity
- Bitcoin gift cards
- Peer-to-Peer transactions
- Cross border transactions
Cardano Use Cases
On the other hand, Cardano has a clearly defined roadmap for the future, with the team working on integrating smart contracts into the platform through the Goguen update. Cardano has not been tested in the real world, with the blockchain still undergoing integrations and improvements. However, the team behind it believes that Cardano will catch up or even surpass blockchains like Ethereum. Cardano has shown significant promise as a blockchain-based on peer-reviewed protocols and can easily support a variety of smart contracts and decentralized applications.
Cardano has partnered with the Ethiopian government to create a blockchain-based system that will track students’ performance in schools. You can read more about the partnership here. Cardano uses Haskell and Plutus as primary programming languages, with Plutus being used to compute smart contracts. A functional programming language, it is derived from Haskell. What is a functional programming language? It can be defined as a language that combines coding and advanced mathematics. Functional programming languages have a steep learning curve but allow developers to prove if a code is flawed or not.
Bitcoin vs Cardano: Consensus Mechanism
Bitcoin Proof-of-Work
BTC uses the Proof-of-Work consensus mechanism, which is used by some of the most popular cryptocurrency networks. As the name suggests, Proof-of-Work requires the miner or participating node to spend considerable effort solving complex mathematical problems. Let’s understand how this works. Transactions within a block need to be independently verified, which means that miners need to use their computational powers to solve complex problems. This is known as Proof-of-Work. However, Proof-of-Work is an energy-intensive consensus mechanism, with thousands of miners competing with one another to solve the cryptographic problem and earn BTC.
Cardano Ouroboros
Cardano uses Ouroboros, a unique Proof-of-Stake consensus mechanism. Ouroboros introduces the concept of epochs and slot leaders. The consensus mechanism splits time into epochs, which are then further split into slots. Each slot is assigned a slot leader who validates a block. Cardano has also put in place a system to ensure that slot leaders are chosen fairly.
- Users must hold a 2% stake in Cardano to be eligible to become slot leaders.
- Stakeholders with a larger stake have a better chance of being elected as slot leaders.
- If slot leaders cannot create a block, they are replaced and have to wait until they are reelected.
Ouroboros is the first protocol that is based on peer-reviewed research. It ensures the blockchain’s security and sustainability by combining mathematically verified mechanisms and technology. Ouroboros also addresses the scalability issue of existing blockchains, with Cardano’s blockchain being able to scale up to four million times the efficiency of Bitcoin.
Where Do I Buy BTC and ADA?
If you are interested in Bitcoin and Cardano, you can buy the tokens via CoinSmart. Buy cryptocurrencies with ease via CAD, EUR, and USD.
Bitcoin vs Cardano: In Closing
Bitcoin is used as a mode of payment, and it has seen several new use cases that have come into focus. It has gained popularity as a store of value and a hedge against inflation and volatility. Multinational companies are buying Bitcoin and shoring up their reserves.
Cardano has positioned itself as the alternative to Ethereum, with the team hard at work on the Goguen and Shelley updates that will see the integration of smart contracts on the platform. However, both cryptocurrencies have entirely different use cases, and a direct comparison between the two does not do either justice. Different users will find both useful, depending on what their preferences are.
