As of Dec. 26, 2021, users will not be able to open new Cardano (ADA) or Tron (TRX) positions. Additionally, staking for those assets will end on December 31, 2021 with the final reward payout going to users on January 15, 2022. These changes are due to business-related considerations in the evolving regulatory environment. Learn More.
Cardano (ADA) has become one of the fastest growing blockchain assets in the entire cryptocurrency industry. ADA has been a top-10 cryptocurrency by market capitalization since it was released in 2015, and it has garnered significant hype. Its technology is advancing at rapid speed and looks to take on the likes of Ethereum in building a massive blockchain ecosystem.
Cardano distinguishes itself by using mathematical principles in its consensus mechanism and a unique multi-layer architecture, which makes it stand out from other competing blockchains. With a team that had a hand in the creation of Ethereum, many are convinced cardano is the next generation of cryptocurrency solutions.
Let’s take a look at cardano, its technology, and what makes it such a compelling cryptocurrency in which to invest your money.
What is cardano?
Similar to other cryptocurrencies, ADA – Cardano is a digital coin that can be used to store value or send and receive funds. The ADA cryptocurrency runs on the cardano blockchain, a first-of-its-kind decentralized network, based completely on scientific and mathematical principles and designed by experts in the fields of cryptography and engineering. The cardano blockchain can be used to build smart contracts, and in turn, create decentralized applications and protocols. Additionally, the ability to send and receive funds instantly through, for minimal fees, have many applications in the world of business and finance.
Instead of attempting to thwart global regulators, cardano is building a blockchain with regulation in mind, to provide financial services to all.
Cardano looks to solve many of the blockchain industry’s current problems, including:
- The use of mathematics to provide a provably secure blockchain that is less prone to attacks
- Separation of accounting and computational layers
- Creation of a secure voting mechanism for token holders
- A consensus mechanism that is infinitely scalable
Cardano blockchain architecture
The cardano blockchain consists of two core components. The Cardano Settlement Layer (CSL) acts as a unit of account and is where token holders can send and receive ADA instantaneously with minimal transaction fees. The Cardano Computational Layer (CCL) is a set of protocols which is the backbone of the blockchain, and helps to run smart contracts, ensure security and compliance, and allow for other advanced functionality, such as blacklisting and identity recognition. The cardano open source code is written using Haskell, a universally recognized and secure programming language.
Cardano works on a specially designed proof-of-stake (PoS) blockchain protocol for consensus called Ouroboros. This consensus mechanism allows for ADA to be sent and received easily and securely at all times, while also ensuring the safety of smart contracts on the Cardano blockchain. At the same time, as a PoS consensus mechanism, Ourboros provides rewards to token holders who stake their ADA to the network and help ensure network consensus.
The Ourboros process goes like this:
- The network randomly selects a few nodes to have the opportunity for mining new blocks. These nodes are known as slot leaders.
- The blockchain is split into slots, each of which is called an epoch.
- Slot leaders have the ability to mine their specific epoch, or subpartition of an epoch. Any participant who helps mine an epoch or part of an epoch receives a reward for their services.
- An epoch can be partitioned infinitely. This means, the cardano blockchain is, in theory, infinitely scalable, making it possible to run as many transactions as needed without hitting a bottleneck.
The biggest benefit of Ouroboros is its mathematical security in choosing blockchain validators. Other blockchains claim they choose block validators at random, but these claims are not able to be verified. On the other hand, Ourboros offers a provable way to randomly select a validator and ensure all token holders who stake ADA to the cardano blockchain have a fair chance of mining a block and receiving the associated reward. This eliminates any need for excessive computational power prevalent in proof-of-work (PoW) blockchain networks and guarantees an objectively fair staking model that is not found in any other PoS blockchain protocol.
Unlike other major cryptocurrencies like bitcoin and Ethereum, cardano has its own wallet for the ADA cryptocurrency. With the Daedalus wallet, users don’t just get a wallet, they run a full blockchain node, giving them total control over their funds and the ability to ensure transparency over the Cardano blockchain.
Additionally, Daedalus serves as the only wallet where ADA holders can take part in the Cardano staking system. Because Cardano operates a PoS blockchain protocol as previously mentioned, token holders can receive rewards for either delegating ADA, or running a staking pool within the Daedalus wallet. This gives cardano (ADA) holders the opportunity to earn cryptocurrency while supporting the network.
Uses for ADA cardano
The cardano coin can be used as a transfer of value in a similar way that cash is currently used. This is not much different from other cryptocurrencies like Ethereum and bitcoin, but ADA has other uses as well.
One of the core principles of cardano is its PoS blockchain protocol where ADA is staked to the blockchain to help stake pool operators successfully verify transactions on the blockchain. This is where cardano crypto comes in handy. Those who stake their ADA to the blockchain are rewarded for their efforts with more cardano crypto in return. This staking system helps maintain security throughout the blockchain.
There is also the use of ADA in voting. In cardano, unlike other blockchain projects, it is not miners that vote and decide on changes to the protocol, it is token holders. Therefore, when a new change or development is proposed to the cardano blockchain, cardano crypto holders use their ADA to vote on these proposals. This way, everyone who owns the cryptocurrency has a say in its development.
In the future, ADA will also be used to power the smart contract platform on the cardano blockchain. Developers will utilize ADA to create smart contracts and applications that run on the secure, decentralized cardano blockchain. Without a native cardano coin, there would be no way to execute these contracts.
