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Blockchain is one of the most popular technologies of the last decade, and it's growing at a fast pace. Along the way, this technology has paved the way for a range of decentralized applications, platforms, and cryptocurrencies. One of the biggest examples of such platforms is Cardano that has truly revolutionized the whole crypto world. Not only does it offer unique features, but it also offers better security protocols as compared to other cryptocurrencies.
Cardano also offers its own cryptocurrency, which is known as ADA, and currency it ranks as the top 5th cryptocurrencies in the whole world. If you're interested in this cryptocurrency and planning to invest your money in it, then consider reading this detailed guide till the very end. It'll answer all your questions, such as What Cardano is and how to mine ADA. So, without any further ado, let's dive into it.
What is Cardano (ADA)?
Cardano (ADA) is defined as a public third-generation blockchain technology like Ethereum that also offers a great platform for DApp development. But the fact of the matter is that it differs from other blockchain platforms in multiple ways. The biggest difference is that it’s the very first blockchain platform that comes with a unique strategy based on peer-reviewed scientific research. It's, in fact, one of the core principles of Cardano.
Developers and Governance
According to the governance model of Cardano, everything that takes place on this platform is defined by its community. In order to approve new initiatives and updates, the Cardano platform majorly relies on DAO (Decentralized Autonomous Organization). Not only does DAO ensure that the community remains satisfied, but it also prevents all the possible community splits that other cryptocurrencies experience, especially Bitcoin. Every community member (ADA holder) can vote to play his/her role in order to decide the network’s future.
What Problems Does Cardano Fix?
As mentioned earlier, Cardano is a unique platform, and since its inception, it was meant to be innovative. The main problems that this decentralized blockchain platform aims to solve are related to sustainability, interoperability, security, and scalability.
Some of the biggest problems that many other crypto platforms such as Bitcoin face are high transaction fees and the slowing down of the system because of high transaction volumes. Here are some of the problems that Cardano addresses.
Scalability
When the platform was created, it couldn't manage more than 10 TPS (Transactions Per Second). In order to deal with this problem, the founder of Cardano "Charles Hoskinson” released a paper. He introduced a new and innovative solution to solve this problem which is now known as Hydra. In order to complete the Cardano transactions quickly, Hydra processes them off-chain by utilizing the state channels. Resultantly, now the platform can easily complete more than a million transactions within a single second.
Interoperability
If you don’t already know, there are more than 5,000 different cryptocurrencies in the crypto world. Each cryptocurrency comes with its own ecosystem, benefits, downsides, and characteristics. One of the major goals of Cardano is to offer standardized models that people holding different cryptocurrencies can use to achieve interoperability across different crypto platforms. These models include specific feature sets, system upgrade protocols, and blockchain governance models.
Security
Cardano also comes with enhanced security. It was necessary to build additional security layers because of the blockchain interoperability that brings new threats and risks. The team behind Cardano has strict and high-level standards regarding security and privacy to ensure decentralization.
Energy Efficiency
According to Charles Hoskinson, the founder of Cardano, the platform is way more energy efficient than other crypto platforms. To put it in perspective, it consumes 1.6 million times less energy as compared to Bitcoin.
Ouroboros
The consensus mechanism of Cardano is unique, which is known as Ouroboros, which is a proof of stake protocol based on-chain. In order to approve new blocks to the chain, it relies upon different leaders, which are chosen randomly. The reward system of Ouroboros is similar to other digital currencies as the person that adds the new block to the chain earns the reward.
As we have discussed already, the native token of Cardano is known as the ADA token, which is named after Augusta Ada King, the countess of Lovelace. She was the daughter of Lord Byron (famous poet) and one of the most popular mathematicians of the 19th century. Cardano is relatively a new platform as compared to other famous ones such as Bitcoin and Ethereum. It entered the crypto world in 2017 by a couple of crypto experts (Charles Hoskinson and Jeremy Wood) who previously worked on Ethereum.
Currently, the total supply of Cardano ADA tokens is 32,704,886,184, according to CoinMarketCap. Additionally, Cardano has planned that there will be 45,000,000,000 ADA tokens over the entire lifetime of the cryptocurrency. Anyone who is interested in ADA can use it as a secure value exchange. No third party is required to mediate the process of exchanging tokens. Moreover, ADA can also be used for multiple purposes, such as acquiring services and decentralized applications available on the Cardano network.
