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Crypto of the Week: Cardano

  • August 20 2021
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Crypto of the Week: Cardano

By Fergus Halliday
August 20 2021

Cardano is on the rise. Here’s what you need to know about it. 

Cardano crypto

Crypto of the Week: Cardano

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  • August 20 2021
  • Share

Cardano is on the rise. Here’s what you need to know about it. 

Cardano crypto

If the crypto world’s most talked-about rival to ethereum recently caught your attention, you’re not the only one. Over the past year, the value of the ADA token has risen by over 1,500 per cent.

Here’s what you need to know about Cardano (ADA) before you decide whether you should add it to your crypto wallet. 

What is Cardano (ADA)?

Named after Italian polymath Gerolamo Cardano, Cardano is most readily comparable to the cryptocurrency ethereum.

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Like the world’s second most popular crypto asset, Cardano is a decentralised blockchain platform that will eventually support smart contracts.

Unlike ethereum, however, Cardano is based on a proof-of-stake protocol rather than a proof-of-work one. This means that in practice, Cardano is significantly more energy-efficient than ethereum.

Likewise, Cardano is said to be 4 million times more efficient than bitcoin.

In a world where the environmental costs associated with the maintenance of blockchain networks is becoming increasingly controversial, this aspect of Cardano is one of its biggest drawcards for potential investors.

Ethereum might be in the process of shifting to a more environmentally sustainable foundations, but Cardano is already there.

Unlike many other blockchains, Cardano utilises a two-layer structure. One layer is reserved for ADA transactions, while the other will solely handle smart contracts. This is expected to make the network more efficient as it scales in size.

Finally, Cardano is also distinguished from other blockchains through its emphasis on evidence-based and peer-reviewed improvement.

All upgrades to the network go through rigorous academic scrutiny before being implemented, which is intended to ensure the network continues to get more secure, robust and stable over time.

Who made the Cardano (ADA) crypto?

The main figure behind Cardano is Charles Hoskinson, who was also one of the co-creators of ethereum.

Mr Hoskinson is currently the CEO of IOHK, the company that is responsible for the development of the Cardano blockchain.

While IOHK is the lead for the technical side of things, two other entities are in the mix here: the Cardano Foundation and Emurgo.

The Cardano Foundation is the legal custodian of the Cardano brand and tasked with ensuring that the blockchain is promoted as “a secure, transparent and accountable solution for positive global change”.

Meanwhile, Emurgo acts as something of a go-between for Cardano and the broader crypto development community. They’ve been the driver for a number of partnerships and projects built on the Cardano protocol in recent years. 

What is the ADA used for?

Cardano’s native token takes its name from Ada Lovelace. Right now, the token only acts as a store of value on the Cardano network. However, the team behind the project have a lot of ambition for it in the future.

As with other proof-of-stake crypto projects, ADA tokens can be staked in return for rewards.

The more ADA staked, the greater the potential return if your staking pool is selected to place the next ‘block’ in the sequence. It’s essentially a combination between a savings account at a traditional bank and the lottery.

When ADA’s smart contract functionality arrives, the token will be required to execute smart contracts in much the same way as ETH does on the Ethereum network. This it expected to drive the value and price of ADA upwards over time.

Eventually, ADA holders will also be able to use their tokens for network governance purposes. 

The more ADA you have, the more of a vote you’ll be able to have in deciding whether to reject or approve proposed changes or upgrades for the network. 

How much is the Cardano (ADA) token worth?

As of 19 August 2021, ADA is priced at US$2.12 per unit.

Tallied up at that price, ADA has a market cap of approximately US$68 billion.

For comparison, bitcoin (BTC) currently has a market cap of US$750 billion, while ether (ETH) sits in second place at US$260 billion. 

Where can you buy the Cardano (ADA) crypto?

In line with its growing popularity, Cardano (ADA) is available from most major and mainstream spot exchanges. This list currently includes:

  • Coinbase
  • Binance
  • KuCoin
  • Huobi Global
  • Kraken
  • Gate.io
  • Bitfinex
  • Bittrex
Crypto of the Week: Cardano
Cardano crypto
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About the author

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Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

About the author

author image
Fergus Halliday

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

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