The most common thing in this world is the formation of monopolies. I mean specifically that the most successful businesses tend to dominate their respective market. That is to say, the giant postpones the small. Which means that everything seeks to be concentrated in one center. One might think that the success of capitalism is due to competition. But that is what is sold in the official speech. If we go into details, we will find that the opposite is true. Is there room for two smart platforms? Cardano or Ethereum? Are they rivals to the death? Or is mutual existence possible?
Lately, Cardano has been in the news due to the dramatic rise in its price. What does that mean? Cardano is considered the “scientific” blockchain. Which could put Ethereum on a “unscientific” blockchain. Let’s say Ethereum is an “amateur” blockchain (laugh) and Cardano is a more serious blockchain. Cardano’s scientific rigor, in a sense, highlights the informality of Ethereum. Charles Hoskinson (founder of Cardano) is to Vitalik (founder of Ethereum) what Adam Black (expert cryptographer) is to Satoshi Nakamoto (creator of Bitcoin). We are talking about classical music, on the one hand, and, on the other, reggaeton. Men of books and men of the people. The former are right, but the latter are strong.
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Why has the price of Cardano increased so much lately? First of all, everything has increased lately. There is a lot of liquidity in the markets. And cryptocurrencies have benefited from that. Institutional capital has been investing in Bitcoin and naturally altcoins react. Further, The rise of stablecoins, Defi and NFTs on the Ethereum network has spread enthusiasm to everything related. Lastly, Cardano has generated headlines with its recent announcements. I’m talking about the launch of “Alonzo”. This is an update that will enable smart contracts. Another important news is that the currency is already listed on the Japanese stock market after authorization from the country.
Anyway, the The enthusiasm that we are seeing is due to the general enthusiasm and several positive news around Cardano specifically. Now let’s play devil’s advocate. Is this enough to “kill” Ethereum? A small coin due to its limited liquidity grows more percentage than a larger coin. In other words, it is sensitive to speculation to a greater degree. Here I am obviously referring to the volatility of the asset. In other words, we are talking about risk. At the moment, Cardano is being talked about as a total success due to its percentage growth. But we must remember that this is not necessarily the only criterion to weigh. After all, there are many fraudulent projects that have grown more percentage speaking.
In the investment world, a meme is an asset that speculators only buy because they think its price is going to go up. Why do you think that? Well, because they have contacted other speculators and a kind of conspiracy has formed. If we buy all of them, the price goes up. This phenomenon is very common in bullish times, because greed soars. Simply put, a meme (stock or currency) is an asset that lacks fundamentals. Its price rises exclusively thanks to pure and simple speculation. But deep down we are talking about an empty shell, because it lacks fundamentals.
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Cardano is not a meme coin per se. However, the increase in its price is due more to speculation than to fundamentals. It is buying on the news. But it is clear that the news in question does not merit such an increase. They are not without importance. But I mean relative importance. Let’s make, for example, the comparison with the fundamentals of Ethereum. Where is the Cardano community? Where are the star applications operating on that blockchain? Where are the Cardano developers? No, not Charles Hoskinson. I speak of others besides friend Charlie. Something is there, but not enough to rival Ethereum.
Let us suppose that an academic musician dedicated to playing the violin is a true virtuoso of the instrument. He released a new album and toured Japan. Well, I’m afraid that’s not enough to beat Lady Gaga. Lady Gaga is not a “scientific” scholar like the hypothetical violinist in our modest example, but she fills places in the blink of an eye. In this world, talent alone is not enough. Talent and audience are needed. Cardano has the talent, but does he have the people?
Ethereum can be copied from Cardano’s technology, but can Cardano build a community like Ethereum’s? The other big question: Is there room for two smart platforms in a world prone to monopolies? Of course it is possible for David to beat Goliath. Small can become big and giants fall. It’s possible. But it is not the norm. The odds tend to favor the giants. Precisely, the story of David and Goliath is so fascinating because of its exceptional nature. The event is clearly extraordinary. Many of us could easily cite many stories of fallen giants. But deep down we know that the stories of the little ones crushed by the giants are many more.
Many are investing in Cardano, because they see a future for it. Will Cardano be successful? Where will Cardano be in 10 years? We do not know. We return to the issue of risk. Cardano promises better returns, but, at the same time, it presents higher risks. One thing goes hand in hand with the other. Cardano is more potential and promise, than reality and people. Ethereum is more reality and people, but it is a giant will slow down over time.
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In our analyzes, the trend is one of oversimplification. Normally, everything is placed in the same bag and the intention is to categorize the assets from best to worst. Better in what way? We must remember that we are talking about investments. We cannot fall into the trap of radicals who always speak in absolute terms and are always posing false dilemmas. Bitcoin or altcoins? Bitcoin or Ethereum? Cardano or Ethereum? It is also possible to build a balanced and divorced portfolio by weighing the risks and opportunities of each element.
Personally, I tend to choose the giant in each sector when investing. The undisputed king in my portfolio is Bitcoin. But in the smart platform sector I’m going for the giant: Ethereum. Investing in a second smart platform, for me, would be to pay off. Of course I am a more conservative investor than the average crypto investor. I want to grow aggressively, but I also like to enjoy some stability. For me, size does matter. The volatility is attractive because of the high returns. But the more consolidated projects give me peace of mind. Cardano or Ethereum? Cardano and Ethereum? I do not know. It is a personal decision. Everything will depend on your financial strategy.
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Cardano or Ethereum? What is the best investment?