Cardano cryptocurrency — Introduction
The crypto world evolves constantly. Every day we find new cryptocurrencies being released in the market, many of them with very specific features and technological improvements that reflects distinct values and goals promoted by the coin. In fact, the creation of novel cryptocoins is almost always accompanied by new advances and technologies.
All this occurs because protocols and safety measures get improved with time. Thus, new opportunities are created for the development of new cryptocoins that employ new technological tools.
In the same way that the value of a stock is a consequence of the success, beliefs, and ideology of a given company, the same applies to cryptocurrencies. Every crypto is created from a set of values that reflect the set of beliefs of that community of investors.
This happened with Bitcoin and also with the altcoins (the other cryptocoins). Among the altcoins that has gained recent attention, there is a special one, named Cardano, which intends to be an update on the blockchain technology, the technological base for cryptocoins like Bitcoin and Ethereum.
Cardano appeared with an innovative proposal for the crypto market and has the purpose of achieving many innovations for the sector.
In this post, we shall talk about the main features of Cardano. You will understand how this cryptocurrency works, what is your main technology, how to buy it, what kind of investor should invest in Cardano, among other elements.
What is Cardano?
To put it simply, Cardano is a blockchain platform started in 2015 by the American entrepreneur and mathematician Charles Hoskinson, who is also the co-founder of the famous coin Ethereum.
The name Cardano is a tribute to the Italian mathematician Gerolamo Cardano. The cryptocoin associated to the Cardano platform is named ADA, a tribute to the mathematician Ada Lovelace, known for being one of the first women programmers in history.
In order to understand more about Cardano, first we need to talk more about its blockchain architecture. Blockchain is a digital system that allows the control, protection and record of digital information. In general, it is a system that allows one to trace all orders of sending and receiving information blocks through the internet.
The blockchain technology appeared in 2008 together with the release of Bitcoin and its purpose of recording and protecting bitcoin transactions and, later on, other cryptocoins as well.
The biggest advantage of the blockchain technology is that it allows for an autonomous decentralized control, i.e., it does not depend of any kind of inspection or control by another organization in order to operate.
Thus, blockchain became the central technological feature for cryptocoins due to characteristics, such as:
- High level of security, for the technology is based on distinct levels of cryptography and, therefore, created a better protection against any kind type of invasion;
- Decentralized control, i.e., blockchain systems do not depend upon any control of their functions;
- Cloud-computing functioning, what guarantees a bigger autonomy to the system. (In order to learn more about the blockchain technology and all its benefits, we recommend this text.)
Cardano is a third-generation platform built on blockchain technology. The first blockchain generation appeared with Bitcoin and promoted the benefits of decentralized platforms capable of recording transactions without the need for a regulatory institution or company.
Afterwards, in the second blockchain generation appeared the Ethereum coin, which implemented new developments for the technology and introduced novel concepts, such as the smart contracts: safety protocols created to enhance the level of security of on-line transactions.
Accordingly, since Cardano is considered a third-generation blockchain, the central goal of the platform, together with its cryptocoin ADA, is to introduce new developments for the sector, as well as being capable of reproducing the success and all main functions of its predecessors.
One of the central features of Cardano is that it is the crypto platform to employ the scientific method as a guide for its development. All documents and reports produced by Cardano are made available in their website and, afterwards, evaluated by a team of experts from the field before any decision is made.
This means that all changes and implementations in the Cardano platform are made through a peer-review method, exactly like it happens with academic and scientific publications. This features makes Cardano particularly special due to the following:
Whenever a new cryptocoin is released, its developers also write a statement referred to as the White Paper. The White Paper is a document that makes clear to the public which are the core values and goals of that coin, as well as the special features of its technology.
Thus, the Cardano project stands out because it frequently makes available documents, reports, and only implements decisions or changes after the feedback and deliberation of experts. All this makes the advances of the platform much more stable and secure. Not only that, it also creates an environment that fosters diversity of thought and contrast of opinions.
As described in the mission statement of the Cardano project, the platform has the following goals:
- To develop a dynamic research network counting with the help of researchers from the academic world and from outside of it;
- To integrate other cryptocurrencies (altcoins) to the platform and allow multiple-coins transactions in the same device;
- To strengthen the relationship between the crypto market and other financial institutions;
- To foster the development of an autonomous, collaborative, democratic and decentralized financial system;
- To study most cryptocoins available in the market and investigate ways of implementing their benefits and all their positive features;
- To invest into alternative of ways of interacting with governmental institutions, but without threatening the all the liberty principles that are fundamental to the crypto market.
All features above represent important advances to the crypto market and explain the success of Cardano and its coin ADA. However, before we talk more about the benefits of Cardano, let us first understand a bit more of how this platform works.
How does Cardano(ADA) works?
As we said previously, the Cardano platform has the purpose of solving many technological limitations of the first and second blockchain generation. For this, the Cardano project identified three important dimensions to be improved in the blockchain space. They are the following:
- Scalability: In order to enhance scalability for blockchain-based coins it is necessary to increase the number of allowed transactions per second (called TPS). Currently, cryptocoins like Ethereum have a maximum limit of around 15 transactions per second. This ends up limiting the volume of transactions of the coin. As a consequence, any increase in the volume of transactions of Ethereum is directly dependent on a technology that allows a higher TPS number;
- Interoperability: This is related to the integration of multiple coins to the same data base. Currently, there are over 1.500 different cryptocurrencies and tokens available in the crypto market. Thus, a core principle of the Cardano project is the belief that the next blockchain generation ought to integrate transactions of multiple cryptocurrency;
- Sustainability: Another core principle of the Cardano project defends that any kind of longevity to blockchain depends on the possibility of autonomous organization together with a democratic decision-making process that allows the active participation of the whole community of investors.
