Should You Buy Cardano Cryptocurrency?
How Does Cardano Work?
Cardano uses a proof-of-stake algorithm as opposed to a proof-of-work system. To verify and authenticate transactions, proof-of-work blockchains use ‘miners’ who need powerful computers to solve mathematical puzzles.
The proof-of-stake algorithm uses ‘validators’ instead, who can provide or delegate currency to a stake pool to help run the network as well as earn rewards for their successful participation.
The blockchain will ultimately use two layers, a settlement layer and a computational layer. The settlement layer allows users of the network to send and receive coins between digital wallets.
The computational layer will allow users to start up and sign on to smart contracts. This layer takes in to account the chance of regulatory changes in different countries, being adaptable to the requirements of end users.
What Are the Use Cases for Cardano?
As well as a blockchain platform for cryptocurrency, Cardano has the potential to address issues in a number of industries.
- Government – Cardano blockchain technology can offer a digital identity service to allow users control of their credentials when verifying their identity. At present third parties are often required for verification purposes which adds a layer of administration, adding time and cost to the process.
- Finance – Reusable digital identification verification could reduce the time and effort required to open new financial products, such as bank current or savings accounts.
- Retail – Cardano blockchain technology could offer a solution to the increasing problem of counterfeit products by providing a secure system which shows an item as certified original.
- Education – Certificates of education can be stored on a tamper-proof Cardano blockchain system, decentralising the system and giving students ownership of their academic qualifications. This in turn will make the job application process simpler for students going forward.
Is Cardano Going to Be the Next Ethereum?
Charles Hopkinson helped develop Cardano and was a co-founder of Ethereum. With Cardano he aims to build a better blockchain, one which aids users as well as takes in to account the likelihood of increased regulation of cryptocurrency.
Ethereum has performed well since launching in 2015, becoming the second most popular cryptocurrency.
The Cardano coin was released toward the end of 2017, but jumped in price from $0.02 to $1.22 per coin in a few months. The cryptocurrency market remains new and volatile. After a fall the Cardano coin rebounded back to £0.88 in February 2021, in comparison to Ethereum’s $1,828.
As Cardano was founded by the co-founder of Ethereum, Charles Hoskinson, it is natural that traders are keen to know if Cardano has a future as the next Ethereum or not.
Whilst Ethereum holds a bigger market cap, currently thought to be $148b, Cardano’s market cap remains substantially less as $11.24b. Nevertheless, Cardano is showing real signs that it could soon be on the same steady upward trend as Ethereum.
Whilst Ethereum is most well known for being a decentralised cryptocurrency that builds DeFi associated products, Cardano is by comparison a proof-of-stake style of platform, the first to be peer-reviewed as a blockchain provider.
With both currently bullish in the marketplace, it seems that whilst Cardano may not be necessarily the next Ethereum, it is certainly a worthy competitor.
Therefore, while still being in its infancy and having some way to go to surpass Ethereum in market value, the Cardano platform’s potential to create use cases across industries could see it become a major rival.