Cardano is a blockchain platform designed to process transactions using a dedicated cryptocurrency called ADA.
The Cardano platform can handle all kinds of transactions, but the real goal is to become the “Internet of Blockchains,” creating an ecosystem that allows seamless interchangeability between different blockchains.
What Is Cardano?
Cardano is a blockchain and ADA is the coin that powers the Cardano network. This is similar in some ways to ether and the Ethereum blockchain.
Think of Bitcoin as Crypto 1.0. It’s essentially digital gold, but the system is beset with scalability issues. Then there’s Ethereum, often referred to as “Crypto 2.0.”
Cardano, launched in 2017, is Crypto 3.0, with the goal of improving upon the functionality that Ethereum was initially missing.
Charles Hoskinson founded Cardano, and he’s also a co-founder of Ethereum. Hoskinson had a falling out with the Ethereum team due to a dispute with co-founder Vitalik Buterin in 2014 regarding whether the Ethereum project should be commercial or not.
Hoskinson moved on to launch Cardano as a more scalable, interoperable, and sustainable blockchain, intending to improve upon Bitcoin and Ethereum.
“Referred to by supporters as an ‘Ethereum killer’, Cardano’s ongoing development is supported by the Cardano Foundation and the IOHK research institute, which engage in [resources and development] and peer review via a formal development model,” said Henrik Gebbing, co-CEO, and co-founder of Finoa, a digital asset custodian.
One of the major criticisms of Bitcoin and other popular cryptocurrencies is that their blockchain networks, based on proof of work consensus mechanisms, waste huge amounts of energy. Cardano uses a proof of stake consensus mechanism, offering a more sustainable and scalable blockchain.
Who Created Cardano?
In the early days of Ethereum, one of its co-founders, Charles Hoskinson saw the need for a more standardized, and scalable blockchain. With his mathematics background, Hoskinson began thinking about more scientific ways to build a blockchain. During this time, Hoskinson connected with Jeremy Wood, a former co-worker at Ethereum, who was looking to create a better blockchain and smart contracts platform. The two began to pursue Cardano as it exists today.
How Does Cardano Work?
With a blockchain network, there needs to be a way to verify transactions to ensure people don’t spend the same tokens twice. Given the decentralization, there’s no central authority like a bank working to handle the job.
Based on proof of work consensus mechanisms, Bitcoin and Ethereum 1.0 miners run computers to solve complex mathematical equations and add new blocks of data to the blockchain, receiving crypto in exchange for their work. This is time-consuming and uses up large amounts of electricity.
Cardano uses staking, a process where network participants deposit set amounts of crypto to earn the right to participate in the operation of the blockchain.
“The [Cardano] protocol is designed to keep energy expenditure during the block production process to a minimum,” said Daniel Hill, president of Hill Wealth Strategies.
What is ADA Cardano Used For?
Cardano tokens can be used to pay for services on the cryptocurrency’s underlying blockchain network, which is intended to eventually allow people to carry out complex transactions without the costs imposed by traditional providers such as banks or brokers.
Often, however, Cardano is bought or sold with U.S. dollars. Many buyers of Cardano also consider the tokens an investment, hoping they will rise in value as more people use the technology.
Is ADA and Cardano the Same Thing?
ADA is the in-house token of the Cardano blockchain that resides on the Cardano Settlement Layer. The maximum supply of the ADA cryptocurrency is limited to 45 billion tokens, to be released over time through minting. The hard limit on the total token supply guarantees a deflationary attribute to ADA. However, the ecosystem is destined to showcase an inflationary trend until the ecosystem releases a major portion of the reserves for circulation, estimated to initiate from 2030.
Just like any other popular cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), ADA can be exchanged for fiat currencies such as the United States dollar and stored on crypto wallets. In addition to Cardano’s native wallet offerings like Daedalus and Yoroi, third-party wallet services also support ADA storage and transfers.
ADA can also be stored securely in hot and cold wallets. Check out Cointelegraph’s guide on choosing the perfect crypto wallet for Bitcoin based on your unique requirements.
ADA is built to perform as a secure exchange of value that runs on Ouroboros, a group of proof-of-stake blockchain consensus protocols. Moreover, the Cardano blockchain can host other cryptocurrencies, nonfungible tokens, smart contracts, and DApps.
Why is ADA So Cheap?
Crypto experts predict that the price of Cardano will likely rise again at some point in the future. But before you conclude from this historical deduction, there is more to why ADA is considered cheap at its current market price.
Cardano’s price is cheap. For a coin with many projects going for it; the upcoming completion of the Goguen update, DApps, and rumored PayPal listing, the coin should be worth much more.
But then, in crypto, implementation of adoption is never immediate. It takes time before a coin can begin to manifest the effects of its adoption. You can read about a major partnership deal signed by the founders of a project today, and there will be no direct impact on the price of that coin. The price of the coin will build up, and within the space of a week, months, or even years, it could skyrocket. This is the place of predictions and forecasts.
Is Cardano a Good Investment?
Cardano could be a worthwhile investment for patient investors who can handle the volatility.
As a blockchain platform, Cardano has a lot of potentials. It’s eco-friendly and has all kinds of applications, including Defi and NFTs. It has built some great partnerships so far that demonstrate the different uses it offers. You can also stake Cardano to earn ADA tokens, which is an added benefit if you buy it.
Read More: Will Cardano Reach $1,000 – Cardano Price Prediction
Still, the lengthy development process could be problematic, and Cardano has also run into performance issues, including heavy congestion at the start of 2022. Those are things to consider when deciding if you should invest.
While long-term investing is always a smart way to go with digital currencies and cryptocurrency stocks, it’s especially important with Cardano. This project takes a slow-and-steady approach, so you need to give it time to develop.
Even though Cardano operates differently than other cryptocurrencies, it’s still highly volatile. The price can go through significant changes in a short period of time. If you decide to invest, remember that long-term changes are more important than weekly swings.
Read More:
11 Safe Ways to Get Free Cardano (ADA) in 2022
What’s Special About Cardano?
The team behind Cardano has been inspired by the world of science publishing and has adopted its peer-reviewed approach for their cryptocurrency.
What does that mean? Well, all changes and new features introduced are developed, reviewed, and agreed upon by academics before being used, including the network’s consensus algorithm, Ouroboros (of which more later). The code for the network is written in the Haskell programming language, which is used by companies including Bank of America and AT & T. IOHK, the company behind Cardano, has published a number of academic papers describing the platform and its technology.
