ADA Cardano: Everything You Need To Know About The Third Largest Cryptocurrency
There’s a huge pool of cryptocurrencies that you can get your hands on right now. Be it Bitcoin, the classic digital avenue to store your money or Ethereum with its smart contract implementation, these coins have had their fair share of attention. Cardano is a relatively new name in the game.
It was launched in September 2017 after 2 years of meticulous development. It aims to solve the problems of interoperability, scalability, and sustainability that exist with first-gen coins.
If you are one of the individuals wondering about Cardano’s recent popularity hike, then you are in the right place.
In this article, we’ll discuss the latest information regarding this hot cryptocurrency and determine whether investing your big bucks in this coin is a risky bet or not.
What Is Ada Cardano?
Similar to Ethereum, Cardano is a smart contract platform that helps in the creation of peer-to-peer transactions. It is a layered platform with high-grade security, and it is also customised to be scalable. Launched in 2015 by Charles Hoskinson, who also co-founded Ethereum, this non-profit organisation rolled out their coin, ADA, in 2017.
Three separate organisations have joined hands to work on Cardano. They include:
- The Cardano Foundation: This company is the main body behind the work, promotion, and protection of the Cardano technology protocol.
- IOHK: This organisation aims to tackle new challenges and focuses on providing better financial inclusion.
- EMURGO: This organisation supports and aids in the development of new software systems, and helps IOHK by taking inputs from startups and developers.
It is available on most of the major crypto exchanges like Coinbase, Kraken, FTX, and Kucoin.
About Smart Contracts
These contracts are self-executing functions that are verified on various nodes and allow its users to put conditions on their digital transactions. The two primary layers that distinguish the ledger of account values include:
- Cardano Settlement Layer (CSL): This brings equilibrium to the ledger and acts as a currency structured using Ouroboros. Its proof-of-stake consensus algorithm contains various scripting languages and user-issued assets.
- Cardano Computation Layer (CCL): This layer contains the preliminary information for every transaction and works without the interpolation of CSL.
The organisation is also looking forward to sanctioning DeFi capabilities in unbanked countries like Ethiopia.
Users can also earn rewards as high as 4.5% every year by staking their tokens in an existing pool. This also promotes decentralization and the creation of new blocks. Furthermore, every 6-8 months, they conduct a systemwide voting that allows holders to decide on fund resources.
Other Important Crypto Terminology
- KMZ Sidechains: These protocols allow funds to be transferred from one blockchain to another. It also adheres to certain regulatory instructions and keeps the information behind CSL-ledger interactions private.
- Daedalus Wallet: This is an open sourced wallet created by Cardano that can transfer the supported set of currencies without any interference. This wallet also lets you interact with the applications built by developers.
Cardano Fees: Much like Bitcoin, users incur a small fee when transferring ADA. This is calculated by the rule : a+b*size of the transaction.
What Is It Used For?
The inclusion of smart contracts will facilitate the working of decentralized applications, also known as DAapps. These apps will be used by participants to implement blockchain-based inputs on their contracts via an abstracted user interface. These DAapps also involve Haskell-based languages like Plutus and Marlowe.
Usage of blockchain in the financial space will allow users to assign any value/condition to the contract, which will automatically be exercised without their constant involvement.
As a result, the transaction speeds are significantly higher as compared to the likes of Bitcoin and Etheruem. During its testing, Cardano could process as much as 257 transactions per second.
Their roadmap is bifurcated into five sections, each of which focuses on a special functionality. This can be summed up as follows:
- Foundation Era/Byron: This will enable the exchange of ADA on federated networks coupled with Ouroboros consensus protocol, which is a product of heavy and extensive academic research.
- Decentralization Era: This will improve the current networking scenario by captivating more nodes under its control. This will help in the creation of a faster network with less uptime and more security.
- Smarts Contracts Era: This stage will allow developers to create DAapps while also embedding a multi-asset blockchain plan. Wider interoperability and token locking are also some features that will be enabled with this update.
- Scaling Era: This stage will improve scalability significantly by introducing sidechain accounting styles that will run parallel to their UTXO model.
- Governance Era: This will mark the beginning of a fully-decentralized and self-sustaining network.
Click here to know more about their long term upgrades.
To sum up, the primary use of Cardano involves allowing transactions in its native currency and powering scalable applications through it.
What Makes It Different From Other Cryptocurrencies?
The two main differences are:
- Ouroboros consensus reviewed by experts
- Multiple-asset ledger
Even though both Ethereum and Cardano revolve around contracts, Cardano differentiates itself by using a peer reviewed update system which it is the first of its kind. This blockchain protocol is based on a scientific and research-driven approach.
The main rival of Cardano is Ethereum. Apart from this, newer projects like EOS, Lisk, and NEM are also in the race as they are involved with smart contracts too. In comparison to these, the practices of Cardano organisation members are validated by peer-reviewed research and secure coding practices.
In terms of trades, Cardano stood between $2.44-2.86 in the latter half of August 2021. As per their listings, only 45 billion ADA can be mined, unlike Ethereum which has an unregulated supply.
Frequently Asked Questions
Is Cardano A Good Investment?
Although experts suggest that this currency will stay buoyant for some time, potential catalysts suggest that this currency is only worth it if you plan on going long-term. Its promising applications in the blockchain space make it a solid and future-proof investment.
Why Is It So Popular?
Its energy efficient process and clear roadmap are two points that have filled the investors with confidence, thus increasing the number of purchases and price. The community is also regularly updated, which puts the pedestal in the hands of the public.
Should I Buy Cardano?
Apart from being energy efficient, constant backing of experts and a wide array of applications in health and agricultural sectors portray this coin as a really lucrative investment venture. The limited supply can also help increase the price. Hence, buying Cardano during a dip and holding onto it for a long period of time isn’t a bad idea.