A unique coin called ADA will be used to handle transactions on the Cardano blockchain platform.
While the Cardano platform can handle any type of transaction, its ultimate objective is to establish an ecosystem that enables smooth interoperability across various blockchains, or the “Internet of Blockchains.”
Let’s compare Cardano (ADA) to the other leading cryptocurrency competitors to see how it performs.
What exactly is Cardano?
The token that drives the Cardano network is called ADA, and Cardano is a blockchain. This resembles ether and the Ethereum blockchain in certain aspects.
Consider Bitcoin to be Crypto 1.0. It is essentially digital gold, however there are scalability problems with the technology. Then there is Ethereum, sometimes known as “Crypto 2.0.”
Cardano, a version 3.0 of Crypto, was introduced in 2017 with the intention of enhancing the capabilities that Ethereum initially lacked.
Cardano was established by Charles Hoskinson, who also co-founded Ethereum. Hoskinson’s disagreement with co-founder Vitalik Buterin in 2014 about whether the Ethereum project could be considered commercial led to a rift with the Ethereum team.
Hoskinson then introduced Cardano, a blockchain designed to be more sustainable, scalable, and interoperable than Bitcoin and Ethereum.
Henrik Gebbing, co-CEO and co-founder of Finoa, a digital asset custodian, described Cardano as “referred to by supporters as a ‘Ethereum killer,'” adding that “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.”
The fact that Bitcoin and other well-known cryptocurrencies’ blockchain networks, which rely on proof-of-work consensus processes, waste a significant amount of energy is one of the main accusations leveled against them. Cardano offers a more resilient and scalable blockchain by using a proof of stake consensus process.
What Is ADA?
The money used by the Cardano platform is called ADA. Ada Lovelace, the first computer programmer and mathematician of the 19th century, is honored by having her name on Cardano’s coin.
ADA tokens are used by users to pay the platform’s transaction fees. In addition, it is distributed to the validators as payment for maintaining the proof of stake system.
How Does Cardano Operate?
A blockchain network needs a method of transaction verification to prevent double spending of tokens. Due to decentralization, no centralized organization, such as a bank, is in charge of carrying out the task.
Bitcoin and Ethereum 1.0 miners use computers to conduct proof-of-work consensus procedures, solve difficult equations, and add new data blocks to the blockchain in return for cryptocurrency This takes a lot of time and consumes a lot of power.
Cardano makes use of staking, a method in which network users deposit predetermined amounts of cryptocurrency in exchange for the opportunity to take part in blockchain operations.
According to Daniel Hill, president of Hill Wealth Strategies, “the [Cardano] procedure is meant to limit energy expenditure during the block creation process to a minimum.”
How to Purchase Cardano?
Not Cardano itself, but its alternative coin, ADA, is what you purchase. You may open an account with one of the top cryptocurrency exchanges in order to purchase ADA. The ADA can then be kept in a cryptocurrency wallet or on the network itself.
Where to Buy Cardano?
You may purchase ADA for the Cardano network from the majority of the leading cryptocurrency exchanges as it is one of the most widely used cryptocurrencies. Among the top companies selling ADA are Binance, Coinbase, Gemini, and Kraken.
How to Use Cardano
As with every cryptocurrency, ADA is usable. You may keep it as an investment, spend it on things, or trade it. Additionally, you may stake ADA to get extra tokens by covering transaction costs on the Cardano network. Pay attention to the wallet you use if you intend to store Cardano for a long time.
The Daedalus wallet [full node] and the Yoroi wallet [light node] are the two authorized Cardano wallets. Both wallets enable users vote in Project Catalyst, a fund that grants ADA to Cardano initiatives, as well as earn new Cardano by staking their holdings, according to Gebbing.
Gebbing said that even if they don’t directly utilize the ADA currency, institutions and developers may still leverage the Cardano network for their initiatives. The Atala Prism initiative, which aims to provide digital IDs to students all throughout Ethiopia and includes verified information about academic performance, is perhaps the most remarkable, he continued.
The Cardano ecosystem also hosts a number of DeFi and non-fungible token (NFT) initiatives. Decentralized exchange Sundaeswap (SUNDAE) and decentralized and trustless lending protocol Meld (MELD), to mention a couple, are examples of such initiatives.
Benefits of Cardano
- Better for the environment. One of the most ecologically friendly blockchain systems is Cardano. Hoskinson asserted in a 2021 interview with Forbes that Cardano is 1.6 million times more energy-efficient than bitcoin.
- Quicker transactions Compared to Bitcoin and Ethereum 1.0, often known as Classic Ethereum, Cardano processes transactions far more quickly. Cardano has a transaction processing speed of over 250 TPS compared to bitcoin’s 4.6 TPS and Ethereum 1.0’s 15–45 TPS range. The Cardano network is incredibly scalable as a result. The Ethereum network has since been upgraded to Ethereum 2.0 in order to solve previous scalability and security concerns.
- Network with peer review. The Cardano team collaborates closely with academics to provide peer-reviewed research that serves as a roadmap for blockchain innovation. The fact that it is an open-source blockchain with peer review enables it to survive and develop independently of its parent company, according to Gebbing.
Drawbacks of Cardano
- Catching up to more seasoned rivals. Cardano is working to improve the blockchain, but Ethereum has the advantage of having been around longer and seen higher developer adoption. In reality, a proof of stake methodology is one of Ethereum 2.0’s updates that may counteract a significant Cardano advantage.
- Could have a hard time standing apart. Being noticed in the increasingly competitive bitcoin industry is difficult. There are many rivals in the same market, and it’s not meme-able, claimed Hill. For instance, Dogecoin demonstrated the potential growth of a cryptocurrency based only on a viral meme, something the more reserved Cardano brand lacks.
Why Cardano?
Thanks to its cutting-edge and green technology, Cardano’s supporters think it may rank among the top cryptocurrencies. Despite having a lot of research and resources behind it, Cardano is still a high-risk investment.
“ADA should be treated like any other cryptocurrency if you’re thinking about it. Don’t expect significant returns immediately at this time, and only invest what you can afford to lose, Hill said.
If you appreciate the concepts underlying Cardano, Gebbing advises starting with minimal deposits.
“It’s advised to gather experience as a user, experiment with a modest amount by transferring between wallets, staking on the network, and utilizing it to engage in governance, before investing in any blockchain’s token,” said Gebbing.
Make research. Cardano can make a good addition to your cryptocurrency portfolio if you agree with its view on blockchain technology.
