Billionaire investor Mark Cuban is no stranger to controversy in the crypto world. He has called metaverse cryptos "stupid." He has used Twitter to praise the merits of Dogecoin (DOGE 11.68%). And now, he has even suggested that Dogecoin is a superior investment to Cardano (ADA -1.33%).

How can Cuban be more bullish on Dogecoin than Cardano? After all, Dogecoin is still just a silly meme coin, created as a joke back in 2013. In contrast, Cardano is a leading blockchain project with very real applications being built on top of it. This seems to be a no-brainer comparison, so it's worth digging a little deeper into Cuban's assertions.

Does market cap really matter in crypto?

For many cryptocurrency investors, market capitalization is a key starting point for understanding the relative value of a particular cryptocurrency. The higher the market cap of a crypto, the more valuable it is. Cardano, with a market cap of $18 billion, would appear to be almost twice as valuable as Dogecoin, which has a market cap of just $9.4 billion. 

Shiba Inu dog.

Image source: Getty Images.

So why does Cuban make the claim that Dogecoin is more valuable than Cardano? As Cuban said in a recent interview, market capitalization is easily manipulated in the crypto world. There are a number of steps that developers can take to prop up the market cap of a cryptocurrency. With the right moves, says Cuban, you can get to a big market capitalization quickly.

Blockchains are businesses

As a "Shark Tank" investor, Mark Cuban views blockchains as businesses. He is looking for tangible proof that a blockchain is actually creating value. This could be in terms of revenue, in terms of new applications that people are using, or in terms of transactions happening on the blockchain.

And when he looks at Cardano, he doesn't see anything happening: "There's got to be a there, there."

Sure, Cardano might be building a world-class blockchain, but there's no real activity happening on it, and Cardano is not generating any revenue, Cuban claims. As a result, he's out on the investment.

But the "Cardano is useless" argument is getting old. Before 2021, Cuban might have had a point. After all, it was not until September 2021 that Cardano finally added smart contract functionality to its blockchain. But in the 12 months since then, Cardano has seen a flowering of nearly 1,000 different projects and decentralized applications being built on top of the blockchain. People are now minting non-fungible tokens (NFTs) on the Cardano blockchain. There are plans for metaverse worlds built on Cardano. And Cardano is even getting involved in the world of decentralized finance.

How do you value the future of any crypto?

When comparing Dogecoin and Cardano, Cuban is also bringing a venture capital mentality to the world of crypto. In the venture capital world, you value a company in terms of its future prospects. That's why a start-up with no customers, no products, and no revenue can be worth $1 billion -- investors are taking into account future prospects. According to Cuban, Dogecoin has greater future value than Cardano, which he thinks has squandered its chances to build anything of future value. As he said in the interview, "DOGE has got more applications potentially available to it than Cardano."

But how realistic is that assertion? Yes, Dogecoin released a "Trailmap" at the end of 2021 for where it's headed, and there are some interesting projects in there. But there are still no firm dates for Dogecoin's transition to a full proof-of-stake blockchain. In contrast, Cardano already has a fully functioning proof-of-stake blockchain and is close to completing a major tech upgrade this summer. So here again, it would appear that Cardano has a stronger base for future growth than Dogecoin.

Maybe it's wrong to underestimate Dogecoin. Maybe Dogecoin really is going to the moon. But right now, it seems to be too speculative of an investment. As even Cuban admits, the price of Dogecoin is heavily tied to "vibes." And right now, I don't have those vibes. In contrast, Cardano may be one of the most under-appreciated cryptos in the marketplace. Yes, it has taken a long time for Cardano to get where it is today, but the future looks very bright indeed.