Editor’s note: This article was updated on Jan. 12, 2022 to indicate Cardano is aiming to become a proof-of-stake crypto.
Cardano (CCC:ADA-USD), the cryptocurrency that aims at becoming a new standard in cryptocurrency design and proof of stake (PoS) implementation, is headed towards its target. Founder Charles Hoskinson has shared with us some of their achievements for this year and what is next up for the platform in a Christmas address.
Cardano had a very successful year, with many milestones and achievements to its name. One such milestone was becoming recognized within the world of NFTs (non-fungible tokens), which have seen incredible growth this year. The other was the addition of smart contract functionality thanks to the Alonzo hard fork.
Cryptos have been taking the world by storm for the last couple of years. However, there is a propensity to invest based on impulse in this area. Therefore, you need to have solid use cases when putting your hard-earned money in this space. The Cardano roadmap for 2022 provides you with solid use cases in spades.
For many altcoins, last year was a watershed moment. Although several tokens with solid use cases saw massive gains, meme coins shot into the stratosphere. However, it is very unlikely they will repeat their performance next year.
Cardano, though is in a different league. It seeks to build on Ethereum’s (CCC:ETH-USD) success while evolving it in exciting ways. With more scientists working on Cardano than any other cryptocurrency, this project has great potential for growth and innovation. Investing in Cardano is like owning a piece of the future.
Over recent years, this cryptocurrency’s growth has made it one of, if not the most highly valued digital assets on today’s market, and with good reason. As it ramps up its use cases and moves along its development roadmap, the future looks very bright for this altcoin.
Exciting Times Ahead for Cardano
One of the most exciting things about Cardano is that it’s attracting new projects with its smart contract functionality. There are currently 127 projects that use Cardano’s blockchain, and 20 to 30 are scheduled launches over the next three months of 2022. Cardano’s blockchain is a hot commodity for Africans, and next year it will be even hotter.
In an effort to help catalyze the African startup environment, IOHK has set up a new investment and incubation program. They have set up the EMURGO Africa program to support high-impact entrepreneurs on this continent; it will be an important part of supporting businesses across all industries with opportunities they can’t get anywhere else.
IOHK has several enterprising programs to solve the financial inclusion issue in Africa. Starting this coming quarter, they will be developing a new system that gives people access to DeFi services. Considering the number of unbanked in Africa, the move is a gamechanger. Cardano could eliminate the cost and time constraints of transactions like loans or investments, drastically changing the financial infrastructure of the continent.
The company is excited about its future and wants to work with even more businesses. They have been in contact with over 15 companies currently developing Cardano-based projects worldwide. And this number continues to grow rapidly. Nation-states or universities could soon use the Cardano network to develop and maintain a robust governance infrastructure digitally. According to the Cardano development team, this is just the tip of the iceberg.
Investing in Cardano Is Not without Risk
Cardano is another extremely volatile asset like most cryptocurrencies. Most of the real value comes from its Alonzo hard-fork and smart contracts. A major update to the Goguen era builds on its smart contract capabilities. Cardano brought about the new phase of development in tandem with Shelley. The earlier period introduced PoS protocol Ouroboros over a year ago as part of the overall initiative towards securing and decentralizing the network itself.
While Cardano’s founder has high hopes for the protocol, it still faces stiff competition in a market that may now be oversaturated. Other well-known developers are also targeting this space, and plans could change quickly due to changing needs or priorities from governments worldwide who want more control over how cryptocurrencies work within their borders. Look no further than China and India. The two most populous countries in the world are taking a tougher stance on cryptos. If the U.S. follows suit, the whole sector might come crashing down. That will make the 2017 crypto crash look like a cakewalk in comparison.
The Cardano project continues to update its protocol to compete with other well-known developers who are targeting this space. But Ethereum, the biggest competitor, still has its fans. It was designed to develop “smart contracts” — making blockchain technology more accessible for businesses and users without having any programming knowledge. Hence, it still has a leg up on the competition. And as it transitions to a more structured, proof-of-stake system, it will continue to provide stiff competition to Cardano.
How to Play This Altcoin?
The idea of a blockchain-based economy is intriguing to many people. Blockchain, in theory at least, could remove the costs and constraints associated with centralized services such as banks or government agencies by providing all financial transactions on one publicly accessible ledger that anyone can access without any third-party intervention needed.
Therefore, cryptocurrencies are a new and exciting investment opportunity that can diversify a portfolio. However, it is important to keep the golden investment rule in mind when pouring capital into this space. Do not invest money you can’t afford to lose. When you invest in crypto, wild swings are par for the course. It’s not like investing in dividend aristocrats or safe long-term stocks that produce robust returns over time.
If you’re investing in Cardano, it’s important to consider its long-term prospects. The project aims to execute complex transactions without involving third parties like banks and brokers, which could open up new markets that would increase demand for ADA cryptocurrency — potentially increasing their value. It’s a solid proposition, especially compared to the meme coin frenzy out there.
On the publication date, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.
