Steem Vs. Cardano: A Comparative Guide

Following the "Great Price Correction of 2018," most altcoins have found a way to gain market position or at least stabilize their prices. Two exceptions, however, are Steem, which has not had true market dominance since mid-2016 and whose coin price spike is likely a reflection on bitcoin's market position, and Cardano. The Ethereum-alternative has not been able to self-correct, with some feeling a steeper drop is yet to come.

This is despite the fact that analysts projected Cardano to do well. Like Steem, expectations about the potential of the coin were lost in the implementation of the technology. The future of both coins is likely to depend on how fast the coins can recognize flaws and adapt accordingly.

Tales of the Tape

Comparing Two Coins

Cardano and Steem may seem like comparing apples and oranges at first look. Cardano is a multi-billion dollar altcoin, while Steem has yet to break the billion dollar market capitalization point (as of the end of 2017). While Cardano's ADA traded nearly a billion dollars in one day in 2017, the best Steem did is slightly more than two times ADA's worst.

A look at Cardano's coin prices, however, show price stagnation, while Steem shows growth. ADA has yet to recover in price against BTC since its one-time spike in 2016. Steem, on the other hand, has shown more market liquidity, although it is currently in a bear market.

The Politics of Coin Pricing

The reason for this price movement is simple. As tends to be the case in altcoins, expectations can sometimes overshadow realities. Cardano, for example, was sold as a marked improvement on Ethereum. Its use of protocol layers, separating computational operations and transaction reporting, ease in embracing code changes or forks, and protection of transaction metadata not only presents a viable workaround of the Ethereum bottleneck problem but presents a smart contract system that is secure and almost instantaneous in regard to transaction processing speeds.

The problem is that Cardano admittedly was standing on the shoulders of giants when creating the coin. Per Input Output Hong Kong, Cardano's developer, "In the spirit of many open source projects, Cardano did not begin with a comprehensive roadmap or even an authoritative white paper. Rather it embraced a collection of design principles, engineering best practices, and avenues for exploration." This lack of definitive planning - especially in the area of smart contract implementation - shows, causing key problems in the effectiveness of Cardano's Dapps. 

Similarly, Steem offers to decentralize the concept of content curation by allowing for rewards for content creation and forum post curators. This promises to upset how money is paid out on the Internet, radically undercutting the existing revenue structure used by Google and others that reward site owners over view generators. 

In practice, however, this encourages spamming, as small per-page numbers of views over large pools of content pages yield the same number of views as a few well-received pages. The practice encourages "click-baiting" - or producing meaningless or repetitive content that would otherwise draw views or up-votes, which is similar to the spamming that is being seen on Reddit. Additionally, Steemit's use of Steem Dollars - which are pegged to the U.S. dollar - creates doubts of whether it is possible to have an altcoin that is so intimately linked to fiat currency.

Adaptability Key to Coin Success

In order for either coin to exist, each must be able to recognize these problems and adapt accordingly. Cardano has reported changes, for example, to its protocol to promote improved scalability in peer-to-peer transactions and the release of its own block explorer. Similarly, Steemit is growing as an alternative media hosting site in opposition to Google's YouTube and its perceived censorship. 

No one expects these coins to be perfect off the block, but a resistance to change may find them struggling to keep pace in a rapidly changing market.

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