It seems as though a new cryptocurrency or blockchain platform that fans are sure will “shake up the market” appears every year or so. And no, cryptocurrencies haven’t done away with fiat currencies quite yet. But this futuristic development might still occur … with enough support.
Today, let’s break down Cardano and compare its value to the U.S. dollar directly.
What is Cardano?
Cryptocurrency could indeed be the way of the future. More people are investing in crypto than ever before, and over 73% of Americans expect crypto to eventually replace the dollar. With this in mind, it’s important to understand how Cardano stacks up against other cryptocurrencies on the market.
Cardano is a relatively new — and is not, itself, actually a cryptocurrency. Instead, it’s a new, third-generation blockchain platform that provides an efficient alternative to the standard proof of work (PoW) network used by Ethereum and similar coins.
In place of proof of work, Cardano uses a more decentralized proof-of-stake (PoS) platform. As a result, Cardano has improved scalability and sustainability compared to many other cryptocurrency platforms, including its primary competitor, Ethereum (CCC:ETH-USD).
Why does this matter?
Well, proof of stake systems minimizes the energy needed to facilitate a blockchain system. As a bonus, limiting how many devices can verify a transaction may prevent the market capitalization that has been seen with Bitcoin (CCC:BTC-USD) and Chinese BTC farms or machine collectives.
Cardano’s primary cryptocurrency is called ADA. Like Bitcoin, ADA only has a limited supply of coins (though it is much higher than Bitcoin’s limit of 21 million BTC). ADA’s limit is 45 billion coins. At the time of this writing, there are over 32 billion ADA in circulation. In theory, this will help to prevent inflation up to a maximum value amount.
Benefits of Cardano
Cardano’s proof-of-stake blockchain platform, and its ADA currency, is getting a lot of attention because of several key benefits that competitors must now try to match. For one, Cardano is energy efficient. This stands in stark contrast to other, less eco-friendly crypto coins like Bitcoin and Ethereum. Cardano only uses about 6 GW hours of energy per year, while Bitcoin consumes a whopping 100 TW hours-plus of energy per year.
What’s more, Cardano is able to handle a large number of transactions. Unlike other cryptocurrency platforms, Cardano has excellent scalability. Through testing, it has so far processed 257 transactions per second. In theory, it may eventually grow to 1 million transactions per second, pending an upgrade to the blockchain platform called Hydra.
Cardano may also eventually be suitable for a wide range of uses, such as storing tamperproof records for students, authenticating pharmaceutical orders and providing personal records tracking for consumers’ important financial metrics, like creditworthiness. Blockchain startups like this are growing thanks to recent investments, so betting on Cardano’s eventual versatility may be wise.
That said, not every crypto exchange currently offers Cardano or ADA. Time will tell whether this blockchain platform is adopted as readily as its predecessors.
Cardano ADA to USD
At the time of this writing, a single ADA digital token is worth $2.15 USD. This is a significant increase compared to how ADA began in September 2017, when it was just $0.025 (that is, less than 3 cents).
Cardano saw another spike in growth in August 2021, reaching a record high of $3.0992. It has since dipped down to its current value, but there’s no denying the growth potential in this crypto platform. Does this mean Cardano is a screaming buy? It could be, depending on your goals.
Ultimately, it remains to be seen whether Cardano will become the next standard for blockchain consensus-building or if Bitcoin’s original model remains king. Like all cryptocurrencies, one must invest responsibly when working within this volatile market. Still, Cardano’s new proof of stake model will certainly do what it promised and shake up the crypto market – hopefully for the better.
On the date of publication, Kiara Taylor did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.