Investing in Cardano (CCC:ADA-USD) is not hard for people that believe its technological advantages will see it through. However, in the current crypto bear market, everyone is a little careful.
The crypto market has seen an extraordinary decline, with Bitcoin’s (CCC:BTC-USD) fall unexpectedly sucking the life out of many popular cryptocurrencies. But less liquid altcoins have been hit even harder. There are more coins than traditional currencies and stocks, making it difficult for investors who want just a few good picks without putting their portfolios in danger.
It’s not hard to see why Cardano is a potential “Ethereum (CCC:ETH-USD) killer.” The two cryptocurrencies have many similarities. However, they also have certain key differences could give one of them an edge over others. Bitcoin is a well-known cryptocurrency that has been around for the longest time. But it’s not without its drawbacks. Ethereum, on the other hand, offers many more benefits. And has many more use cases than Bitcoin, which is principally a medium of exchange.
Cardano offers a better balance of power between its two leading competitors. It offers a better approach to securing transactions while challenging Ethereum with its own blockchain that can provide smart contracts. The Cardano blockchain is a sleeping giant. It’s built on peer-reviewed research and avoids the pitfalls of its predecessors. It has the potential to become more powerful than Ethereum or Bitcoin. If you are looking to invest during this bear market, Cardano is a great bet.
Academic Backing Puts Cardano in a Different League
Cardano is a platform developed to become a fully decentralized, open-source, and transparent blockchain. It is the first peer-to-peer network to use a proof of stake (PoS) consensus algorithm known as Ouroboros. The project was started in 2015 to compete with Ethereum.
Cardano offers more advanced features than its predecessor. That includes the ability to send money in different currencies, a voting system for stakeholder approval of network changes, and a treasury system for fund allocation, among other things.
The Cardano team has identified three key problems with the current system of cryptocurrency exchanges: high fees, lack of liquidity and lack of user-friendliness. To address these problems, Cardano is creating a platform for currency exchange that will be open-source and decentralized.
In recent months, ADA has become increasingly popular because of its advanced technological features and concentrated focus on regulatory compliance. These features make it more attractive to big players like banks and finance firms, which are often cautious when adopting emerging technologies due to compliance risks. They have a talented team of engineers and researchers. They’re the first platform to come from a scientific background.
Charles Hoskinson is one of the main reasons to invest in Cardano. He was the CEO of both BitShares and Ethereum, now functioning as CEO for IOHK alongside many other subject matter experts in computer science and game theory.
This means that Cardano will have some of the best minds in the industry working on it.
Proof-Of-Stake Consensus Mechanism
One of the first to use a new and more efficient algorithm was Cardano, which many have seen as one with great growth potential. With proof of stake, you no longer need to invest in expensive mining equipment that depletes natural resources and performs acts damaging for our environment.
Cardano’s main rival Ethereum is shifting to a consensus mechanism called proof-of-stake (PoS) from proof-of-work (PoW). The transition from PoW to PoS is a big decision for Ethereum. The move will make it more energy-efficient and allow for better scalability as the number of transactions per second increases with less investment in hardware required by users. This year, the shift will take place and will have major implications for the blockchain. The Ethereum Foundation believes, post the transition, it will use at least 99.95% less energy than before.
Ethereum’s first-mover advantage against Cardano has allowed it to carve out a niche in the market. While ADA’s focus on academia and nonprofits sets it apart from other coins, there are limitations when looking at private sector engagement as well. Experts agree that Ethereum’s simplicity makes it a more appealing blockchain for mass-market adoption. However, Cardano may possess some technological advantages over the competition.
Ethereum is undoubtedly the most popular choice for smart contracts. With its ability to develop DeFi and NFT ecosystems, it has become one of many go-to platforms in this new industry – with no signs giving way yet that any other coin will take over. Therefore, it is possible that Cardano plays catchup vis-à-vis Ethereum for a while.
The Eras of Cardano Roadmap
Cardano is being built in five developmental stages, each designed to enhance the functionality of its network. These eras comprise of Byron, Shelley, Goguen, Basho, Voltaire. The project is open source and its design strikes a balance between privacy and regulation. The Cardano blockchain will allow for the creation of decentralized applications, written in a variety of programming languages. All of its eras will deliver sequentially, with research happening in parallel across different streams for each era as it advances towards completion. But development doesn’t stop there.
Cardano is currently in the Basho era, where scalability and performance are primary objectives. With this goal of processing 1 million transactions per second (TPS), they hope to become a leader for blockchain technology with their goals set on achieving high TPS rates.
One of the biggest changes in the Basho era is the introduction of sidechains, which are separate blockchains that are linked to the main blockchain. Sidechains are an important step in increasing scalability, security, and decentralization. They make it possible for different blockchains to work together without the need for third-party services. The Basho era will help ADA-USD become resilient and flexible. Consequently, it will lead to the value of the blockchain’s token increasing overtime.
Cardano Is Gaining on Ethereum
Cardano is developed in two layers: the Cardano Settlement Layer (CSL), which handles transactions, balances, smart contracts, and more; and the Cardano Computation Layer (CCL) which will handle data storage for future applications.
Cardano’s blockchain uses a PoS protocol, which allows users to earn rewards for validating transactions on the network. This makes it more efficient than other cryptocurrencies like Bitcoin that use PoW protocol and require miners to solve computational puzzles before earning rewards. It also has several advantages over larger cryptos like Ethereum. However, although it has made up ground against Ethereum, that doesn’t mean it will overtake it anytime soon.
Ethereum is the most popular and well-known cryptocurrency in the world. It is also the second-largest market capitalization. It has a language called Solidity, which programmers can use to create smart contracts. This means that you can use Ethereum to build decentralized applications (DApps) run on a peer-to-peer network of computers worldwide.
Ethereum is improving its features with the new version, they are making the system more secure, speedier, and sustainable. The new Ethereum blockchain will be much quicker than it currently is because of sharding technology which divides up all the nodes into small shards with their consensus system. This will allow transactions to process much faster than currently in Ethereum 1.0. It is already the go-to platform for DeFi and NFTs. Ethereum still holds the first-mover advantage and leads Cardano by a fair margin.
One of the Best Cryptos for 2022
Cardano has the goal of solving the world’s problems with its blockchain technology. They are looking to become the next generation of blockchain with a scalable and sustainable platform.
The Cardano team has made significant progress since its launch, which has led to their token ADA being listed on many exchanges around the world. Its peer-reviewed approach, solid use cases, and robust development roadmap put it in a different league to most digital currencies. That makes it an excellent buy in today’s crypto bear market.
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.