Daily analysis in the cryptocurrency sector indicates that most people categorically invest their thoughts and energy on altcoins based on their ranking in the market cap list. Putting that into context, experts say that it is not the right way to determine what to invest in when dealing with cryptos.
This strategy that many take is the reason why the top 10 coins with high market capitalization continue to outshine the rest. Today these high ranking cryptos stand as the most successful projects. But soon this investment strategy may change.
Bitcoin and Ethereum, the first and second generation cryptos, have continued to dominate and enjoy a lot of investment favor based on their circulating supplies. If investors are ready to consider the other lower-ranking coins that have some growth potential, BTC’s dominance will drop significantly. The third and fourth generation coins more specifically Cardano[ADA] and Tezos[XTZ] deserve some attention too.
Most investors come to the cryptocurrency space seeking digital assets that promise high returns and attract minimal risks. The HODLERS have sometimes achieved huge returns on investment over time.
Here, we will look in-depth to unlock the puzzle that exists between Cardano [ADA] and Tezos [XTZ]; which could make the best investment in 2020?
Tezos is described as an open-source decentralized crypto network for asset and decentralized applications (Dapps). But, XTZ finds its way in back in 2017 after same-minded couple co-founders Arthur Breitman and Kathleen Breitman started the development of their next-generation blockchain. Breitman later sought to launch an initiative of initial coin offering (ICO) that raised a total of $232 million US dollars.
The Tezos platform aims to combine a self-correcting protocol and on-chain governance to manage network modifications and also helps Turing smart contracts. More specific Breitman sought to simplify blockchain development and make a unique decentralized ecosystem to cater to the overall needs of the digital financial market. A year later, Tezos launched its beta ecosystem in July 2018.
In September 2018, Tezos’ mainnet went live. Today XTZ is ranked among the top 20 altcoins by market cap. It is currently perched at position 16 with a total market cap of $1.93 billion. At the time of writing XTZ is trading down marginally at $2.61 with total circulating supply hovering at around 743,199,318 XTZ.
The crypto recorded an all-time low back in December 2018 when the price hit $0.314631. Since then, it has recovered remarkably to record an all-time high with an exponential spike to $4.48 on August 13, 2020.
Cardano(ADA) on the other hand stands as a decentralized platform that permits complex programmable transfers in a secure and scalable fashion. This third-generation coin entered the blockchain in September 2017. Cardano (ADA) has been growing in recent months to reach the 6th spot on the list of the biggest crypto at some point. Based on the current momentum in the ADA market, Cardano may reach $1 in the future.
As of July 8, ADA reached a two-year high surpassing $0.138 to record 180% gains within 180 days. Cardano’s partnership with Coinbase Custody is a considerable reason that made ADA surge. While riding on the persistent bullish market sentiment, traders and investors focused on Cardano’s announcement of the partnership. Since then, ADA holders can stake and even store their funds in a secure cold wallet.
The launch on Coinbase is anticipated to happen in Q4 2020 after the staking rewards on Cardano’s Shelley mainnet become entirely available. Notably, this new custody agreement will enable IOHK, the blockchain engineering company that developed Cardano, to provide an institutional-grade storage solution to the Cardano community while also enabling the users to participate in the network.
Charles Hoskinson is the man brains behind Cardano’s development. Nonetheless, sources indicated that Cardano was the first blockchain to evolve out of scientific philosophy and one of kind to be built in the Haskell programming language. Currently, ADA has a total market cap of $2.472 billion squeezing it to position 13. In the past 24 hours (September 14, 2020) ADA recorded a volume of $1.096 billion.
Cardano attained an all-time high in January 2018 after hitting $1.33. Since then, ADA slightly bearish where it hovered around $0.09536 at the time of writing.
Operation and Performance
Tezos was designed to utilize a liquid proof-of-stake consensus mechanism, which made it unique in the market for a variety of valuable reasons. The platform introduces an agonistic native middleware known as Network shell. This particular strategy enables developers to utilize modules in the development of Dapps in smart contracts.
Its generic blockchain protocol is practically sub-divided into three layers:
- Network Protocol – It is also referred to as the gossip protocol that supports and boosts peer listening and broadcasting between nodes.
- Transactional Protocol – this transactional layer defines the accounting model that is implemented by the Tezos blockchain.
- Consensus Protocol – This protocol enables the blockchain network to reach agreements on the state of the executed transactions.
