Algorand [ALGO] vs Cardano [ADA] – Difference, Partnerships & Ecosystem – Which is Better?
The ‘Trilemma’ of Blockchain space – Scalability, Security, and Decentralization – are the three things every blockchain is trying to solve simultaneously. But it’s easier said than done, as proven by the scalability issue faced by Ethereum. Higher scalability transcends to higher market adoption.
This is where Cardano and Algorand have come into the picture. They have their similarities and differences that seem to work for them for now. Rather than telling you which one has more potential, it’s better to present the entire case and let you decide how they fare against each other.
Star Player of the Team
Anyone would agree that having a renowned and accomplished team player always gives a boost to the project.
Cardano’s Charles Hoskinson
If the name seems familiar, that’s because he is also the co-founder of Ethereum. A tech entrepreneur and mathematician with an interest in analytic number theory, Charles Hoskinson moved into blockchain space in 2013. He co-developed the Ethereum blockchain with Vitalik Buterin before leaving the project in June 2014.
Hoskinson joined crypto and blockchain research firm IOHK to develop Cardano and since then has sponsored various blockchain research labs at the Tokyo Institute of Technology and the University of Edinburgh. He also founded Invictus Innovations.
Hoskinson was the founding chairman of the education committee of the Bitcoin Foundation and established the Cryptocurrency Research Group in 2013. His current focus lies in educating people on the use of crypto and decentralization.
Algorand’s Silvio Micali
Unlike the innovators of other blockchain projects, Silvio Micali is already a famous name in cryptography long before he started developing Algorand. Deemed as one of the top cryptographers, he is a recipient of the prestigious Turing Award in 2012 and RSA prize for cryptography, Gödel Prize (theoretical computer science) in 1993, and ACM fellowship in 2017.
Micali’s work spans around public-key cryptosystems, pseudorandom functions, digital signatures, oblivious transfer, and secure multi-party computation among others. In 1989, he co-invented Zero-Knowledge Proofs with Shafi Goldwasser and Charles Rackoff. He also developed Peppercoin, a cryptographic system for processing micropayments.
A professor at MIT’s electrical engineering and computer science department since 1983, Silvio Micali is also working as a computer scientist at MIT Computer Science and Artificial Intelligence Laboratory. His doctoral students include Shai Halevi, Mihir Bellare, Rafail Ostrovsky, Bonnie Berger, Rafael Pass, Chris Peikert, and Phillip Rogaway – each renowned in their respective fields.
Project Partners and Collaborators
For any business, partnerships and collaborations are the most important aspect since they drive growth and innovation.
Cardano has formed 17 partnerships so far that either enhance its capabilities or grow its business.
- Metaps Plus: To integrate the ADA coins into the MeTaps Plus, South Korea’s one of the largest mobile payment platforms.
- IBM Research: For a software distribution project commissioned by the European Union.
- PriceWaterhouseCoopers (PwC): To develop a new commercial strategy, probably to bring enterprise users to Cardano.
- New Balance: All customers can authenticate the footwear purchases on the Cardano blockchain.
- SIRIN LABS: To integrate the Cardano blockchain in their blockchain smartphone FINNEY and its SIRIN OS.
- Konfidio: To drive the adoption of the blockchain business model platform among corporations and governments.
- Algoz: To offer liquidity solutions and trading solutions for its native ADA token.
- Priviledge: To study and publish decentralized software updates Priviledge is a consortium of renowned companies and scientific universities with the European Union.
- South Korea Government-Approved Trade Associations: Signed two MoUs with Korea Mobile Game Association (KMGA) and Korea Blockchain Contents Association (KBCCA) to implement Cardano for Korean mobile gaming and digital content.
- Ethiopian Government: To develop a new digital payment system and combine it with identity cards using its Atala blockchain framework.
- Georgian Government: Signed MoU to implement Cardano blockchain-enabled projects across education, business, and government services.
Cardano’s other major partnership includes Z/Yen Group’s Distributed Futures practice, COTI Network, and Ellipal Hardware.
Algorand’s innovativeness and potential to be the blockchain leader has helped it bag a plethora of valuable partnerships across the world. Here are a few partnerships out of the 17 –
- International Blockchain Monetary Reserve (IBMR): To launch the Southeast Asia Microfinance Platform and create a stablecoin called Asia Reserve Currency Coin (ARCC) to encourage financial inclusion in Southeast Asia.
