Cardano is among the biggest newsmakers in the cryptocurrency domain right now. In line with leading coins Bitcoin and Ethereum, it is making a rebound after lows in May this year.
Cardano’s native coin ADA has also made rapid strides and became the 3rd largest digital coin by market capitalization. In doing so, it has left behind many other leading currencies. Binance Coin and Tether now rank 4th and 5th respectively.
ADA has moved up more than 1000 percent since the beginning of this year. As of August 27, 2021, it is trading at $2.62 with a market cap of $84.4 billion. The native coin of open-source Swiss blockchain Cardano, it was created for the members to participate in the network’s operations. By default, it transfers the power to ADA coin holders to vote on any software upgrade.
Regulators and economists have recently called for compelling use cases of cryptocurrencies to be taken seriously. Accordingly, ADA creators maintain the blockchain is on course to upgrade to 4th generation by allowing for modular development of decentralized apps and smart contracts.
Cardano: History and features
Cardano began as the third generation blockchain network. In comparison, Bitcoin and Ethereum are considered to belong to the first and second generations of blockchain technology. It aims to compete with Ethereum by being a more secure, scalable, and efficient network. However, Cardano is trying to achieve what Ethereum has done consistently for a long time.
While investors have turned their focus and attention to ADA in a big way, there are still some questions on whether it has the potential to repeat the success of Ethereum.
Cardano vs Ethereum
The network that Cardano hopes to emulate and surpass is Ethereum. That is because Ethereum supports decentralized apps, DeFi, NFT and smart contracts. It is something that Cardano also promises to do, and in a better way.
The Cardano network works on “proof of stake” unlike Ethereum’s “proof of work.” When a miner tries to validate a Cardano transaction, they have to show the coins they hold as proof of stake. In the case of Ethereum, a miner has to validate the transaction through proof of work which involves working out a puzzle, which takes more time and consumes more energy.
That said, Ethereum has already made progress in tackling some of its challenges mentioned above. Improvements include its recent London Hard Fork. A more formal shift to Ethereum 2.0 is expected by the end of this year.
Cardano's road ahead
Cardano's recent tie-up with UK-headquartered blockchain forensics company Coinfirm to ensure strict regulatory compliance of ADA Is also a step in the right direction. Cardano was also speculated to become online retail giant Amazon’s official crypto payments partner.
Many investors are bullish on Cardano as it is energy-efficient and because of the plans to implement smart contract capabilities on the network. Called the “Alonzo Mainnet hardfork”, Cardano’s smart contract protocol is all set to go live on September 12. This upgrade will allow developers to build exchanges and other DApps like Defi and NFT on its network.
(Edited by : Yashi Gupta)