Cardano is now the third most valuable cryptocurrency with a market cap of over $80 billion. Its native token- ADA, has given a return of nearly 1400% this past year, and it also reached a new all-time high of $2.97 on 25th August. While we are still waiting on Smart Contracts, it is time to look back and understand how a cryptocurrency came this far without ever having the functionality to create new financial products using its blockchain.
The third-generation cryptocurrency is expected to solve the trilemma problem and deliver what Ethereum promised. We still don’t know how ETH 2.0 is going to look like, but from the recent London hard fork, the path to scalable smart contracts looks promising. We also cannot change that the Ethereum network is currently acting as the best settlement layer for all applications. So what makes Cardano different? In this article, we will discuss major reasons why Cardano is thriving, irrespective of the environment.
One of the main differences between Cardano and other blockchains lies in how it is developed. By using a peer-reviewed system, researchers and scholars from different fields of science have a say in each development phase. Some market participants have had concerns with this type of system, but it seems investors have faith in Charles Hoskinson and his research-based frameworks.
Although this formal method takes a significant amount of time and is upsetting many folks out there, it is still the best way to minimize errors and gain insights from the world’s most intellectual individuals. In many interviews, Charles repeatedly mentions the work goes beyond what normal cryptographers imagine, and it is not normal crypto. The peer-review system and formal specifications of the development justify these systems’ value in the open market, so we need Cardano to mature more to see how impactful it can be.
“Peer review is not just posting a goddamn paper online having your friends look at it and say it’s open source”- Charles Hoskinson.
Even though we have established bitcoin majorly uses renewable energy for mining, people still have concerns regarding its long-term sustainability on hydropower and solar energy. To create more fear in retail investors, we have seen China crackdown on miners, making them relocate to other corners of the world.
This was when people turned towards Cardano. Suddenly, we realized how significant environmental impact could be, and we’re looking for green alternatives. In no way can we say Cardano is a superior cryptocurrency to bitcoin, but there is not much competition between miners in terms of energy conservation.
To offset the new generation of tokens, we either need them to be burned or staked. By locking up a significant amount of ADA, we minimize sell pressure and reward staking pool providers. When Cardano is compared with other cryptocurrencies like Ethereum or Polkadot, it is miles ahead, with more than 70% of its circulating supply staked. This means that $60 billion out of $80 billion is locked in stake pools.
In the case of Ethereum, it is far behind with more than $12 billion. The same applies to Solana. It is behind $11 billion, and Polkadot is just over $10 billion. According to PoolTool.io, the number of active pools and total stake addresses are 2830 and 782,826, respectively. The amount of ADA staked has been rising exponentially since the incorporation of the Alonzo upgrade. This lays the foundation for the smart contracts and allows Cardano to compete with BSC, Polkadot, and Ethereum.
African nations actively participate in the current crypto revolution to take advantage of seamless transactions and low fees. Cardano is one of the most used cryptos in 53 African nations. ADA holders believe in the PAN Africa blockchain implementation, and they trust Cardano will be the number one crypto to build financial applications. We have also seen the team at Cardano explore different nations of Africa, to understand problems and find the most suitable blockchain solution.
Cardano is already implementing its technology- Atala Prism- to give digital identity to 5 million students in Ethiopia. Holders of ADA are confident in this mission, and if it succeeds, the potential will be limitless for the Cardano ecosystem.
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Without a strong community, it is very difficult for a cryptocurrency to survive long-term. Currently, Cardano has one of the most loyal communities in this space who continue to accumulate, irrespective of market conditions. We had seen it several times when bitcoin and other cryptos were free-falling, but ADA did not show much correlation.
This kind of support is never seen before, as Cardano is still yet to deliver smart contracts. While the company is still in the development phase, they have built a great community that continues to show support and believes in the long-term vision. The majority of the community belongs to the retail side. In terms of ownership, they account for 78% or 29 billion ADA.
In conclusion, Cardano is one of one crypto that has reached great heights that no one imagined. With smart contracts weeks away, we can expect the token to pump even more. It still depends on the moves made by bitcoin, so it is better to check the correlation and how it is changing in the next few weeks. We may never see a crypto achieve so much while it is still in the development phase, so we need to see how the Goguen era plays out and only analyze why it took so much time.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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