Who created cardano?
In the early days of Ethereum, one of its co-founders, Charles Hoskinson, saw the need for a more standardized, and scalable blockchain. With his mathematics background, Hoskinson began thinking about more scientific ways to build a blockchain. During this time, Hoskinson connected with Jeremy Wood, a former co-worker at Ethereum who was looking to create a better blockchain and smart contracts platform. The two began to pursue cardano as it exists today.
The major stakeholders of ADA
Even though Hoskinson and Wood are the masterminds behind the core principles and smart contract platform that make up Cardano, they do not own or operate the Cardano blockchain. In fact, there are a variety of different stakeholders involved in the project.
- Cardano Foundation – Acts as a nonprofit, custodial entity for the entire project to help market and ensure security of the blockchain.
- IOHK – Founded in 2015 by Hoskinson and Jeremy Wood, this research and development company has helped with the design and engineering of the Cardano blockchain.
- EMURGO – Acts as a large funding entity to financially support Cardano and assist with its development.
Is cardano really better than Ethereum?
Both cardano and Ethereum have similar goals and aspirations in that each wants to be the world’s primary decentralized blockchain platform for building new tools and protocols. When Hoskinson left Ethereum, he recognized the need for a different kind of blockchain that would be immediately scalable and secure, two things that he feared Ethereum would never become. Currently, Ethereum is having its own issues with scalability, and it’s already going through its second iteration of the Ethereum blockchain in order to ramp up its scaling. And while Ethereum is more than ten times the size of cardano in market capitalization, the project did have a significant head start.
Here are a few differences between the two projects:
|Start Date||September, 2017||January, 2014|
|Figurehead/Leader||Charles Hoskinson||Vitalik Buterin|
|Consensus Mechanism||PoS||PoW (moving to PoS)|
|Architecture||2-layers (Caradno Settlement Layer and Cardano Computational Layer)||1-layer|
Unlike other blockchain technology, cardano is still relatively new. It was only launched in 2017 and has spent the first several years of its existence under development.
Cardano has laid out five distinct phases for its blockchain. Currently, Cardano is past its Shelley stage of the process, and is working toward finishing the latter half of its phases:
- Byron – Creates the foundational architecture of the network and tests the initial functionality so the network runs properly.
- Shelley – Launches the cardano mainnet and begins decentralization of the blockchain network.
- Goguen – Implements a smart contract platform, allowing for the function of building decentralized applications.
- Basho – Scaling solutions are to be implemented, allowing for blockchain optimization and improved performance.
- Voltaire – Introduces treasury and voting systems to create a self-sustaining network.
Even though these are five distinct phases, many parts of each phase run in parallel with one another. Each phase goes through a variety of processes themselves before being integrated into cardano. There is heavy academic research that has gone into each step of the process. Prototyping is also an important part of the process, as each piece of open source code must be rigorously tested to meet predetermined technical specifications before being implemented.
While these roadmap phases have often been delayed, Charles Hoskinson and the developers of cardano are quite confident in their ability to follow through with the roadmap as promised, and deliver the world the next generation of PoS blockchain protocols.
Cardano price and supply
ADA cardano has traded in-line with much of the cryptocurrency industry over the past several years. During the bull market of late 2017 and early 2018, the price of ADA shot up from $0.03 to $1.20, valuing the project at close to $32 billion. While early investors were afforded an immediate 3,900% return, this would be short lived. As you can see in the cardano chart, the price of cardano began to steadily decline over the next several years.
While the price of cardano has declined back below $1, it is believed that if the project can perform in the ways it has promised, the value of ADA should have no problem rising.
In addition to its price, it is important to note that ADA has a fixed monetary policy, meaning, there will only ever be 45 billion ADA created. Once that number is reached, no more cardano crypto will ever be created. Cardano sold 25,927,070,538 ADA during its initial sale, with the remaining about 19 billionADA set to be released through the blockchain as rewards for mining blocks. The remaining ADA is set to be distributed in staking rewards through generated blocks on the cardano blockchain.
Because there is only a set number of ADA that will be in existence, in theory, there will be an increasing demand for the coin. This deflationary monetary model is expected to create demand for ADA in the future.
How to buy cardano
You can quickly and easily buy cardano on eToro with fiat currency in just a few easy steps.
- Sign up for an eToro account
- Verify your account to ensure security
- Deposit funds into eToro via wire transfer or bank deposit
- Use the deposited funds to trade ADA on eToro.
But hold on just a minute. How do you know if you are getting a good cardano price on your trade? On eToro you can easily see the cardano price, chart, and conversations about cardono all in one easy platform — so you can trade ADA knowing you have excellent tools and information at your disposal. Navigate to the cardano chart to see its price history and get an idea of a good cardano price prediction for the future.
eToro provides transparent trading fees for everyone. Unlike other cryptocurrency trading platforms, you will never be charged hidden fees when trading on eToro.
Now that you know all there is to know about cardano, you can trade ADA on your own, with Toro.
Staking Cardano on eToro
You can receive staking rewards when you hold on to Cardano. Staking is a process that allows users who own and hold supported crypto on eToro to earn rewards just for holding them. In the case of Cardano, the rewards come in the form of additional ADA — think of it as interest.
eToro’s Staking Service does not currently include cryptoassets held using copy trading, smart portfolio, or in the eToro Wallet.
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This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this guide. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.