ADA token Profile
Ticket
ADA
Max supply
45,000,000,000
Total supply
32,704,886,184
1-year price low
$0.0764
1-year price high
$2.966
Current Price
$2.91
Market cap
$91 341 820 317
Markets
Binance, Huobi Global, Coinbase
Cardano VS Ethereum
As Cardano was created by the people who worked on the Ethereum project, it’s important to discuss the similarities and differences between the two platforms. The following table explains everything that you need to know.
Properties
Cardano
Ethereum
Properties
Creation
Cardano
Cardano was created in 2017 by two crypto experts after a comprehensive study and research work to address problems associated with blockchain platforms.
Ethereum
Vitalik Buterin, a 19 years old young man, proposed the concept of Ethereum in 2013 and launched the platform in 2014. He was also the founder of Bitcoin Magazine publications.
Properties
Transaction Speed
Cardano
One million transactions per second
Ethereum
30 transactions per second (Ethereum 2.0 is estimated to offer 100,000 transactions per second)
Properties
Total Supply
Cardano
32,704,886,184
Ethereum
116,352,170
Properties
Ticker
Cardano
ADA
Ethereum
ETH
Properties
Market Cap
Cardano
$91 341 820 317
Ethereum
$231 020 846 660
Properties
Ranking in Capitalization
Cardano
5th
Ethereum
2nd
Properties
Identification
Cardano
Can be compulsory or hidden
Ethereum
Hidden
Properties
Layers
Cardano
2
Ethereum
1
How to Mine ADA?
Now that you understand what Cardano is and how it aims to solve different problems, it's time to understand how to mine ADA. Because of its proof of state mechanism, you might have already understood that it's not possible to mine Cardano ADA. It's a pre-mined digital currency, and it's impossible to mine it. However, it can be staked, which means you can earn ADA. For that, you’ll need to operate as a node in order to become a validator by participating in the platform’s governance. In simple words, you need to keep your crypto wallet with Cardano ADA online to confirm the transactions and earn additional ADA as a reward.
So, you don't need to have very powerful and expensive hardware, and you also don't need to worry about the complex mining process. The more ADA tokens you hold and stake, the more coins you will earn.
According to the development team of the platform, new features and updates will be released constantly throughout the Reward Era. It means that people with even a very small amount of ADA token will be able to participate in stake pools to earn additional coins. Because of the experience and expertise of the Cardano team, the platform is advancing dramatically in both technological and value terms, even without the availability of mining.
Uses for Cardano (ADA)
Cardano has revealed a long road map that contains some hefty goals. The main aim that Cardano wants to achieve with different plans and projects is to restore the trust of people in economic systems around the globe by integrating the Cardano platform. That’s why the network has come up with a more sustainable, transparent, and secure method to conduct business across borders. Another great aim of Cardano is to stabilize the sector of decentralized applications. Cardano can be used in the following ways.
Transfer of Value
People can use Cardano ADA as a transfer of value, just like other popular cryptocurrencies such as Ethereum and Bitcoin.
Secure Voting System
On the Cardano platform, all the people holding ADA coins can vote to decide new initiatives and upcoming changes, unlike other crypto platforms that only allow the miners to participate in voting.
Proof of Stake Protocol
Cardano ADA allows crypto users holding ADA to perform and verify transactions successfully and earn additional ADA coins. It also improves the security of the platform across the blockchain.
Traceability
The platform monitors and examines the production process from start to finish that keeps the platform from all types of counterfeit products.
Cardano Smart Contracts
Cardano platform has been particularly designed based on innovative technology to offer unparalleled sustainability and security to DApps (Decentralized Applications). The development of Cardano is in its last stages that will enable DApps support.
In simple words, smart contracts are computer programs or blocks of code that execute once all the conditions are met. These programs run on a blockchain, and they're used for the automation of agreement execution. Not only do smart contracts ensure that all the participants are certain about the outcome, but they also eliminate the need for any intermediary party and save a considerable amount of time.
According to a recent announcement of IOHK (Input Output Hong Kong), Cardano has successfully launched its Alonzo upgrade.
