About Cardano

Cardano was a largely unknown cryptocurrency at the start of 2021 for many people, but it has since powered its way to become one of the largest and most popular cryptos on the market. 

But like any cryptocurrency, cardano is not without its challenges — it’s been long-watched and much-hyped in crypto circles, but also largely underperforming when you look at its numbers, according to Avik Roy, managing partner at Roy Capital Advisors and author of “Bitcoin and the U.S. Fiscal Reckoning.” 

Much of its popularity in the market has been driven by retail interest and the enthusiasm of the community behind cardano, Roy and other experts say, and it has maintained more value than crypto experts expected. 

“Cardano is interesting because there’s certainly a gap between how much retail investors find it interesting relative to the crypto industry, where there’s been a lot of criticism,” says Roy. “Cardano’s success from a price standpoint has maybe over the long-term defied what crypto experts might have thought. Having said that, it obviously hasn’t been immune to the overall market.”

Cardano is the brainchild of Ethereum co-founder Charles Hoskinson, who left ethereum after disagreeing with Vitalik Buterin about the direction the blockchain platform was headed. Since 2015, Cardano has made a name in its own right — it’s part of a group of cryptos commonly referred to as “ethereum killers.” Though cardano nor any other “ethereum killer” has displaced the second-largest crypto, they are considered to be potential competitors. Like ethereum, cardano is a blockchain platform that developers can use to run smart contracts and build decentralized apps, non-fungible tokens (NFTs), and more. 

What makes it stands out is that it uses a unique proof-of-stake consensus mechanism called Ouroboros, as opposed to the energy-intensive proof-of-work system currently used by bitcoin and ethereum. In other words, cardano describes itself as a more secure, energy-efficient, and scalable way to maintain decentralization. However,  Ethereum’s much-anticipated technical upgrade known as the Merge — which will transition the network to proof-of-stake – could put it on par with cardano’s efforts. 

With cardano in the midst of a months-long bear streak, 2022 could be a make-or-break year for the altcoin.

How Does Cardano Work?

Cardano is an alternative blockchain platform to ethereum that uses a “proof-of-stake” system, in which owners of the cardano token are tasked with validating transactions in exchange for a reward. Its technology, called Ouroboros, stands out from other competing blockchains because it uses a peer-reviewed blockchain protocol. It aims to solve common problems that most blockchains face such as scalability, interoperability, and sustainability. 

What Gives Cardano Its Value?

Not only can you buy and trade cardano as an investment like bitcoin or ethereum, but it’s also a software platform developers can use to build smart contracts, and in turn, create new decentralized applications — often crypto-adjacent or otherwise designed to make buying, selling, and using crypto a smoother process. 

While the blockchain has a wide variety of use cases, the Cardano coin is primarily used in staking — which is a less resource-intensive alternative to mining that helps support the operations of the blockchain. It also allows investors to effectively earn interest on their ADA.

Like bitcoin, cardano has a limited supply. Only 45 billion ADA tokens will ever exist in its lifetime, which gives it scarcity. In principle, that means the more cardano grows in demand, the more valuable it will become. 

Cardano Market Cap

Cardano’s market capitalization has seen a huge range recently, from about $20 billion to more than $100 billion. The exact number is found by multiplying the current number of coins in existence — nearly 34 billion — with its price at a given time. As cardano’s price fluctuates, which it does frequently, so too does its market capitalization. In the past few weeks, cardano’s price has been between around 40 cents to $3, which translates into a significant range in market capitalization:

• $0.60 x $34 billion = $20.4 billion
• $1.50 x $34 billion = $51 billion
• $3 x $34 billion = $102 billion

How to Buy Cardano

Cardano is a popular altcoin, so it’s relatively easy to add to your crypto portfolio. The first step is to find a cryptocurrency exchange that allows you to purchase cardano. If you’re a newer crypto investor, it’s best to stick with a mainstream exchange such as Coinbase, which we think is the best overall exchange for most investors. Other popular mainstream exchanges that you can buy cardano on are FTX, Kraken, Crypto.com, Binance.US, and eToro. 