- SFB Technologies: To build the infrastructure to create a CBDC (central bank digital currency) dubbed ‘SOV’ for the Marshall Islands.
- Meld: To tokenize gold and track it over the supply chain using stablecoin for the Australian gold industry.
- Caratan: To build financial tools and products to promote Fintech adoption at an institutional level.
- Italian Society of Authors and Publishers (SIAE): To develop copyright management tools and services.
- DUST Identity: To authenticate physical objects and validate transactions over the blockchain.
- AssetBlock: A real estate startup launched its tokenized property investment platform on Algorand
- PlanetWatch: Focused on environmental monitoring, the first “CERN Spin-off ” labeled organization is building the world’s first immutable air quality ledger on the Algorand blockchain using IoT technologies.
Other major partnerships include World Chess – the commercial arm of the World Chess Federation, Big Data company Syncsort, and Tether.
Both Cardano and Algorand use PoS or Proof of Stake consensus mechanism at their heart, but that’s where the similarity ends. Each of them has its own spin to it.
In the PoS mechanism, a person can validate a block depending on how many stakes or coins he holds. The stake quantity determines the amount of mining power one has. So how does each of them differ?
Cardano’s version is called Ouroboros PoS.
- Cardano allows stakeholders to pool their resources together in a single ‘stake pool’, thus delegating their stakes to the pool. This is because every elected stakeholder may not have the expertise to create blocks.
- The physical timeline is divided into small blocks called ‘epochs’ that are made up of fixed slots. These epochs are cyclic.
- Each such epoch consists of a set of pooled stakeholders.
- While the endorsers are elected depending on the weight of the number of stakes held by them, a slot leader (for every epoch) is randomly chosen by a digital coin toss among stakeholders. When the endorsers approve the blocks produced by slot leaders, it gets added to the blockchain.
- The slot leader also selects the slot leader for the next epoch through the ‘coin toss’.
- Note that having a higher stake increases the probability of getting elected.
- Currently, the list of validators is fixed and the succession is known beforehand.
With the launch of the Shelley mainnet, Cardano plans to remove the above issue. But this will be a hard fork. Here, the community will decide on block validators through staking.
The version Algorand uses is called PPoS (Pure Proof of Stake) consensus mechanism.
- PPoS randomly selects a token holder as a block producer.
- The proposed block gets approved by a committee of 1000 randomly selected token owners and then added to the blockchain.
- The algorithm runs a cryptographically verifiable lucky draw over all the accounts to randomly select committee members as well as the block proposer.
- This means the identities of the participants are unknown until the blocks are added to the chain.
- This selection does not depend on the stake size of the nodes at all.
- PPoS runs this lottery process in complete isolation with other nodes in the network.
The completely randomized election and secret identities of the committee members drastically reduce the chances of any foul playing within the network. As the number of users grows, the network gets stronger and more secure.
Algorand’s PPoS has embraced a more egalitarian ecosystem to negate the wealth gap present in traditional PoS.
Currently, Cardano offers 50-250 TPS. But with incorporating sharding technology in its Ouroboros Hydra version, the scalability can increase to one million TPS theoretically. The processing speed will increase as more users or nodes join the network.
In Algorand, every lottery takes just a microsecond to run. Since such lotteries run independently of each other, multiple lotteries can run simultaneously. This inherently makes PPoS highly scalable. The mainnet itself has the capability to handle 1000 TPS.
Both Cardano and Algorand have sound tech and teams that believe in extensive research and meticulously designed products. Having an early start, there’s no denying that Cardano has established itself in a superior position thanks to the technological achievement, consistency, and transparency it has showcased.
But with Algorand’s ecosystem growing fast, the competition has intensified. Algorand’s aim to bring full transparency, technological innovation, and successful partnerships just within a year have made it a prime challenger to Cardano.
While referring to Algorand, Cardano chief Hoskinson voiced similar opinion – “… they are another one of the science coins and we all kind of support each other. Even though we get academically competitive, we’re able to reference each other’s work and learn from each other and grow from each other.”