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Is Cardano More Decentralized Than Ethereum? (Explained)

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Cardano and Ethereum are among the most prominent cryptocurrencies. Since they’re direct competitors, users may find it necessary to compare their features and functionality.

Which of the two is more decentralized? What does decentralization of a blockchain network mean, and how do the two leading altcoins compare.

Read on to find out the answers to these questions and more.

Is Cardano more decentralized than Ethereum?

Not quite! Cardano falls short when it comes to decentralization.

Let’s see why.

Ethereum’s co-creator Vitalik Buterin has an apt definition for decentralization. According to him, decentralization could be split into three concepts:

  • Architectural: The block product aspect of the blockchain.
  • Political (governance): The policies that lead to the adoption of proposals, network updates, and how various parties interact.
  • Logical: If you split the network into two separate parts, would both continue existing as independent units?

The architectural aspect of block production is where Cardano shines compared to Ethereum.

In March 2021, IOHK, the company behind the creation of Cardano, announced that the project had achieved 100% decentralized block production, meaning that IOHK had ceded all control of the process to the staking pool operators.

Also read: Does Cardano Have A Working Product?

Not just that, but staking is inherently a better consensus mechanism regarding decentralization than mining as it has a low entry barrier and is more energy-efficient.

Therefore, architecturally, Cardano could be more decentralized than Ethereum, but that could also last a very short time as Ethereum is undergoing a significant transition from mining to staking.

In terms of governance, arguably Cardano’s creator, IOHK, still maintains a significant influence over the project as opposed to Ethereum, whose governance is more distributed to all players in the system.

According to Buterin, all blockchains are inherently logically decentralized by design; therefore no comparison between Cardano and Ethereum in that respect.

Also read: Is Cardano EVM-compatible?

Is Cardano the most decentralized?

Cardano does come up short in some aspects of decentralization, mainly due to the outsized influence from IOHK, the Hong Kong-based software developer led by Ethereum co-creator Charles Hoskinson.

IOHK was responsible for the operation of several staking pools until March 2021, when it fully ceded the block production process.

However, it still maintains the development and maintenance of the Cardano software, the treasury, and the foundation. Therefore, Cardano is not 100 decentralized.

Also read: Is Cardano quantum-resistant?

What does a decentralized coin mean?

According to Wikipedia, decentralization is a “process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.”

In other words, decentralization is a process by which the decisions that affect the development, operation, and maintenance of a cryptocurrency are determined by multiple entities as opposed to a single entity or group.

How does Cardano differ from Ethereum?

Cardano differs from Ethereum in the following aspects:

  • Consensus mechanism: Cardano uses the Proof of Stake (PoS) mechanism while Ethereum uses the Proof of Work (PoW) mining mechanism.
  • Research: Cardano’s blockchain is based on peer-reviewed research, while Ethereum’s network is community researched, built, and maintained.
  • Smart contracts: Cardano aims to be a smart contract platform like Ethereum but so far, it can only be used to transfer value on its settlement layer. Smart contract capabilities are scheduled in the future.

Also read: Is Cardano a stablecoin?

Can Cardano replace Ethereum?

Most certainly, anything is possible in the blockchain. However, Ethereum has been in existence longer than Cardano, and the first-to-market approach has benefited it immensely.

Given that Cardano is yet to launch its main feature – smart contract functionality – that gives Ethereum an edge, and each day that passes, Cardano keeps pulling behind as newer projects opt to launch on Ethereum.

The possibility for Cardano to replace Ethereum still exists even if it takes a long time to start competing at equal footing, but the chances of that happening are increasingly slimmer.

Which crypto is most decentralized?

Keeping with Buterin’s definition of decentralization, Bitcoin is one of the most decentralized blockchain networks.

Architecturally, Bitcoin’s block production is executed by geographically well-distributed miners who are responsible for its governance.

Development and maintenance of the Bitcoin code is also open-sourced on public platforms such as GitHub, with a majority of the development being financed by disparate entities, including private companies, non-profit organizations, and wealthy Bitcoiners.

Which crypto are Ethereum killers?

Ethereum has seen fierce competition for its mantle as the leading altcoin and the largest smart contract platform. Some of its main competitors are:

  • Cardano
  • EOS
  • Tron
  • Solana
  • Binance Smart Chain (BSC)
  • Tezos
  • Polkadot

Some of these have even been given the monikers of Ethereum killers by the press, but none have been able to displace it so far either by market capitalization or by attracting more users or developers.

Ethereum still maintains the lead and is regularly undergoing improvements to offer better functionality and increase security.

Learn more: Does Cosmos Have Smart Contracts?

Final thoughts

Cardano and Ethereum are two leading permissionless blockchain networks with several similarities. Hopefully, in this guide, you have picked up a few of these similarities and how the two projects differ, especially as regards decentralization.