Once you do your research and pick an exchange, you’ll need to fund your account by connecting a bank account or another funding source to the exchange and depositing a designated amount of money into your wallet. It’s important to do your due diligence and only invest what you can lose (experts recommend keeping any crypto investments below 5% of your portfolio). Once you fund your wallet on the exchange, you can start purchasing ADA tokens. The minimum or maximum amount that can be purchased in a single transaction and the fees you’ll pay will vary depending on the exchange.

There are few ways you can store your new ADA tokens after buying them. If you want to keep it simple, you can keep your tokens stored directly in your exchange account. But if you’ve got an array of holdings and want some extra security or privacy, you might move your coins off the exchange into your own hot or cold wallet. 

Cardano Price History

Like any smaller altcoin, investing in cardano comes with plenty of risk. Experts point to its potential and relatively stable (albeit short) history among top cryptos by market cap as factors investors might consider before buying cardano.

Development of the cardano platform began in 2015, though it wasn’t until October 2017 that it began trading publicly at the price of a few cents per coin. By the start of 2018, it was trading for more than $1 and reached a market cap of $28 billion briefly before a general tightening of the crypto market dropped its value back to a range of 15 to 20 cents. It stayed within that price range from 2018 until the start of the 2021. 

The token entered 2021 trading at less than 20 cents and rallied to eclipse $3 by early September — becoming one of the fastest growing blockchain assets in the entire cryptocurrency industry. Cardano primarily surged after Hoskinson announced the launch of the Alonzo hard fork in August 2021, gaining 116% in the following month. 

Ahead of the launch, cardano price broke the $3 mark and hit an all-time high of $3.10. On Sept. 12, 2021, cardano’s Alonzo hard fork officially launched, bringing smart contracts to the blockchain. The platform added over 100 smart contracts in as little as two days after the launch. The token primarily hovered between $2 and $3 until December 2021 when it fell near $1.30.

Cardano doubled its value in 2021, but has also cooled off significantly in 2022. At the beginning of the year, cardano was trading around $1 but has seen significant drops since then amid a broader retreat from risky assets like stocks and cryptocurrencies. It’s now trading at around 60 cents per token. 

More recently, Cardano briefly surged in price by nearly 20% and overtook Ripple to become the sixth-largest cryptocurrency by market capitalization. The recent surge has been attributed to cardano’s highly-anticipated Vasil hardfork upgrade. The blockchain is slated to start testing its upgrade on June 2 with a mainnet launch by the end of June. It will be the network’s most significant overhaul since September 2021.

Cardano vs. Ethereum 

Cardano and Ethereum are often compared to each other because they’re both blockchain platforms that have similar offerings.

But what makes them different from one another is the algorithm it uses to create blocks and validate transactions. The major difference at the moment is that ethereum’s proof-of-work blockchain is proving less flexible and efficient than cardano’s proof-of-stake Ouroboros consensus protocol. In other words, ethereum is more limited by its infrastructure — it’s more expensive to use, uses more energy, and the transactions are slower as a result. Though, ethereum is slated for a massive upgrade in June, where it will transition from proof-of-work to proof-of stake. It will change how transactions on ethereum are ordered, making it more efficient and sustainable for widespread use.

Cardano basically aims to be a solution to ethereum’s problems, positioning itself as an alternative blockchain. Yet, the development of cardano has been slow. Cardano only launched its first smart contracts in September 2021, about six years after it went live. While there are hundreds of projects on the cardano chain that say they are under construction, only a few so far are live. 

“There’s been a lot of criticism of cardano from the crypto industry, even though it’s led by very smart, talented people,” says Roy. 

Another big difference between cardano and ethereum is their market value. Cardano’s price is more affordable at 60 cents per token compared to ethereum right now, which costs nearly $2,000 per ether token. However, ethereum is one of two cryptocurrencies that investing experts recommend beginners stick to (the other being bitcoin), because it’s more-established than other lesser-known cryptos. 

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