Cardano transaction speed

I love Cardano and always will be, but it is a fact Solana’s transaction throughput is very quick compared to a Cardano transaction. They also seem to advertise building projects very well and clearly on their website. Lately I witnessed a transaction on both networks and the difference is significant. From a few seconds for Solana to a few minutes for Cardano.

I try to understand why this is. In terms of decentralization influence, Safety, etc…
Can someone give some more insights…

Regards,

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Check out the size of Solana’s blockchain and compare the requirements to run a validator / block producer. Then also realise that around 80% of that transaction history, stored forever, are consensus transactions between validators. And, because Solana has been optimised to game the metrics they are deliberately incentivising heaps of bot to bot transactions, which largely mean nothing and are also stored forever.

Then consider: If you were designing a financial operating system that needed to remain decentralised for the long term, how would you want the design to look?

As for transaction speed and finality, I think we need to be very careful about what we wish for. I listened to a podcast involving the Ethereum MEV expert, “Hasu” where he said the following:

"Systems that have very low latency in some cases can provide a better experience for users in terms of faster confirmations and market makers can update their bits faster so they can reflect the real cost of liquidity. However, low latency has this really pernicious downside in that it leads to a lot of geographical centralisation. In a low latency system you are always incentivised to co-locate.

However in the system that is trying to be decentralised and robust to any particular regime or regulation then that is almost a death blow.

My view has not changed. I don’t think you can build a system that is both decentralised and very low latency."

That was a very perceptive comment coming from someone so knowledgeable about building systems to exploit MEV.

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Thanks for explaining!

People around me seem to love hyped coins and “unique” ecosystems, even if copied from others. They buy without understanding fundamentals, which worries me.

Lots and lots of people seem to forget about the true core fundamentals of crypto.
Which Cardano is focusing on. But, money makes blind I guess :frowning:

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I agree. Most people view crypto tokens like shares on the stock market.

I think it is better to view blockchains like digital economies, or independent nation states. More like an emerging market where you might want some of your wealth invested because you think that economy will grow, or where you want to build something yourself because you see a business opportunity. The best emerging markets are those with safety and security, where people don’t just arbitrarily take your stuff. IE: A strong rule of law, stable and fair governance, etc.

Capital is flowing in and out of these new digital economies, but they don’t have reserve banks trying to stabilise the currency against these capital flows. Instead they usually have a fixed monetary supply (like Cardano has) which causes the token price to fluctuate wildly with the capital flows (increasing the need for stable coins). These digital economies are not valued based on their income and expenses like a normal company, but rather the capital flows.

Another thing I find interesting is that asset prices depend upon available liquidity. But, these digital economies are creating their own liquidity. If you think about Cardano during the last bull market, it didn’t have significant lending and borrowing ability because the primitives were still being built. Cardano still doesn’t have these primitives well developed because it lacks a good decentralised stable coin. Once Cardano gets a proper decentralised (algorithmic) stable coin then liquidity will increase markedly and magnify token price changes.

This raises a fear that I have about stable coins like the soon coming Mehen (USDM). Mehen is to be fiat backed with KYC only at the on-ramps and off-ramps. People can then trade these stable coins as native tokens on Cardano without any KYC. This enables businesses to take stable coin payments without any connection to the TradFi banking system and no way for authorities to sanction specific accounts except at the on-ramps and off-ramps. People would then only need to off-ramp to fiat if they needed to pay a business that is still in the old world which won’t accept stable coin payments, or to pay their government taxes. That would seem to create the right conditions for massive capital flows from TradFi to crypto as every business eventually accepts stable coin payments. We can then pay for everything, even our food, with stable coins. That all sounds great to me, but it will destroy the TradFi banking system.

I worry that governments are going to resort to capital controls. They may, for example, mandate that all property transactions must occur in fiat, that registered companies must trade their stock in fiat, that electricity and water providers charge in fiat, that medical services are charged in fiat, etc. The Govt already regulates all such businesses. Who knows???

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Each blockchain platform has a different design and development orientation. Don’t be fooled by numbers and marketing art.
A typical example:
In the case of normal users, To transfer ERC-20 tokens to 10 different addresses. You will need 11 transactions, 1 smart contract call transaction and 10 asset deposit transactions. But with Cardano you only need 1 transaction with a fixed fee of ~0.18ADA. And if you want to add a message along with the transaction, you will have to pay extra fees with EVm-chain, while Cardano does not.
I do not deny the fact that Solana’s transaction speed is very fast and the transaction volume is large. However, the characteristic of the EVM blockchain is that a failed transaction is also counted as a transaction and this is quite common with the gas fee issue.
Above all, ask yourself, what makes you trust and invest in Cardano. Btw, have a nice week :slight_smile:

Thanks for the explanation. Indeed Cardano’s eUTXO is very efficient.

I understand that ETH is using the accounting model. Is this also the case for Solana?
I try to get a better insight in how these systems work but it’s not always clear to me.

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Solana uses an account model and has a “novel” consensus mechanism called “proof of history”.

Here is what I find interesting:

<*Begin Sarcasm>
Despite hundreds of researchers, years of research, and hundreds of papers, IOHK could only come up with this eUTxO model, based off Bitcoin.

However Anatoly Yakovenko had an epiphany, while he was sleeping one night, and invented “proof-of-history”. Then he proceeded to code out the solana design with some colleagues. That brilliant insight led to the blockchain that Solana is today, now with a market cap over double Cardano’s.
<*\End Sarcasm>

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Yes, Solana uses an Accounting ledger like ETH. The consensus mechanism they use in the entire system is POS but there is a consensus mechanism nested inside, POH as @Terminada mentioned above. POH will help Solana speed up transactions because it will only be performed by a few nodes with very large computing power. And when the number of transactions is too large, their system will be paralyzed for a long time because there are too few validator nodes.
One thing worth noting is that Solana still claims that they are currently only in Beta version. And sometimes it is a reason for them to justify network shutdowns.

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