Transaction and Consensus protocols are integrated to be referred to as Blockchain Protocol. The Network Shell helps in the efficient communication between the blockchain protocol and the network protocol. Thus, the shell is agnostic to the transaction protocol and the consensus protocol.
The security of Tezos is also well enhanced. The combined use of imperative and functional languages makes smart contracts robust and secure. Solidity stands as the most ideal for smart contract programming in terms of flexibility. Functional languages are more adept at mathematical purposes.
Their usage of this strategy also enhances transaction speed across the networks. Currently, the XTZ ecosystem can validate 1000 transactions per second compared to dominants crypto like Bitcoin that validate less.
Bitcoin uses a proof-of-work protocol that makes it minable. XTZ rather uses liquid proof-of-stake mechanism protocol (Dpos). XTZ token runs the Tezos protocol. Token generated are thereafter given as incentives to users who participate in the development and validation of transactions in the Tezos protocol.
This process in this case known as baking. The overall process ended up keeping the network decentralized.
Shelley mainnet is a decentralized network of community nodes operating on a proof-of-stake (PoS) consensus protocol. Cardano uses a dynamic proof-of-stake algorithm. ADA uses Ouroboros in its development protocol. This protocol works uniquely compared to other proof-of-stake. Ouroboros divides time slots called epochs. Each epoch is led by one leader which is thereafter assigned a duty to confirm and create a new block in the Cardano blockchain.
This Ouroboros protocol guarantees that less central governance comes from the developers. Generally, the Cardano network is moving from a centralized network to a distributed network system. Just like the users expected Cardano to introduce the Shelley mainnet, ADA’s price has benefited significantly from the announcement and successful testnet even before its launch happened.
The deployment of the Shelley code was confirmed to have been successfully released on the mainnet on June 30. Also, the Shelley hard fork, a remaining move towards full decentralization on the Cardano blockchain happened on July 29. It marked another significant milestone for IOHK.
Even though Metrix started to record Cardano price in late 2017 and early 2018, up to now Cardano is still well within the discovery mode for its fair price. Cardano is considered as new crypto compared to Bitcoin and many others that came before it. Nonetheless, its price prediction does not dwell on the history of the Metrix. Instead, its price prediction will be based on speculation and projections.
Today, Cardano is hovering around at $0.095 after two years of bearable volatility in the market. Certainly, this will not be its price tomorrow or the day after since the crypto market is still quite volatile. Hopefully, investors, analysts, and traders hope that the ADA price will surge again.
But by how high or how much will it go and when will it reach its market price. Experts have different views about ADA’s future performance. LongForecast has opined that the price for Cardano will reach a very modest price of $0.05, but later on in the year to hit $0.09 in the late year 2020.
CoinSwitch as well aired its deep concise forecast. They have provided an extremely strong forecast that the price of Cardano will reach $1 then reach $2 in the future. Nonetheless, other firms like CoinFan and DigitalCoinPrice do not have anywhere near the optimism shown by Coinswitch. CoinFan predicts that the price of Cardano will reach $0.45 in 2025 while DigitalCoinPrice has set the price at $0.20 by 2026.
Tezos’ road map to glory has not been that easy at all. But, it has gone through volatility in the crypto world in recent years. This has not managed to limit XTZ to gain an exponential momentum. However, the price of this crypto is expected to record a further surge soon.
Recently, Binance crypto exchange announced the addition of Tezos in its listings. The addition somewhat will affect the price of XTZ over time as explained by analysts and experts. But, many experts have aired their views about the performance and pricing of this coin in the future.
CryptoGround predicts that investing in Tezos would turn out to be a profitable long-term investment as of 2020. The forecast further noted that the Tezos token will swing low $1.25 and $9.01 to the highest at the end of 2025.
Walletinvestor.com predicts that the price of Tezos will surge up to $34 by 2024. The forecast further noted that if you invest $100 today your current investment may be worth over $1,600 in the next four years.
Which Is A Better Long Term Investment?
After extensive analysis of both projects, it is clear that experts believe that they will surge in the coming years. Thus, both Tezos and Cardano are great long term investments since they seem to be budding and will provide investors with a decent return on investment over the coming years.
Now the question emerges; which between the two suit your best investment portfolio 2020? The answer is not straight forward yet both projects are quite similar and have gained equal adoption. But, it is upon any individual investor to set their preferences based on their investment targets.