Cardano and Bitcoin Cash are both popular cryptocurrencies that have become household names among crypto enthusiasts.
The two are however very different. Cardano is a proof-of-Stake cryptocurrency while Bitcoin Cash (BCH) is a proof-of-work (PoW) cryptocurrency. How these cryptocurrencies even came about is another distinguishing factor.
In this guide, we will discuss in detail the differences between these two projects, helping you to effectively distinguish between them. We’ll also help you to make a decision on which one to invest in if this is something you’re interested in.
What Is Cardano (ADA)?
Cardano is a top PoS cryptocurrency project that supports decentralized applications which are deployed via smart contracts. The project also supports all things pertaining to web3, and is one of the leading networks in this area.
You can distinguish Cardano by its thorough and scientific approach to implementing developmental proposals on its network. All proposed upgrades on Cardano must go through scientific scrutiny and be peer-reviewed.
The network is also unique in that it operates a special PoS consensus mechanism known as Ouroboros. This is the mechanism behind Cardano’s speed, scalability, and low transaction fees, unlike what obtains in many other projects.
The entire ecosystem is powered by a token known as ADA. ADA is used to pay for transaction fees involving anything done on the network. It is also the token for staking to secure the network. As a PoS network, it relies on validators who stake their tokens to help keep the network safe while helping to verify transactions.
ADA also serves as a governance token. This is like the license to vote on proposals for the growth of the network. Anyone holding ADA can participate in voting for proposals to help develop the network.
The token is also considered to be an investment asset by many investors. There are 35 billion ADA in circulation currently, and there are up to 45 billion tokens, all pre-mined. However, the Cardano team decides how many are released into circulation per time.
Interestingly, Cardano doesn’t have a burn mechanism for ADA, which means the circulation remains fixed and there are no plans to remove some of the tokens from circulation.
What Is Bitcoin Cash (BCH)?
Bitcoin Cash is a PoW cryptocurrency that came into being through Bitcoin. When Bitcoin became too slow and expensive to use as a payment network, a controversy arose and some of the devs decided to fork the network and Bitcoin Cash was the result.
Bitcoin Cash therefore, is a network that was created for fast payments using crypto. It is of course more scalable than Bitcoin, faster, and cheaper to use, which is what makes it suitable for this function.
As a PoW network, Bitcoin Cash relies on miners who use computers to solve mathematical problems and confirm transactions. In the process, new BCH are released into circulation as a reward for the miners.
Apart from payments, Bitcoin Cash network has been developing capabilities that Bitcoin never had, which could make it relevant in the web3 ecosystem. You can also use the token as an investment asset, just like ADA.
BCH has a circulating supply of 19 million, and a maximum supply of 21 million, just like Bitcoin. This means there can only ever be 21 million BCH coins to be mined, after which the world will have to compete for the limited supply.
Which Is Better?
If you’re interested in the web3 world and are looking for a network you can enter it, Cardano is the network to choose, with its native token, ADA. It supports staking, DeFi, and everything in-between that makes up web3.
However if you’re looking for an investment asset, BCH is the better choice. With the limited supply of 21 million, this seems like a scarce asset that will appreciate in value. This is even more true if the network eventually enters into web3 with new capabilities.