It’s basically the platform’s very first testnet and a part of the upcoming upgrading plan to deploy smart contract functionality. Moreover, it’ll allow the developer to create a vast array of decentralized applications by using the Cardano network for the first time. IOHK also explained that the smart contract functionality on the Cardano platform is expected to be fully functional in the last days of January 2023.
Alonzo's project is divided into three different phases, which are Alonzo Blue, Alonzo White, and Alonzo Purple. The complete project is going to take 90 days, and it will bring some of the most exciting features along with smart contracts.
Other Projects Launched on Cardano
There’s a range of projects that are launched on the Cardano platform with different functionalities and purposes. Here we have listed some of the famous ones.
Cardano SL
Cardano SL, or in other words Cardano Settlement Layer, is a digital currency which is developed by Input Output Hong Kong. It's basically a project that works like Bitcoin but offers some additional benefits and features with the aim to address the design flaws associated with the Bitcoin platform.
Daedalus
Daedalus is by far the most recommended wallet to store Cardano ADA because of its native structure. It’s a highly secure crypto wallet that has plans to support more cryptographic currencies in the future.
Scrypto
Scrypto is yet another innovative project launched by Cardano that is specifically designed for developers. It helps them to utilize the power of cryptography in a safe and easy way to develop new applications.
Cardano Blockchain Explorer
Cardano Blockchain Explorer is an excellent tool that allows crypto users (ADA holders) to analyze the history of all the transactions made in the Cardano blockchain.
Cardano (ADA) Performance
Cardano ADA has performed fairly well since its creation. However, because of its suitability and overall crypto boom, its value surged dramatically in the last few months. On 1st January 2023, the market capitalization of Cardano was only 5.4 billion US dollars. But within the course of a couple of months, it increased to 41 billion US dollars.
On 1st January 2023
ADA Performance
On 1st January 2023
Cardano (ADA) Performance
But it’s important to keep in mind that it still remains highly volatile. You can observe the following chart that clearly shows the volatility of the coin. In other words, it means that investing in Cardano ADA is very risky and can make or break your financial status.
ADA Performance
ADA
1m return
69.91%
1y return
187.62%
Should You Buy Cardano (ADA)
It’s important to note that Cardano ADA has a very long way to go as it’s still in its early phases. You need to keep this fact in mind before going to your favorite crypto exchange to invest your money in ADA coins. For example, the smart contracts on this platform are yet to be launched in the next couple of months.
There is no doubt that in recent months Cardano has shown great performance by skyrocketing its market capitalization and value. But it's also important to note that at one point, the market capitalization of this cryptocurrency reached 64 billion US dollars. But within a matter of days, it decreased significantly as well, and now it's about 45 billion US dollars.
That’s why it’s critical to understand how Cardano ADA works and whether it’s the right choice for you or not according to your unique financial goals and investing needs.
How to Buy Cardano (ADA): 3 steps algorithm
As mentioned, before investing in any cryptocurrency or any other asset, you must know your needs and the performance and market value of the asset you’re interested in. For your convenience, we have compiled a procedure that consists of three easy steps that you can use to buy Cardano ADA.
Market Analysis
Performing market analysis is the most important step that you cannot skip. Otherwise, you won't be able to achieve your financial goals, and it'll also increase the risk factor significantly. If you're interested in Cardano ADA, then not only do you need to understand its current market value and status, but you also need to explore its historical data. The following chart explains the progress of the cryptocurrency since its creation.
ADA Chart
Funding Account
Once you are done with market analysis and have made up your mind to invest in Cardano ADA, the next step is to choose the crypto exchange that you'll be using to buy Cardano. One of the best places (crypto exchanges) to buy Cardano ADA is Binance. Not only the platform supports more than 150 types of digital coins, including all the major ones, but it's also available in about 180 countries all across the globe.
If you choose Binance, then you'll need to open your account, which is a very simple process. You'll need to go to the Binance official website and click on the big yellow "Register Now" button. The system then will take you to another page where you'll need to enter your email address and choose a strong password, and that's about it.
Binance registration form
After creating your account, you'll need to verify it by going to your inbox by clicking on the verification link sent to you from Binance.
The next step is to fund your account, and for that, you’ll need to go to the main page of your Binance account. Here you’ll see multiple options in the top right corner, and you'll need to hover your cursor over the "Wallet" option. You'll see a drop-down menu appearing, and from there, you'll need to select the "Fiat and Spot" option, as shown in the following image.