Based on each dimension, the main goals of the Cardano project are:
1) the production of a technology that allows for a high volume of transactions and
2) a higher TPS number. Aside from that, the Cardano system is based on building a network genuinely decentralized, of low cost, and other advanced safety protocols, such as the Proof of Stake (PoS) protocol.
Another important point to the Cardano project is the development of novel safety protocols that allows the transaction and integration of multiple cryptocoins through its multiple-wallet, named Daedalus. The goal of the Daedalus’s wallet is to integrate a portfolio of over 1.000 coins. (To learn more about all the advantages of a multiple-cryptocurrency wallet, we recommend this text.)
The natural questions, then, are these ones: how all that will affect the crypto market? What are the advantages of the ADA coin in comparison to other altcoins?
What are the differences and similarities between Cardano (ADA) and other cryptocoins
Recently, the ADA coin has gained attention among all altcoins of the crypto market. This interest has been driven by the promise of development released by the Cardano project.
The first important point related to the Cardano platform is the high level of safety through a structure with multiple layers of security. Not only for safety reasons, but mostly for the high scalability power allowed by the TPS number of the Cardano platform, many investors became interested for the possibility of growth of ADA.
In comparison to other famous coins of the market, like Bitcoin and Ethereum, the Cardano platform already offers the possibility of an even bigger volume of transactions. There are still other benefits provided by the platform, such as:
- Fast and cheap transactions;
- High number of transactions per second;
- Advanced safety protocols;
- Novel changes and implementations evaluated by a team of experts, what guarantees a higher stability to the value of the coin.
A higher TPS number also represents the possibility of a higher market value of the coin. And this is precisely the reason that has brought so much attention of the investors. But, what kind of investor should invest in Cardano? Should I invest in Cardano? Although the answer is very common, it is also very simple: it depends.
What kind of investor should invest in Cardano?
There are no specific rules able to determine which type of coin is the most suitable for a given investor. However, an important point to highlight is that every investment portfolio, even of cryptocoins, is based on the knowledge that the investor has about that market.
As a consequence, whereas there are investors who prefer to invest in companies of the public sector, there are also those who prefer to invest in companies of the educational sector, health, or even entertainment.
This occurs because it is easier for that investor to understand and follow all trends and events of the companies from that sector. The same applies to cryptocurrencies. There are coins from different sectors with different mission and values.
Therefore, the choice of cryptocoin must be based on whether the values and the mission of that coin both fit your goals and your investment profile. Cardano and ADA are indicated for investors who like to follow coins that bring novel developments to the market.
Furthermore, if you are the kind of aggressive investor which frequently looks to obtain the maximum of profit in a short period of time, then ADA does not seem the most adequate coin for you. (If you want to understand more about the distinct investment profiles and how to apply them to crypto, you may check this content.)
Other applications of Cardano technology
All the novelties brought by the Cardano project and the third generation of blockchain also find applications into other areas, such as:
- Education: The type of decentralized control created by the Cardano technology may find applications into the educational setor in areas like control and production of certificates, data protection and the decentralization of knowledge produced by educational institutions;
- Finance and investment: The Cardano technology may also find many applications into investment and finance through the implementation of a decentralized control for many safety protocols and procedures of the banking industry and other financial institutions. The creators of the project also believe that Cardano technology may still find applications in other areas of industry.
How to buy Cardano (ADA)?
The process for buying ADA is very much like the process of buying any other cryptocoin:
First, create your account in an exchange (financial institutions responsible for mediating orders of buying and selling crypto). In this text you may find many hints on how to choose good exchanges to start in the crypto market.
Next, after including your resources into your account, execute the buying order and wait until the process is finished.
An important point to be considered: some exchanges allow only transactions of Bitcoin for Cardano (ADA). So, you must be aware of what kind of crypto or what kind of resource is demanded by the exchange in order to negotiate for Cardano (ADA).
After you give the buying order, transfer the coin to your personal wallet. Recall that Cardano’s wallet is called Daedalus. (If you have no previous experience with investing in crypto and would like to learn more about how to start investing, check this post)
Cardano cryptocurrency — Conclusion
The Cardano platform and its associated coin ADA gained good attention in the crypto market. Many investors believe in the possibility of the coin achieving a good spot among the best coins of the market. If you are an investor with interest in companies and disruptive coins, to invest in Cardano may be a good option for you.
We selected all highlights of the text so you can recall everything that has been said:
- Cardano is a blockchain project of third-generation that seeks to implement novelties to the systems of the first and second generations, like Bitcoin and Ethereum,
- The cryptocurrency associated to the Cardano system is called ADA,
- Among the best features of the Cardano system are: high level of security, decentralized control, advances and implementations carried through a scientific methodology, development of a research network, as well as the integration, the study and the unification of the technology related to the diversity of cryptocoins of the market,
- The Cardano project seeks to improve three dimensions of its predecessors: 1) the scalability, 2) the interoperability, and 3) the sustainability.
- In order to improve each dimension, the Cardano project is focused on developing a technology capable of allowing a higher number of transactions per second, as well as developing platforms that allow to control transactions of multiple coins.
- Cardano technology may find applications in other sectors such as investment, education, and industry.
Remember that the choice of any investment must be always accompanied by enough study and caution. Only in this way one can reduce the risks that are inherent to any form of investment.
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