Top things to know before you buy Cardano (ADA)
Defined as a third-generation cryptocurrency, Cardano (ADA) was introduced in 2017 and it has flown under the radar, but it could be poised for making a breakout. The crypto builds on cryptocurrencies like Bitcoin and Ethereum, but aims to be more scalable and sustainable. Therefore, it is faster, more secure and environmentally friendly.
There is no doubt that the cryptocurrency has a lot of potential; you just need to perform a Cardano analysis to find that out. It hasn’t attracted a lot of mainstream attention, but is regarded as one of the altcoins to watch. If you are thinking about investing in Cardano (ADA), there are some things you should know. Read on to find out:
- It is energy efficient
The fact that Cardano is an eco-friendly cryptocurrency works in its favor and makes it a worthwhile investment option because it uses only six gigawatt hours per year, as opposed to Bitcoin that consumes 130 terawatt hours. This means that the former uses energy of about 600 homes in the US, while the latter’s energy consumption is equal to that of the country of Argentina. This is primarily because of the proof-of-stake (PoS) system that Cardano uses, as opposed to Bitcoin’s proof-of-work (PoW) and even Ethereum is trying to switch.
- Its founder helped create Ethereum
The team that founded Ethereum included Charles Hoskinson, but the latter left the team in 2014 after a disagreement with Vitalik Buterin, the inventor and co-founder of Ethereum. Hoskinson began working on Cardano in 2015 and it shares a lot of similarities with Ethereum. They are both programmable blockchains that can be used by others for developing apps and utilize smart contracts.
- It can handle plenty of transactions
Some of the biggest cryptocurrencies have had problems with scalability. Bitcoin can process five transactions in a second and Ethereum can process 15, which means slower transactions and higher fees. In contrast, about 1,700 transactions are processed by Visa per second. When it comes to Cardano, it is able to process 257 transactions in a second and its working on adding a layer called Hydra that will potentially allow it to process a million transactions in a second.
See more: Common misconceptions about blockchain
- It has a wide range of uses
One of the most important things to know about Cardano is that this project is very ambitious and its technology can be used in a variety of industries. For instance, Cardano has partnered with the Ministry of Education in Ethiopia for storing tamper-proof records of about 5 million students. When they go for jobs and higher education, their achievements and records will be available on the blockchain. Cardano’s technology can also be used in the world of finance, healthcare and also agriculture.
- It has a research-first approach
An aspect of Cardano that makes it different is that its development process involves a peer review. Academic experts and engineers that specialize in cryptography and blockchain technology are vital in the process of building Cardano. Yes, it means that developments may not occur rapidly, but the advantage is that security issues can be identified through peer review that could otherwise lead to problems in the future.
- It is available in a limited quantity
A crucial feature of Cardano that you should know is that this cryptocurrency, like Bitcoin, also has a supply cap. There will only ever be 45 billion ADA that exist and currently 32 billion of them are already in circulation. It means that if the popularity of the token takes off, the limited supply will certainly lead to increased demand, which means a higher price in the future.
All of these features of Cardano that you discover make it obvious that it is a worthwhile investment when you are thinking about expanding your crypto portfolio. You can sign up with a cryptocurrency broker to trade Cardano, or you can use an exchange to buy it.