Can Cardano dethrone Bitcoin? Main differences of these currencies
How Is ADA Different From Bitcoin?
Nowadays, the high volatility of cryptocurrency is due to the overheated market and the doubts of some investors about their investments. But in the future, price dynamics will be determined by the emergence of more efficient technologies that will replace the old, slower, and less optimized ones.
Today, Bitcoin and Ethereum blockchains reign supreme on the market. But they are rapidly catching up with Cardano — a third-generation blockchain striving to become the ideal version of the technology. Will it be able to push its predecessors?
Cardano is a public, decentralized blockchain and open-source cryptocurrency (as with Bitcoin, blockchain and cryptocurrency are named the same). Its emergence was the result of a collaboration between three organizations:
- the non-profit Cardano Foundation,
- the engineering firm Input Output Hong Kong (IOHK),
- and the Japanese Emurgo, which works with companies interested in implementing and integrating the Cardano blockchain.
According to numerous cryptocurrency overviews, the project is still at the beginning of its journey: the software is being actively updated. The radical departure of Cardano is the peer-reviewed blockchain. It was built from ground zero to overcome the weaknesses of existing technologies related to regulation, scalability, and privacy protection.
You can look at it differently: Bitcoin was the first generation blockchain. It introduced cryptocurrencies to the public, but it had and still has certain drawbacks. Second-generation blockchains like Ethereum have learned from Bitcoin’s mistakes. However, after overcoming some problems of Bitcoin, Ethereum faced others.
Cardano is trying to make the most of the experience and best practices of its predecessors. The table shows the main characteristics of these projects.
|Market capitalization||$596 699 108 623||$20 933 140 286|
|Consensus algorithm (protocol)||Proof of work (mining)||Proof of stake|
|Transaction data||Transfer of value||Multilevel smart contracts|
What is Cardano in Simple Words
ADA is the native token of the Cardano blockchain. According to the developers, Cardano (ADA) is a digital currency for fast and secure peer-to-peer value exchange. That is, without the involvement of intermediaries in the form of banks and other financial structures. Blockchain provides transparency and reliability of operations.
Its distinctive features are:
- ADA tokens were generated on their own blockchain.
- Thanks to the March 2021 update, new cryptocurrencies, including non-fungible tokens, can be generated on the Cardano blockchain.
- Investors can safely exchange ADA to BTC on different exchanges like Changelly.
- The coin is recognized as environmentally friendly. Its work consumes a minimum of energy (as about 600 USA/EN homes a year). Therefore, it is touted as an eco-friendly alternative to Bitcoin.
- The platform cooperates with African countries. An agreement has already been concluded with the Ethiopian Ministry of Education. On the blockchain of the project, 5 million certificates confirming the identity of students were generated. When employed, thanks to the document, they will be able to confirm their data.
- Due to the implementation of the Hydra update, the transaction speed is as high as possible. Hence, the coin is suitable for quick transfers between wallets and exchanges.
The coin is primarily used for fast P2P transactions. Besides, ADA gives ownership of a part of the network. The user can transfer their coins to the staking pool to delegate them or act as an operator and support the operation of the platform.
After the transition to the Goguen era, tokens will be needed to deploy smart contracts, develop, and use decentralized services and applications, and in the period of Walther will also become the right to vote. Coin holders will be able to put forward, accept and reject proposals to improve the network. They can exchange cryptocurrency easily.
How to get Cardano?
Since the network operates on a modified PoS algorithm, mining using video cards or specialized ASIC devices is not available. But you can get ADA in other ways:
- Creating an order on a crypto exchange.
- Private transfer.
- Buy cryptocurrency through an exchange service.
What affects the rate of cryptocurrency
Factors that change the price of ADA:
- Implementation of new updates. In particular, hard forks that improve the protocol, increase its scalability, and add new features.
- Change in the exchange rate of the first cryptocurrency — Bitcoin.
- Support for large investors and companies.
- Listing or delisting on cryptocurrency exchanges.
- New coins, including NFTs, generated on the project’s blockchain.
- The activity of developers in social networks, media, and scientific publications of the organizations behind the project.
What is The Result?
Bitcoin brought blockchain technology to the masses, but it itself is very far from ideal. The Ethereum platform has made some improvements to bitcoin technology but has faced growth challenges.
Cardano is evolving as an ideal blockchain that combines the experience and achievements of its predecessors. A proof-of-stake algorithm, an on-chain governance structure, and several key features will be released.
It will take some time before the final implementation of the third generation blockchain, and some software updates will be required. Most likely, this year, the popularity of the project will increase significantly — potential investors should keep this in mind.