6 Things to Know Before You Buy Cardano
Ever since Bitcoin became a global phenomenon, investors have been on the lookout for the next big thing in cryptocurrency. For some, that search has led them to Cardano (ADA), which is currently the world's fifth-largest cryptocurrency by market capitalization. It was launched in September 2017 by Input Output Hong Kong (IOHK) and led by Ethereum co-founder Charles Hoskinson.
Cardano is a decentralized public blockchain and cryptocurrency project. It is very similar to Ethereum but claims to be more scalable, secure, and sustainable than Ethereum. Cardano also has its own native currency, called ADA which can be used to send and receive funds, as well as to stake in the Cardano network.
If you’re planning to buy Cardano, first, you need to be well-informed. That’s why, in this article, we are outlining 6 things you should know about Cardano.
Cardano Is a Third-generation Cryptocurrency
Cardano is often referred to as a third-generation cryptocurrency, after Bitcoin and Ethereum. While both Bitcoin and Ethereum are decentralized protocols that allow for the transfer of digital assets, they each have their own limitations. For example, Bitcoin is limited by its scalability, while Ethereum is limited by its scalability and sustainability. Cardano claims to address these limitations by being more scalable, secure, and sustainable than Ethereum.
It's important to note that Cardano is still a very new project and has yet to be proven. So far, it has only launched its mainnet (the Cardano network) in September 2017 and its cryptocurrency, ADA, in October 2017.
Cardano Is Energy-efficient
Cardano uses a proof-of-stake consensus algorithm called Ouroboros, which is more energy-efficient than the proof-of-work algorithm used by Bitcoin. This means that Cardano doesn't require miners to use up massive amounts of energy to power the network, which is good for the environment.
The fact that Cardano is more energy-efficient also makes it more sustainable in the long run, as it can continue to operate even if Bitcoin's energy-intensive mining process becomes too expensive to maintain.
Cardano Is Scalable
Cardano is able to handle millions of transactions per second. It achieves this by using a technique called sidechains. Sidechains are separate blockchains that are interconnected with the main Cardano blockchain. This allows for different types of transactions to be processed on different sidechains, which helps to improve the scalability of the network.
Scalability is especially important for cryptocurrency investors, as it is one of the main issues facing Bitcoin and Ethereum. If Cardano can successfully scale its network, it could become the go-to cryptocurrency for large-scale transactions and could even surpass Ethereum in terms of transaction volume.
Cardano Has a Research-based Approach
Cardano is the first blockchain project to be built on scientific philosophy and developed through peer-reviewed research. This means that every decision made about the Cardano protocol is based on extensive academic research.
For example, the Ouroboros consensus algorithm used by Cardano was rigorously tested and peer-reviewed by cryptographers before it was implemented. This makes Cardano one of the most trusted protocols in the cryptocurrency space.
Cardano Is Backed By a Strong Team
Cardano is led by Charles Hoskinson, who is also one of the co-founders of Ethereum. Hoskinson is a highly respected figure in the cryptocurrency community and he has assembled a strong team of researchers, developers, and business experts to work on the Cardano project.
This gives Cardano credibility and ensures that the project is in good hands. It also means that Cardano has access to a wealth of talent and resources that other cryptocurrency projects don't have.
Cardano Is Available in a Limited Supply
A crucial feature of any cryptocurrency is its supply. Cardano has a total supply of 45 billion ADA, meaning there only ever be 45 billion ADA in existence. Out of those, 33 billion are currently in circulation. This is a much larger supply than Bitcoin, which has a total supply of 21 million BTC.
The limited supply of Cardano means that its price could potentially increase over time if the demand for ADA increases. This makes Cardano a good long-term investment for cryptocurrency investors.
Final Thoughts
All in all, Cardano is a strong project with a lot of potential. It addresses many of the limitations of Ethereum and has the potential to become the go-to cryptocurrency for large-scale transactions. Cardano is also backed by a strong team with a proven track record.
However, it's important to remember that Cardano is still a young project and it has yet to be fully tested. There's no guarantee that Cardano will be successful, but it's definitely a project worth keeping an eye on.