- Great development team
- Cardano can host assets without needing smart contracts
- Fully decentralised
- Third-generation blockchain
- Cardano uses separate layers for settlement and computation
- Cardano is still in development
- Several competitors
Despite the scepticism and lack of regulations regarding its usage, awareness about cryptocurrency is growing. With time, large and global financial institutions including some of the MNC banks are warming up to the crypto sector technologies. Even some of the notable celebs and tycoons are investing heavily in this sector. Interestingly, the crypto sector technologies and operating protocols are also evolving with time. Newer generation cryptocurrencies have been designed to address the loopholes found in their predecessors and they are being marketed as more feasible and secure than the existing ones. One such example is Cardano or ADA.
What is Cardano, after all?
Cardano (ADA) is a third-generation cryptocurrency platform and it also serves as a Dapp development platform. This became the centre of attention after being launched with the features to rely on peer-reviewed research strategy. This was an industry-first feature used on public Blockchain. Third generations cryptos like ADA features enhanced technologies like layered architecture and that helps improve sustainability, scalability, security.
Cardano entered the crypto sector back in 2017. It was founded by Charles Hoskinson and Jeremy Wood, both of whom previously worked in the Ethereum project. Cardano was embraced by the crypto sector veterans for its VM design and innovations in language. It managed to raise $63 million courtesy of the ADA ICO.
From its humble beginnings in 2017, Cardano grew from strength to strength. In 2018, it won the support of several high-level partnerships from the FinTech and academic sectors. In 2019, it got listed in Binance, which is the biggest crypto exchange, globally. This helped drive the ADA price higher. The ADA token was named after Ada Lovelace, a 19th-century mathematician who also happened to be the first computer programmer.
How it is distinct from other cryptocurrencies?
Cardano is not like your regular cryptocurrencies. It relies mostly on the academic sector. Its design was based on utilizing evidence-based processes rooted in peer-reviewed research, academic theory and scientific philosophy. The platform was named after Girolamo Cardano, a noted Italian polymath and physician. He became famous for developing systematic computations of probabilities.
Cardano’s developers have some lofty aims. They want to bolster global economic systems by embedding Cardano technologies. They also want to give access to financial services to the unbanked population. Another aim of the Cardano developers is to stabilize the Dapp sector.
How does it work?
Being a third-generation cryptocurrency, it tackles the issues plaguing the adoption of previous generation crypto coins. The issues like sustainability, scalability, interoperability are said to be easier to handle for Cardano users. Here’s how:
- Scalability- When it was launched, Cardano could handle just 10 transactions per second. But now it is capable of handling more than one million transactions each second. This has been made possible owing to integration of a scaling solution named Hydra. This Layer 2 scaling solution is capable of processing transactions off-chain.
- Interoperability- Nowadays, the market is flooded with hundreds of cryptocurrencies and more will come. Cardano seeks to introduce standards so that interoperability across networks is enhanced. These systems comprise of system upgrade protocols and blockchain governance models.
- Security- Enabling blockchain interoperability does introduce some risks. This is where Cardano wants to step in. It has standards for dealing with decentralization, privacy, security.
Cardano has unveiled Ouroboros- a new and unique consensus mechanism. This chain-based PoS protocol relies on leaders chosen randomly for block approval. Like most blockchains, a node that adds the next block gets rewarded for the endeavour.
Cardano relies on a decentralized developer’s team. They work in three independent entities. The Cardano Foundation is one non-profit entity supporting the platform. Explore IOHK is an engineering firm that creates the technologies powering the network. The governance system deployed in Cardano is akin to that of Ethereum. Its network relies on a DAO- decentralized autonomous organization to clear new initiatives.
How you can store ADA?
There are several ways using which you can store ADA coins. You can use a mobile wallet when you are new to this sector. Security is decent and these wallets are simple to set up and free to download. However, serious crypto users with plans to invest and deal in ADA for the long term should opt for a desktop wallet. Trying a hardware wallet is recommended for seasoned crypto users willing to try ADA. The hardware wallets are more secure than other options since they make use of cold storage. The Ledger Nano X and S both support ADA, for example.
Are there any drawbacks of Cardano?
It is hard to pinpoint any cryptocurrency that can be called flawless and the same is true about Cardano! While the Cardano team has set some lofty goals it has a smaller team to fight an uphill task ahead. It faces steep competition from Solana which has a larger development team. Cardano still suffers from a lack of a fully functional smart contract.
Is Cardano a worthy investment?
Cardano’s market cap is now approx. $90 billion and it ranks third, just after Bitcoin and Etherium. The total number of ADA coins is 45 billion.
From the time of its inception, Cardano price has soared in a gradual manner. In mid-2020 it was $0.12 and on February 20, 2021, it touched the $1 threshold. By May 2021, it was $2.3. Very soon, it is expected to cross $3. The industry experts predict, in 5 years, Cardano price may exceed $10 if the momentum is maintained. So, it is a worthy choice for long-term crypto investors.
What the future of Cardano looks like?
From its growing network and massive following, it is safe to say Cardano will remain a top choice in the fast-growing cryptocurrency sector for a long time. ADA is now rated among the top 15 cryptocurrencies. If you analyze the historical price action, ADA seems like a good investment choice. It has received a lot of fanfare and fans even hail it to be the Ethereum-slayer! It does have some advantages over older generation cryptocurrencies including Ethereum and Bitcoin.
The fact that the Cardano team has tied up with some prestigious universities and entities is likely to work in its favour. Its strong development team and proof of stake model give it a competitive edge over its rivals.
The crypto sector is quite volatile and it is hard to predict how things will shape up despite the market predictions and moves. Cardano has many advantages over traditional cryptocurrencies and a few drawbacks are not likely to halt its successful run anytime soon. While it may not be able to dethrone Ethereum, it is quite likely that Cardano will carve its own niche in the sector.