Cardano: 7 things to know before buying it

Cardano is a cryptocurrency that has gone almost unnoticed and could be ready to make a breakthrough among the most important cryptocurrencies.

Launched in 2017, Cardano (ADA) is often referred to as a third generation cryptocurrency. It builds on what Bitcoin and Ethereum have done, while aiming to be more sustainable and scalable. This means that it is much more environmentally friendly, faster and safer.

Although it has some potential, Cardano has yet to gain mainstream attention and is considered one of the altcoins to watch. If you’re considering buying it, here’s what you need to know first.

Cardano is energy efficient.

One of the great advantages of Cardano is that it is an ecological cryptocurrency. For ease of comparison, here is how much energy Cardano, Bitcoin, and Ethereum are supposed to use per year:

  • Cardano: Six gigawatts per hour
  • Bitcoin: 130 terawatts per hour
  • Ethereum: 50 terawatts per hour

Remember that one terawatt is equal to 1,000 gigawatts. In other words, bitcoin uses about as much energy as Argentina, which has a population of around 45 million. Cardano uses about as many as 600 US households.

This is because Cardano uses a different system, called proof of stake, to verify transactions. Proof of Stake limits the number of devices verifying transactions at any given time, which helps keep power consumption reasonable. On the other hand, Bitcoin and Ethereum use the “proof of work” model. Proof of work does not limit the number of devices involved, which can lead to extremely high power consumption. It is for this reason that Ethereum is transitioning to a proof-of-stake model.

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The founder of Cardano participated in the creation of Ethereum.

Charles Hoskinson was part of the team that founded Ethereum with its co-founder and inventor, Vitalik Buterin. However, Hoskinson wanted it to be a commercial project, while Buterin wanted a non-profit project. Due to this disagreement, Buterin removed Hoskinson from the Ethereum team in 2014.

Hoskinson started developing Cardano in 2015, and it has many similarities to Ethereum. Both Cardano and Ethereum are programmable blockchains that other people can use to develop apps, and they both use smart contracts .

Cardano can handle a large number of transactions.

Scalability has been an issue for the biggest cryptocurrencies. Bitcoin processes around five transactions per second, and Ethereum processes around 15. This leads to slower transactions with higher fees. Visa, on the other hand, processes around 1,700 transactions per second.

In tests, Cardano processed 257 transactions per second. Cardano also plans to add another layer, called Hydra, to its blockchain . With this technology, it could potentially process 1 million transactions per second.

Investing in cardano in cryptocurrencies

Cardano has a wide range of uses.

Cardano is an ambitious project, and there are many potential uses for its technology in a variety of industries.

Cardano’s partnership with the Ethiopian Ministry of Education is a concrete and current example. The Cardano blockchain will store the tamper-proof records of five million Ethiopian students. When these students pursue higher education and find employment, their records and results will be available on the blockchain.

Here are other use cases for Cardano in different industries:

  • Healthcare : The Cardano blockchain can authenticate pharmaceutical products to avoid the risk of buying counterfeit drugs.
  • Finance : Cardano can be used in developing countries to register the identity of people and demonstrate their creditworthiness.
  • Agriculture : Blockchain technology can provide reliable supply chain tracking for farmers, transporters and traders.
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Cardano takes a research-driven approach.

One of the peculiarities of Cardano is that its development process is subject to peer review. Engineers and academic experts specializing in blockchain technology and cryptography are involved in building Cardano.

The peer review process means that Cardano is the type of cryptocurrency that evolves slowly and steadily, not one that experiences rapid change. The advantage of Cardano’s approach is that peer review can catch security issues that could otherwise lead to more serious issues down the road.

There are a limited number of Cardano available.

Cryptocurrencies can have a fixed or unlimited supply. Bitcoin is the most famous example of a cryptocurrency that has a fixed supply, as there will never be more than 21 million bitcoins.

The same goes for Cardano. Its maximum supply is 45 billion ADA, and there are currently around 32 billion ADA in circulation. This is not enough to guarantee a price increase. But if Cardano’s popularity takes off, the limited supply could help increase demand.

You will need a cryptocurrency exchange that offers Cardano.

As Cardano is one of the biggest cryptocurrencies, you can find it on many of the top cryptocurrency exchanges. Here are some popular platforms that listed it:

Like any cryptocurrency, Cardano comes with risks. We cannot be sure that she will achieve her goals or even be worth anything in the future. These are risks you take with any cryptocurrency investment. Nevertheless, it is easy to see why Cardano is getting investors excited. Now that you know more about it, you can decide if buying Cardano is right for you.

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