As Steve Balmer famously and sweatily said, the platform game is all about winning developers, developers, developers…
This is certainly true if you are pitching a better platform than Ethereum. Your success is totally dependent on traction with developers. In this post we seek the developer view of one of 4 so-called “Ethereum killers” – Cardano.
In the following weeks we will do similar analysis for:
Note: there are more but we chose to limit to those in top 100 on CoinMarketCap (below that is like Small Cap Hell in the equities stockmarket or like Page 2 in Google search i.e. you are invisible).
Here they are in a recent market cap comparison (snapshotted last week, contents may have shifted in flight):
We show Ethereum for comparison.
The Ethereum-killer version 3 narrative
Version 1: Bitcoin = limited scripting language
Version 2: Ethereum = Turing complete “build whatever you like”
Version 3: Ethereum-killers = Turing complete done right.
The developer view
The developer view is forward looking fundamental analysis (which is what we specialize in on Daily Fintech). If developers like the platform today, investors will be more likely to like the platform tomorrow.
So we asked a developer called Saurabh Chaturvedi to look at these platforms and assess them on 4 axes:
1. Transactional Scalability. In simple terms, how many Transactions Per Second (TPS)?
2. Security. No point in having high TPS if funds can be easily stolen/lost. There are usually trade offs between 1 and 2.
3. Functional Scalability. How easy is it to build apps on this platform?
4. Developer enthusiasm. If you are not technical, it is hard to understand the arguments for and against 1,2 and 3, but a reasonable proxy is an active developer community and one way to see that is to look at activity on Github.
Here is what Saurabh Chaturvedi told us about Cardano
Introduction to Cardano: Cardano is the home of ADA cryptocurrency, which is often compared with Ethereum’s own ETH. Cardano was founded by one of Ethereum’s co-founders and it claims to be the first blockchain project to be developed from a scientific philosophy, and thus better suited to performance and mission critical applications.
Cardano Transactional Scalability: The challenge is that blockchains were not actually designed to be scalable. The blockchain protocol depends upon many people/nodes possessing a full copy of the blockchain data – the data is distributed across all the “nodes”. This sounds cumbersome, but it is the very method which enforces trust in the blockchain system and ensures high security and availability. Blockchain based exchanges have a lot of work to do with their scalability if they want to compete well with their traditional payment peers – the Ethereum blockchain currently supports just about 15 transactions per second, whereas Visa supports 45,000. Cardano folks are serious about this problem. They’re going to employ new techniques in their consensus algorithm, called Ouroboros, to tackle scalability. Ouroboros “permits a decentralized way to elect a quorum of consensus nodes, which in turn can run more traditional protocols” which allow room for scalability. According to Cardano’s official website, “scaling methods will be applied to Ouroboros starting in 2018 and continue to be a focus in 2019 and 2020.”
Cardano Security: Since a blockchain-based exchange does not involve a central party, security is critical. Cardano say “We have placed security at the core of our philosophy.” They claim Cardano is a blockchain with privacy and regulation. Enabling this primarily involves a multi-layer architecture – having a Cardano settlement layer and a Cardano computation layer. The platform is also going through a third-party audit to verify the strength of its security features, among other things. Furthermore, Cardano is one of the first blockchains to be built on the Haskell programming language, which simply enables more security out of the box, compared to, say, C++, which implements Bitcoin.
Cardano Functional Scalability: Cardano’s Turing complete scripting language is Plutus. The syntax is very similar to that of Haskell, and thus falls into the paradigm of “functional programming”. That may be a bit difficult to learn compared to Solidity – a very readable scripting language from Ethereum. Solidity reads very much like Python, a very popular programming language focusing on readability. Thus, developers familiar with Python can pick up Solidity pretty quickly. Moreover, since Cardano is a relatively new, 3rd generation blockchain platform, its community isn’t as evolved as that of Ethereum, which can be a problem to developers, who often rely on community for technical support and debugging purposes.
Cardano Developer Enthusiasm: The Cardano community is evolving. There have been a significant number of developers who have already deployed their distributed apps (dApps) to Ethereum and have documented their journey. On the other hand, most developers are still “trying out” Cardano. On Reddit’s r/programming subreddit, home to almost a million programmers, there are a ton of posts about developing dApps with Ethereum, but zero posts mentioning Cardano, as of this writing. There is a popular subreddit r/cardano but it doesn’t focus on building dApps on the platform. Similar are the trends on GitHub – you’ll find more projects involving the Ethereum platform than Cardano. The difference even goes to the extent that code involving Ethereum has more stars (GitHub equivalent of likes) than those of Cardano. But don’t forget that the Cardano developer trends are slowly “steaming up”, and they may very well get strong enough to compete with Ethereum, but that won’t be happening in the near future.
Finally, here’s what Google Trends show for Cardano vs Ethereum.
For some reason, Cardano is more popular than Ethereum in Italy (maybe because it sounds Italian?)
Tell us what you think in comments. Whether you are a developer or an investor, please tell us what you think about Cardano (and what other Ethereum-killer platforms we should be looking at).
You can reach out directly to discuss our advisory services by sending an email to julia at dailyfintech dot com
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