Cardano is a digital coin and Blockchain platform for creating smart contracts, just like Ethereum, but with a focus on optimizing security and scalability through its layered architecture. The platform describes itself as a third-generation cryptocurrency that will create a new smart economy for mass adoption and cross-chain communication.
Cardano ADA coin differs from other tokens because it was engineered based on peer-reviewed academic research. This unique approach has seen Cardano catapult to being in the top 10 coins listed on CoinMarketCap based on market capitalization.
While Cardano is on a mission to improve issues such as poor scalability, the crypto community knows it as the project designed to do what Ethereum does but in a better way. They see Cardano as an “Ethereum Killer.”
This Cardano ADA coin review explores the crypto coin to answer the following questions: “What is the Cardano coin?” and “Is it a good investment?”
What is Cardano ADA Coin?
Cardano ADA token is a cryptocurrency like others such as Bitcoin and Ripple, but was created with the aim of identifying a middle ground that balances the need for regulation and privacy with the principle of Blockchain decentralization. This picture cannot be clear without highlighting the process that resulted in Cardano’s creation.
- Cardano was founded by Charles Hoskinson and Jeremy Woods. Hoskinson had earlier co-founded Ethereum with Vitalik Buterin but parted midway through the creation of it due to differences on how to monetize the platform.
- After breaking from Ethereum, Hoskinson teamed with Woods (an Ethereum developer) and created IOHK (Input Output Hong Kong), a science and engineering company that was contracted to design, build, and maintain Cardano until 2020.
- Hoskinson and Woods also created the Cardano Foundation to protect the protocol and promote the cryptocurrency. The foundation is based in Switzerland.
- Emurgo, a Japanese startup incubator, was also brought in to invite other organizations to become part of Cardano ecosystem.
The performance of Cardano ADA token price has been impressive especially in the first three months of its introduction when it rose by about 5600% to reach $1.15 on January 5, 2018. However, the price took a bearish trend after that, reaching $0.073 on October 25, 2018.
The graph below from CoinMarketCap is a demonstration of Cardano token’s price performance in the market.
How Does Cardano Coin Work?
Cardano Uses An Academic Approach To Address Issues Reported In Earlier Coins
Cardano is a third-generation cryptocurrency designed to solve key issues noted in first-generation cryptos (such as Bitcoin and Litecoin) and second-generation coins (such as Ethereum). These issues include:
The Cardano ADA project aims to solve the above issues using its best features while considering the lessons learned from earlier crypto projects. Cardano is built on two core principles:
- Developing and peer reviewing scientific concepts in conjunction with universities
- Creating the ADA coin and its network with advanced features such as side-chains
Ouroboros Proof-of-Stake Protocol
Cardano uses a new proof-of-stake protocol referred to as Ouroboros selected for its security and advanced cryptography. The protocol works by breaking the network into epochs (micro networks) and generating slot leader who perform the same role as miners in other networks such as Bitcoin. However, they do not require computational resources.
Note that the slot leaders are not required to maintain blocks. This helps to increase the transaction speed because building the blocks is the primary cause of poor scalability in many cryptocurrency networks.
Cardano is working on the RINA (Recursive Inter-Network Architecture) network to help offer privacy, transparency, and scalability guarantees.
RINA allows the team leaders to configure Cardano as the network grows. The development team thinks that RINA will be crucial in addressing overhead issues reported in most networks today.
Cardano’s founders envisioned a situation in which one coin such as BTC could easily flow into other networks such as Ripple and Ethereum without involving the centralized exchanges. The network aims to achieve this through the use of side-chains.
Side-chains at Cardano use a protocol created by Kiayias, Miller, and Zindros (KMZ) that involves proof of proofs of work. The KMZ protocol allows funds to securely move from one blockchain to another. The protocol also allows ledgers with some regulatory compliance to interact with the Cardano Blockchain without sharing the data that needs to remain private.
How to Buy Cardano ADA Coin
Cardano ADA token, like other coins such as Loopring and Ripple, can be bought on the exchanges. The good thing about the Cardano coin is that its committed team and unique design has won the trust of the markets. Therefore, it is listed in exchanges such as Binance, UPbit, Bittrex, Huobi, Kraken, and HitBTC.
The above exchanges are regulated by local administrations and operate as centralized exchanges. This means that users have to deposit the funds they want to use to buy ADA coins. Here is the process you should follow to buy ADA coins:
- Acquire an appropriate Cardano wallet such the Daedalus wallet or the Yoroi wallet
- Select the preferred exchange and visit its website
- Register for an account by providing a name and email address
- Verify the account by adding more info such as proof of address and phone number
- Deposit your funds in the account you created. Buy ADA coins by selecting an appropriate cryptocurrency pair such as ADA/XRP or ADA/USD
- Withdraw the ADA coins to your wallet
The following link demonstrates how to buy ADA coins from Binance:
A Summary of Cardano ADA Token
Cardano debuted as a carefully thought out and scientifically backed next-generation coin with the potential to redefine the future of the Blockchain niche. Here is a summary of its pros and cons:
- The scientific approach to developing Cardano is aimed at making it the coin of the future
- Instead of addressing scalability and interoperability issues later, the Cardano development team conceptualized the solution before commencing operations
- The Cardano founders are tech and Blockchain enthusiasts who have helped shape the industry since the entry of Bitcoin in 2009
- Although still relatively new, Cardano ADA token has performed well in the market rising to top 10 coins based on market capitalization
- The coin is relatively new. It will need several years before all of the features can be proven stable and reliable
- The project will be finalized in 2020. This risks the concept being copied by competitors and used against Cardano coin
If you are planning to join the blockchain industry, it is advisable to look for a coin with a high potential for growth to give you more chances of delivering a good return on investment. Because coins such as Bitcoin and Ethereum are currently faced with serious issues particularly scalability and sustainability, you need to target more advanced tokens.
Cardano ADA coin is in a good position to become the coin of the future. Since it was designed to offer solutions to problems experienced in the industry, the expectation is that its value will grow exponentially.
Do not be left behind. Buy some ADA coins to become part of the network that could help to define the blockchain space.