Should you invest in Cardano (ADA)?
With thousands of crypto assets on the market, one of the most successful public blockchain networks to use the proof-of-stake consensus algorithm is Cardano or ADA. Due to its shared goal of building a connected yet decentralized network that permits smart contracts and dApps to operate, this network is currently regarded as one of the best alternatives to big assets such as Ethereum.
As the crypto sphere continues to change over time, many, including Bitcasino live casino players, are diversifying their portfolios by exploring more assets to invest in. Here is a closer look at Cardano or ADA if you are interested and considering investing in it:
What is Cardano or ADA?
Based on its market capitalization, Cardano is one of the cryptocurrencies with the fastest rate of growth and is currently regarded as one of the best-performing assets. Charles Hoskinson, a co-founder of Ethereum (ETH), came up with the idea for the coin while working on a research project.
With the assistance of several academic researchers and blockchain experts, including Jeremy Wood, a former member of the operations management team for ETH, its whitepaper was created in 2015. With two years of research, it is also the first peer-reviewed blockchain.
To address the scalability, interoperability, and long-term viability of the coins that came before it, namely BTC and ETH, the blockchain was first introduced in 2017.
The crypto used in Cardano is called ADA. Its name is a tribute to Ada Lovelace, who is widely recognized as the first computer programmer.
The token is primarily used to pay transaction fees and to reward a slot leader for forming the block, respectively. In addition to those two uses, ADA can also be used to pay for goods and services if the merchant accepts the token.
ADA is a Proof of Stake (PoS) coin, which means it can operate outside of the Cardano platform. This implies that the ability to mine or validate specific transactions may vary depending on the total number of ADA coins held.
A look into how it works
After Bitcoin and Ethereum, Cardano positions itself as the third-generation blockchain in the world. Its blockchain utilizes two protocols to operate. These are the blockchain’s dual layers and the Ouroboros PoS consensus mechanism.
The Cardano Settlement Layer (CSL) and Cardano Computation Layer (CCL), which are separate protocols, are designed to address the long-standing scalability and interoperability issues in the crypto sphere.
Cardano is a hybrid of BTC and ETH thanks to its dual-layered blockchain. The Cardano Settlement Layer (CSL), the first layer, verifies and records all of its transactions. It serves as the balance ledger for the network, recording each transaction.
On the other hand, the network’s development is managed by the Cardano Computation Layer (CCL). This can be used by developers to create decentralized programs and smart contracts.
The development of smart contracts and transaction settlement can happen simultaneously thanks to the dual-layer architecture. The network’s processing speed is increased as a result of two tasks being divided into separate layers. It differs from other coins because of this feature.
Cardano’s Ouroboros PoS protocol allows one block per validator, in contrast to Bitcoin’s proof-of-work mechanism, which pits miners against one another to validate transactions. This makes better use of the time and effort put forth by each member.
A certain amount of ADA must be staked by users to become a block validator. They are more likely to be chosen as block validators and receive ADA incentives the more ADA they stake.
This protocol allows for faster validation of more transactions. Cardano’s network can process up to 257 transactions per second, as opposed to BTC’s 7 transactions per second.
What makes Cardano or ADA an impressive digital asset
Cardano or ADA has become a promising digital crypto asset for Bitcasino bonus users over time due to its characteristics many investors look into. Here’s a rundown of some of them:
It is sustainable
Cardano wants to build its treasury system where its smart contracts can be stored to become a self-sustaining network. Through the aforementioned treasury, Cardano will receive a small portion of each transaction on the network. Simply put, it wants to act as a one-of-a-kind wallet for its users that they can use for a long time.
It is scalable
Users of Cardano won’t mine for coins the same way BTC users do. The Ouroboros PoS system, which is unique to the Cardano blockchain, helps determine how a person can confirm their transactions based on how many ADA tokens they own, as mentioned above. The Ouroboros, which operates in a peer-to-peer network and subnetworks, maintains the network bandwidth.
Additionally, ADA coins are distinct from BTC in that they rely on slot leaders as opposed to having anyone mine for coins. To be a slot leader, you need to be selected at random by Cardano’s algorithm.
In Cardano, blocks can only be created by slot leaders. A node with the power to help with the construction of the building blocks for the current slots is known as a slot leader. Any user has a chance to become the slot leader because Cardano’s algorithm determines who is eligible to be a slot leader. The owner of a particular node or coin is required for a user to be able to become a slot leader.
The primary function of Cardano is to act as a blockchain-based internet. Their fundamental tenet is that crypto can coexist even if each has its protocol and set of rules. BTC can easily be transferred into Ethereum with the help of cross-chain transfers made possible by the Cardano blockchain, just like Ripple can easily work with Litecoin and vice versa.
Advantages of using Cardano
Cardano could be argued to fill the same market niche as other blockchain networks on the market. The advantages that this decentralized network’s active users receive over competing networks are what set it apart.
Cheap transaction fees
When selecting a public blockchain network, cryptocurrency investors should also consider the transaction fee. Users can benefit from low transaction fees when using Cardano.
In comparison to Cardano’s average, which barely exceeds a single US Dollar, Ethereum once reached a daily gas cost of $197, which fails. The average transaction fee for Cardano at the time of writing is just $0.17.
Enhancing Ethereum’s scalability was one of the primary motivations behind the creation of Cardano. Cardano’s updated third-generation platform allows it to process over 250 transactions per second, far more than Ethereum’s average of 15 transactions per second.
The need for powerful hardware that uses a lot of energy was a major issue for crypto investors with Bitcoin mining. Thankfully, Cardano employs the proof-of-stake consensus algorithm, which uses 99 percent less electricity than Bitcoin.
In addition, Charles Hoskinson himself claimed that the network was 1.6 million times more energy efficient than Bitcoin in a 2021 interview with Forbes.
Where you can use this digital asset
After seeing how impressive Cardano or ADA is, there are tons of ways you can use it in your daily life. Here are some of them:
Voting for changes in Cardano
From time to time, proposals are made within Cardano that aim to improve or change something in the network. These suggested protocols are then voted on by ADA holders using the token itself.
This is one of the things that’s unique about Cardano since it leaves the decision-making to the token holders instead of the miners. By doing this, any user within the network that holds any amount of ADA can have a say on what’s to be changed.
Creating smart contracts
The smart contracts and decentralized apps that exist within the blockchain are made possible by ADA, which also powers Cardano. Developers use this token to carry out these contracts, and without them, the network is unable to profit from its specialized ability to run these types of applications.
Staking pool operators
ADA is used for staking to aid pool operators in verifying transactions. This implies that crypto owners receive more ADA for each successful transaction they complete.
It’s also crucial to note that the security of the blockchain itself is upheld by this process of transaction verification and ADA reward. You can be sure that there won’t be any fraudulent activity in the transactions thanks to the presence of these individual validators on the network.
ADA is similar to cash in that you can send money to another person using it. Compared to conventional banking procedures that involve a central authority, ADA and the Cardano network make it simple to transfer assets. As a result, transactions process more slowly.
You can always send and receive ADA safely and easily because of the PoS mechanism at play here. Each transaction requires 15 confirmations, and the process takes only a few minutes.
If you’re purchasing something from a store that accepts this crypto, this feature is also helpful.
Invest in Cardano or ADA
ADA is a safe investment because, as already mentioned, it is one of the most valuable cryptocurrencies by market cap. Along with its network, Cardano, ADA also shows why it deserves your attention thanks to its practical use cases, advantages, and benefits like faster transactions and eco-friendliness.