Binance Account Funding
Now you'll be redirected to the next page, where you'll need to select the deport option from the top right corner to proceed to the next page. Here, you'll only need to select the desired currency. After clicking the "Continue" button, the system will ask you to enter your bank account's information, and the selected amount will be added to your Binance account.
Binance Account Funding
Binance Account Funding
Instead of using your fit currency, you can also fund your Binance account with cryptocurrency. For that, you'll need to click on the "Deposit Crypto" button, as shown in the image below.
Binance Account Funding
Buying Cardano (ADA)
Once you have funds in your account, you can buy any cryptocurrency that Binance supports, and you can achieve it by clicking on the trading button with double arrows, as shown in the following image.
Buying ADA
On the other hand, you can also buy Cardano ADA from Binance directly without first adding funds to your account. In the following methods, you'll need funds, of course, but they won't be added to your account, but you'll receive Cardano ADA directly.
In order to achieve it, you’ll need to go to the main page of your Binance account and select the “Buy Crypto” button from the top menu.
Buying ADA
The next page will ask you to select the amount of money for which you want to buy Cardano ADA. You’ll also need to select the Cardano option from the available list, as shown below.
Buying ADA
By clicking on the "Continue" button, the system will take you to another page where you'll need to enter your bank account details, and Cardano ADA will be added to your account.
As mentioned, Binance is the top-rated crypto exchange that'll suit you best to buy Cardano. If you're interested in any other cryptocurrency, then you can use this platform for that as well. Based on your location Binance only charges a 0.1 to 0.2 percent flat trading fee that is deducted on the spot. It means that you won't need to deal with any complex monthly or yearly charges and commissions.
One important factor that you must consider is to find out whether trading in cryptographic currencies is allowed in your country or not. Moreover, you’ll also need to make sure if Binance offers its services in your area. It'll help you to ensure that your investments are secure, and you can also contact the platform legally if you have any queries.
One of the most common yet difficult questions that many people ask is what are the best cryptocurrencies to invest in. Answering this question is not an easy task because it requires a comprehensive market analysis. Moreover, you also need to understand the platform and working mechanism of each candidate cryptocurrency. Not only does it take time, but it also needs to deal with complex analytical charts and financial data. In order to make the whole process easy for you, we have compiled a list of the ten best cryptocurrencies that you can choose in 2023 to invest in. We have selected these digital currencies after performing comprehensive market research that’ll save time and effort.
Currently, Cardano is performing amazingly, and it seems it'll continue doing the same throughout the year. The biggest reason why critics and financial experts have positive reviews about Cardano is its upcoming smart contract. It'll be one of the biggest steps forward by the platform that will help countless developers to create DApps in a most secure and safe environment. We hope that this guide will help you to understand what Cardano ADA is, how it works, and whether it's the right option for you to invest in or not. Make sure that you follow all the guidelines and procedures mentioned in this article to increase the chances of earning more profit—best of luck and happy trading.
FAQs
Will Cardano revolutionize the crypto world?
According to crypto experts, Cardano truly has the potential to overcome crypto giants such as Bitcoin and Ethereum because it addresses all the problems associated with other crypto platforms.
Will Cardano reach the 10 US dollar mark?
Yes, it's possible for Cardano to reach the 10 US dollar mark depending upon its historical and current performance, but it will take time.It should also be understood that cryptocurrencies are extremely volatile. If the market situation develops negatively, the value of any cryptocurrency may fall
Can I mine Cardano ADA?
The simple and one-word answer to this question is no. You can't mine Cardano ADA because it uses a proof of stake mechanism instead of proof of work. It means you can stake it to earn additional ADA coins.
What is the best way to store Cardano ADA?
The best way to store any cryptocurrency is to use a crypto wallet. The most recommended crypto wallet to store Cardano ADA is Daedalus.
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
The area of responsibility of Mikhail includes covering the news of currency and stock markets, fact checking, updating and editing the content published on the Traders Union website. He successfully analyzes complex financial issues and explains their meaning in simple and understandable language for ordinary people. Mikhail generates content that provides full contact with the readers.
Mikhail’s motto: Learn something new and share your experience – never stop!
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.
