Contributor, Benzinga
October 18, 2021

Bitcoin is the first decentralized peer-to-peer cryptocurrency that introduced the world to blockchain development, planting the seed that would later become decentralized finance (DeFi). DeFi development has steadily gained ascendency as new platforms are constantly created to solve contemporary problems. Cardano is a proof-of-stake (PoS) blockchain platform that says its goal is to redistribute power from unaccountable power structures to individuals.

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Bitcoin As a Store of Value

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Bitcoin was initially created as a peer-to-peer currency, although over time it has become impractical for everyday micro-transactions. Other alternative cryptos provide faster transaction times with lower fees — so where does Bitcoin get its value?

Many people often make the comparison: Bitcoin is the digital equivalent of gold. Like gold, Bitcoin is a scarce resource that large numbers of people agree to give value. In contrast to heavy-to-lug, continuously mineable gold bars, Bitcoin is easy to move and transact; is confined to a finite, hard-capped supply of 21 million; and is easily accessible to buy as little or as much as you want. These factors make Bitcoin, which essentially pioneered the entirety of decentralization, an especially strong asset because it fundamentally holds the crypto market. 

So what is the value of Bitcoin? Its purpose is a store of value. As an asset, it is something that you allocate fiat to with the intent to receive better returns then letting your dollar suffer from inflation. 

Cardano as a Decentralized Computer

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Disclosure: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.

Cardano is a layer-1 decentralized PoS blockchain platform designed to be a more efficient alternative to proof-of-work (PoW) networks. Cardano hopes to facilitate the development of decentralized applications (dApps) and different protocols with its recent deployment of the Alonzo hard-fork. Cardano's largest use-case is that it is currently utilized by agricultural companies to track different produce, although users are adamant there will be many more applications.

Proof of Work vs. Proof of Stake

Proof of Work (PoW) is the first blockchain verification mechanism introduced by Bitcoin, where computing power is used to verify transactions referred to as “nodes.” Then came along Proof of Stake (PoS), where instead of computing power, a financial stake is used to verify transactions. PoS locks up a validator’s coins in exchange for being able to verify transactions, effectively using them as collateral, so if a validator tries to be malicious, the stake coins will get "slashed" or a portion of the staker's funds will be lost as punishment for misbehavior. The action occurs by hosting staking pools. PoW has quickly become outdated-tech as it raises many environmental concerns as well as scalability issues.

Bitcoin vs. Cardano Market Capitalization

Bitcoin’s current market cap is just over $1 trillion, with a circulating supply of 18 million BTC. Making it the largest cryptocurrency by market cap currently available. Cardano’s market cap is currently $70 billion, with a circulating supply of 32 billion ADA, currently claiming its spot as the 4th largest cryptocurrency by market cap. 

DeFi on Cardano vs. The Lightning Network 

Cardano recently launched Alonzo, a hard-fork bringing smart contract functionality to the blockchain, although real utility is a while out as users are not able to build on the network. Cardano’s layer-2 network, the Hydra, has some adoption, but it is not as popular as blue-chip cryptos like Ethereum. Ouroboros Hydra, a major scientific achievement and a significant milestone in the development of Cardano, breaks new ground in PoS scalability. With Hydra, Cardano can really become more energy efficient and more sustainable than alternative coins. 

Use Cases of ADA vs. BTC

As previously mentioned, Bitcoin’s primary use case is a store of value. Many investors buy it with the intent to hold it for an extended period of time while it appreciates in value. You can do the same with ADA if you are a believer in the project, but it is also possible to stake your ADA in order to earn interest on the amount you are willing to allocate. Once smart contracts are fully operational on Cardano, ADA will have more clear use cases than it does today.

Where to Buy Bitcoin and Cardano

You can buy Bitcoin and Cardano on an exchange like Coinbase Global Inc (NASDAQ: COIN), eToro and Webull. A digital asset exchange is a great choice for individuals looking to start buying cryptocurrency. Make sure to do your own research before buying cryptocurrency, as they are very volatile assets. 

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What Has More Room To Grow: ADA or BTC?

Bitcoin is a much safer investment than ADA, primarily because it backs the entirety of the crypto market. ADA is also widely speculated at this point, where Bitcoin has a very clear value that you either believe in or you don’t. ADA may have more growth potential if it succeeds with its smart contract integration. For Cardano to reach the market cap of Bitcoin, it would need to grow over 1,400% in total market cap. 

Current Cryptocurrency Prices

The total market cap for all cryptocurrencies is about $2 trillion in October 2021. The current crypto market structure seems bullish as Bitcoin begins a rally. If Bitcoin continues trending in the upward direction, a generous increase in the total crypto market cap could occur. 

So, What’s Better: Bitcoin or Cardano?

From an investment standpoint, Bitcoin is a safer investment. It is better established and has a much larger community. When it comes to a development standpoint, Cardano could be better because it will soon have the ability to facilitate other dApps. Considering that ADA is around $2 a coin with a $70 billion market cap, a large influx of capital investment into ADA would be necessary for you to see significant returns. Do your own research before investing in cryptocurrency.

Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts
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