A few thoughts on ADA, ALGO, and ETH2.0

Ada and Algorand are both developing systems which are built-to-be "Ethereum killers" (I hate the phrase as much as you do, but you know what I mean), In order to understand what we mean by this, and why this is of interest, we'll begin by talking about Ethereum, then discussing the two networks that want to take it down.

[Ethereum] ( https://ethereum.org/en/ )

Ether (ETH) is a 2nd generation cryptocurrency which is native to the Ethereum ( https://en.wikipedia.org/wiki/Ethereum ) network. It was proposed in 2013, and went live in 2015. Currently, Ethereum is the most active block-chain and is run on Proof-of-Work (PoW), but it set to run on Proof-of-Stake (PoS) very soon. Importantly, Ethereum supports smart contracts, upon which can be built Decentralized Finance (DeFi), and Decentralized Applications (dApps).

In the near future, Ethereum 2.0 ( https://ethereum.org/en/eth2/ ) will release in its entirety, as a full upgrade to the network. The goal is to produce a system which is more scalable, secure, and sustainable. The development hopes that this upgrade will address the major criticisms of the Ethereum network, that being that a) the transaction per second rate is low, b) fees are exceptionally high, c) the system does have a few methods of viable attack, d) the Ethereum network is environmentally detrimental.

To be fair, many of these issues go back to the crypto trilemma, as first made famous by the developer of ETH himself. That being that you can choose 2, but not 3, out of the following : scalability, security, or decentralization. Some proposed solutions to this problem include PoS systems, sharding, side-chains, increasing the block size, and/or just using multiple block-chains.

[Cardano] ( https://en.wikipedia.org/wiki/Cardano_(cryptocurrency_platform) )

ADA is a 3rd generation coin which supports smart contracts and natively runs on the Cardano network, which was proposed in 2015 and released in 2017. It supports dApps, DeFi, alt-coins which may natively run on the Cardano network, and a huge variety of supported languages. Currently it runs at approximately 50-250 transactions per second, but due to sharding / side chains is expected to be able to handle up to one million transactions per second.

On interesting point is about decentralization : the Cardano foundation expects that crypto-space will one day be regulated and aims to be at the forefront of this process, and plans to remain secluded while staying regulation compliant. Finally, we will see the last stage of development introducing governance and improvement proposals in accordance with voter staking. Finally, the system plans to run fully non-profit, with small transaction fees being transferred to the central network to fund further development. Interestingly, Cardano is significantly more "open" than other developmental networks, and is almost entirely peer-reviewed and available to study yourself. It's also trying to really "do good for the world" by providing safe and secure ID cards with governments, etc…

In the end, they plan to reach equilibrium at around 1,000 stake pools (almost 100x more decentralized than certain prominent blockchains).

[Algorand] ( https://algorand.foundation/ )

ALGO is a 3rd generation coin which supports smart contracts and runs of the Algorand blockchain, a system proposed in 2017 and launched in 2019. It runs on Pure PoS consensus, where a token holder is randomly selected as a block producer. The proposed block is then approved by another 1000 randomly chosen token holders. Identifies of the participants are unknown until the blocks are added to the chain. The lottery process is fully randomized, and each lottery is independent of each other.

Storage of the blockchain runs on a "vault" system which decouples the storage of recent transactions from requires new members to download single piece of information as they join the network, resulting in a network stamping certificate, so that new clients on the network can catch up securely without having to verify every single block. Onboarding costs are therefore reduced by about 99.7% as compared to BTC, or 90% as compared to ETH if they need to download a ledger of approximately 500 million transactions.

The result is a main net which is capable of handling approximately 1000 transactions per second, without the need for a delegate. Importantly, Algorand distributes the ALGO cryptocurrency it introduces into its economy with each new block to everyone who holds a certain amount of the currency in its wallets. Also, because there's no solving of crytpographic puzzles, there are low fees and a low total resource cost. Moreover, because the approval is random, it makes it very secure against attacks. The result is huge decentralization, high security, low cost, low environmental impact, an extremely low fork probability, and fast speed.

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In summary then, it seems like Etherium has some good "first in the space" potential that it can grow upon. It's the second large market cap, has the most developers on it, and more. On the other hand, it's core fundamental tech has huge problems. Fees will almost never be lower than Cardano / Algorand. It'll almost never scale as well as Cardano / Algorand, etc… A 20-30% reduction in fees with ETH 2.0, for instance, is just no where near enough to compete with other coins (including coins like BNB which has boomed lately because this recent bull market has really shown ETH's weaknesses).

It isn't clear which will win – ADA or ALGO. But I'm not sure there's this "mutual existence" potential between the two like there is for ETH & other coins like DOT, for instance. On the other hand, it isn't clear that ETH will survive in 5 years. It's growing, but on shaky foundations which have already proven to affect it's value.

Just my two satoshis. Take it with a doge of salt.