It’s no secret that Cardano (CCC:ADA-USD) draws many comparisons to Ethereum (CCC:ETH-USD). After all, it was founded by Charles Hoskinson, who was also a co-founder of Ethereum.
So, there’s bound to be comparisons made between the two projects. Some pundits even expect Cardano could one day overtake Ethereum in terms of importance.
If that happens, it will be because of the differences between the projects. In other words, in its theoretical rise to the top, Cardano will avoid the mistakes that Ethereum made.
What Sets Cardano Apart
One way to characterize the differences between Cardano and Ethereum is in their approaches. Cardano is the more academic of the two. If analytical rigor is what matters to you, then Cardano will be an attractive investment.
That was extremely obvious in an episode of Lex Fridman’s podcast, in which he interviewed Ethereum’s Vitalik Buterin. The Ethereum co-founder described Cardano thusly:
“They really emphasize having these big academic proofs for everything, whereas Ethereum tends to be more okay with heuristic arguments in part because it’s just trying to do more, faster.”
That leads to a hypothetical question for those who are deciding to invest in one or the other: Do you value speed and following rules of thumb, or are you a more methodical, empirically-driven investor?
Fridman stated that he is a big believer in deep research as it relates to cryptocurrency. Buterin responded that “deep rigor is overrated.” He goes on to state that failures “outside the model” are more important than failures inside the model.
Essentially, Buterin is arguing that mistakes and experiences are the best teacher. While Ethereum takes this approach to growth, Cardano first proves the theory and then moves on it.
The Fundamental Question
That raises another fundamental question in the Cardano versus Ethereum debate: Do you think Ethereum has already made critical mistakes that opened the door for Cardano to overtake it? After all, Buterin readily admits that Ethereum prioritizes speed first. But as the maxim goes, haste makes waste.
If that is the case, then Cardano may already have won the bigger battle. Or, if Ethereum hasn’t already made some form of critical mistake, it could in the future.
Buterin makes another assertion, though. He seems to imply that Cardano may be helping others rather than itself. He says, “A lot of the academic approach ends up basically optimizing for other people inside of the academic system.”
Maybe it’s a good point. But I don’t think Cardano pundits will be swayed by it. In any case, Cardano is playing the long game — and its slow, methodical approach may be paying dividends soon.
How 2022 Looks for Cardano
It wasn’t long ago that Cardano undertook the Alonzo hard fork, introducing smart contract capabilities to the network. Some sources expect that “by the end of 2022, there could be more than 250 decentralized applications, DeFi platforms, launchpad and more on the network.”
That’s simply a prediction. It may be valuable, or it may not. But it does lend credibility to the notion that Cardano is moving toward some sort of snowball effect. In other words, it may reach a sort of critical mass, at which point it can’t be slowed. If that occurs, it’ll be a testament to the long-term approach it has adopted.
I remain a fan of Cardano’s philosophical approach. ADA is down since September. In that time frame, it has more than halved. That naturally leads to short-term questions of its validity.
But on the other hand, ADA was up more than 500% at the end of 2021. That’s truly impressive for what can be considered one of the most conservative cryptos out there. Ultimately, I still believe its approach will make it successful over the long term.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
