Cardano is one of the fastest-growing cryptocurrencies and is set to take on Ethereum as one of the most popular blockchain building blocks for smart contracts and other apps.
Cardano is more than just another crypto brand built on borrowed technology even though traders can buy, sell or store value with the coin, ADA.
ADA – named after nineteenth-century maths wizard Ada Lovelace – is the currency, while Cardano is the blockchain.
Cardano was the first crypto based on scientific and mathematical principles by data scientists experienced in cryptography.
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How Cardano Works
Cardano lives on a proof-of-stake blockchain named after the famed mythical creature, the worm Ouroboros – a snakelike beast that eats its own tail. This consensus method lets the blockchain securely send and receive ADA.
The PoS mechanism also rewards miners for their participation in releasing new blocks.
The advantage of the Ouroboros protocol is mathematical security – the weakness of the proof of work mechanism is 51 per cent attacks if the attacker can mine coins quicker than the rest of the network. In a PoW network, the aggressor can wind time back and rewrite the blockchain, which gives the hacker double spending by both owning the asset and the money spent to acquire it.
Cardano is gaining traction as a smart contract platform and one of the fastest growing cryptos as a scalable, secure and effective blockchain.
The crypto is currently listed as the eighth most popular by market cap. Cardano has a total market value of $16.8 billion, nestling a shade behind Binance USD, with a $17.4 billion market cap and Ripple XRP with a market cap of $18.4 billion.
Built-in Wallet Bonus
Cardano has a built-in bonus for ADA traders – the Daedalus wallet. Daedalus runs a full blockchain node giving total control over any crypto owned. The wallet also offers staking as ADA held offers a network stake proportional to the mount of the crypto held.
Ouroboros picks who adds the next block to the blockchain and earns a reward for successful mining according to stakes held.
Traders can pool their stakes to increase their chances of gaining mining rewards.
What Can You Do With Cardano?
The main intention of Cardano’s creators was to provide a coin that transfers value in the same way as the US dollar or British pound.
Other uses include staking to gain mining rewards, secure voting within the blockchain by coin holders giving everyone supporting the crypto a say in future development, and a framework for secure contracts using ADA as a payment method.
One of the main uses for Cardano is in agriculture and food production. The crypto tracks produce from the farm to table. Other uses include an untamperable database storing educational qualifications and a secure way for manufacturers to detect counterfeit goods.
What Does The Future Hold For Cardano?
Cardano has a well mapped future as a cryptocurrency.
Hoskinson and Wood laid out five stages of development –
- Founding the network to run efficiently
- Decentralisation of the Cardano blockchain
- Opening a smart contract platform through the Alonzo fork
- Scaling and speeding up the network
- Introducing voting and treasury elements to support a self-sustaining network
The development is currently in phase three – decentralising the blockchain.
As an investment, Cardano is one of the foremost cryptos but really does not have many defining features to make it stand out as a rival to Bitcoin.
Much of the future as an investment depends on what happens to the planned upgrade of Ethereum from a PoW to PoS blockchain. Cordano is one of the largest PoS blockchains that offers lower fees and lower energy consumption for mining than Ethereum.
The upgrade could change all that if Ethereum changes as expected.
Despite the technological advances, Cardano’s price has slumped along with the rest of the crypto market and shows no sign of detaching from Bitcoin and Ethereum movements in value.
How Much Is Cardano Worth?
Cardano is a leading cryptocurrency that has traded in line with Bitcoin and other competitors since introduction in 2017.
An ADA is currently worth $0.4932.
The all-time high was $3.10 in September 2021 – at the time the Alonzo Hard Fork enabled smart contracts.
The record low was $0.01735, reached in October 2017, soon after Cardano was introduced.
Who created Cardano?
Named after 16th century mathematician and scientist Giralamo Cardano, the crypto was first proposed by Charles Hoskinson, one of the co-founders of the Ethereum blockchain. Hoskinson felt Ethereum was not secure enough and advocated moving to a more maths-based system.
Although Hoskinson and co-founder Jeremy Wood devised Cardano, they do not own the crypto.
The project is backed by the Cardano Foundation, a not-for-profit that oversees the entire development.
Alongside the foundation sits Embargo, the project’s funding entity and IOHK, an R & D company headed by Hoskinson and Wood.
How many ADAs are there and what’s the limit?
The Cardano network is set to mint 45 billion ADA, but is expected to take decades to reach the cap.
The founders wanted a fixed supply to make ADA a deflationary currency. The current ADA supply in circulation is 34 billion with a market cap of $16.8 billion.
Is Cardano anonymous for users?
The Cardano blockchain is an open, public record of all ADA transactions. Although anyone can view the transactions, they are identified by a key rather than the holder’s name. Users cannot trace names and addresses unless the key holder chooses to do so.
Beware if you access Cardano through an exchange. Know Your Customer rules in the US and Europe require exchanges to identify their customers. Governments and tax authorities have access to these records.
Can I mine Cardano?
Cardano is not mined by solving equations to add blocks to the blockchain, like Bitcoin, but by proof of stake. Under PoS, new blocks are added to the blockchain by the network, which rewards the user.
Are Cardano profits liable to tax?
Yes. Any profit is taxed as a capital gain in most countries, although the tax status of crypto depends on the laws where the investor lives. However, as a decentralised network, Cardano does not report to or allow supervision by a tax authority.
Can hackers steal my ADA?
Only users with a private key can move or spend ADA, however ADA stored in a wallet at an exchange may suffer a loss if the exchange is hacked. To be fair, if the Cardano blockchain could be hacked, it probably would already have happened.
Can I spend ADA like other money?
Many online merchants and organisations accept cryptocurrency as payment, including ADA.
Can I invest in a Cardano tracker?
Several exchange-traded notes and contracts track the value of Cardano
How much are Cardano transaction fees?
Gas prices – the cost of using a crypto network when making a transaction – are recognised as low on the Cardano network. They cost an average 0.16 ADA, which is a fraction of a US dollar.