The little-known cryptocurrency Cardano (ADA) has come out of nowhere to become the third largest after Bitcoin and Ethereum after a recent price spike as blockchain enthusiasts look for more climate-friendly options.
The price of Cardano is up over 36% in the last week and has a market capitalization of $90.60 billion (€76 billion), according to a crypto site. CoinMarketCap.
What is Cardano and what are the reasons for its success? Here’s everything you need to know.
What is Cardano?
Cardano is a blockchain platform that has its own internal cryptocurrency called ADA.
The tokens are named after Augusta “Ada” King, or Ada Lovelace, a 19th-century British countess known for her work on the theoretical computing engine. She is considered the first computer programmer and the daughter of the poet Lord Byron.
Cardano was created in 2015 by Ethereum co-founder Charles Hoskinson and launched in 2017. Since then, the token has returned 7,080 percent to investors.
Cardano is the largest cryptocurrency using the proof-of-stake blockchain model, which is considered a greener alternative.
As crypto enthusiasts become more aware of the environmental impact of cryptocurrencies, Cardano has an edge over bitcoin and ethereum, and this may be one of the reasons for its recent success.
Recent data from Bitcoinenergyconsumption.com shows that Bitcoin’s estimated annual emissions are over 57 million tons of CO2 per year, which is about the same as the annual carbon footprint of a small European country.
Meanwhile, Iran and China temporarily banned all cryptocurrency mining this summer because the computers used in the process used too much electricity and caused power outages.
Proof of Stake works by randomly distributing coins among users who deposit coins as collateral. This is different from the proof-of-work mechanism used by both Bitcoin and Ethereum, which requires a global network of computers to be running simultaneously when a transaction occurs.
This method is intended to encourage increased computational resources for transactions that consume much more power than proof of stake.
On its website, Cardano says, “We have changed the science. We have changed what it means to create global systems and sustainable patterns of exchange and governance.
“Together with our community and partners, we are defining a new future: a decentralized future without intermediaries, in which power returns to the individual.”
What are the reasons for the success of Cardano?
The cryptocurrency market has been growing for the last two weeks. Bitcoin and Ethereum are leading the way, but “altcoins” — alternative digital currencies to Bitcoin — are also gaining momentum in the price race.
The increase in the price of Cardano came after a major upgrade called Alonzo was announced, which will be launched in September.
Alonzo will introduce smart contracts on the blockchain. Smart contracts are programs stored on a blockchain that run when predetermined conditions are met. They are typically used to automate the execution of an agreement and allow Cardano to deploy its own smart contracts and pave the way for its own decentralized applications (dApps).
Another reason for Cardano’s surge is that from August 25, its coin will be listed on the Japanese exchange after authorization in the country, which is considered one of the most stringent criteria for entering the market.
This means that ADA Cardano will join the elite Bitcoin, Ethereum and Litecoin coins in Japan, where it will be put to the test.