Six Reasons Why Cardano Has Intrinsic Value

Learn more about one of the best-performing cryptocurrencies in the market - Cardano (ADA).

Last Updated October 11th 2021
7 Min Read

At A Glance:

  • Cardano is a third-generation public blockchain and dApp development platform that is garnering the attention of investors. 
  • ADA is an environment-friendly crypto asset that fuels the Cardano networking, making it an excellent investment choice.

Without a doubt, blockchain technology is on the rise. Cryptocurrencies have disrupted the world of finance drastically. Various crypto platforms are working to reshape the future of crypto with cutting-edge tech, and Cardano is one of them. Read on to know more about the six reasons why Cardano has intrinsic value.

Cardano is an emerging blockchain technology that appears to be the face of a secure and sustainable blockchain with groundbreaking use cases. According to the developers, Cardano is capable of “redistributing power from unaccountable structures to the margins." The network is a product of research based on peer review. 

Charles Hoskinson founded Cardano in 2017, barely two years after he helped create the Ethereum blockchain technology. He also co-founded Internet Online Hong Kong (IOHK), a company that built the Cardano blockchain. Let us learn about the six reasons why Cardano has intrinsic value and why you should consider investing in ADA.

Cardano uses a timestamping scheme called Proof of Stake (PoS). PoS is also the system by which the miners in the Cardano ecosystem validate and mine block transactions.

A stake is simply the number of coins, in this case, ADA coins, that one holds, which also determines one’s participation in the creation of new blocks.

Reasons Why Cardano Has Intrinsic Value:

1. Solid Fundamentals 

Cardano is an emerging blockchain network with solid fundamentals in place, making it a compelling investment choice.

Cardano (ADA) is a third-generation public blockchain and dApp development platform. The platform earned international media attention as the first blockchain to incorporate a peer-reviewed research strategy into its core principles. Today, ADA is one of the top cryptocurrencies in the world.

Notably, the first generation of cryptocurrencies such as Bitcoin introduced the world to a secure decentralized cash system. Shortly after its release, Ethereum entered the market with an overall focus on dApp development. This was the goal of second-generation cryptocurrencies.

Third-generation cryptocurrencies take the lessons learned from Bitcoin and Ethereum concepts and improve upon their shortcomings. Third generations cryptos such as ADA utilize new developments such as layered architecture to improve scalability, security, and sustainability. In this way, they create more usefulness, address flaws, and rectify inefficiencies.

New third-generation cryptocurrencies such as ADA can also utilize new developments done over the years. This includes security, sustainability, and multiple-layer architecture to improve scalability. However, unlike most blockchain projects, Cardano did not start with a whitepaper but due to peer-reviewed research carried out through evidence-based methods. For this reason, Cardano works according to a philosophy outlined from the outset by founder Charles Hoskinson. 

According to its website, Cardano separates accounting and computation, each into its own layer. Secondly, developers implement the core components of the platform in a “highly modular functional code." Most importantly, peer-reviewed research guides decision-making within the Cardano community.

Three key elements spell out how Cardano works in light of stated principles and philosophies. According to Charles Hoskinson and his team of developers, Bitcoin introduced Blockchain 1.0, which entails money transfer in a P2P ecosystem, and Ethereum ushered in Blockchain 2.0 by introducing smart contracts. Cardano aims to deliver Blockchain 3.0 by solving scalability, interoperability, and sustainability issues that had dogged the ecosystem. 

Check Out: How To Make (Or Lose) Money With Cardano (ADA)?

2. Environment-friendly

ADA is sustainable and scalable, making it a must-buy crypto token.

Both Bitcoin and Ethereum are based on energy-intensive Proof-of-Work mechanism models. These systems require miners to use powerful computers to solve complex math equations to win some cryptocurrencies for their efforts. This massive energy consumption involved has attracted heavy criticism in recent times. For instance, Tesla decided to stop accepting BTC as a payment option due to the negative environmental impact of mining.

Meanwhile, Cardano employs a much more eco-friendly Proof-of-Stake mechanism, in which validators hold their assets within the network to participate and get rewards. According to Hoskinson, the network is "1.6 million times more energy efficient" than Bitcoin. This feature of Cardano has impressed crypto newcomers looking for potential investments.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

3. Unique Features 

Thanks to many advanced cutting-edge capabilities, investing in Cardano is likely to pay off in the long run. 

Cardano boasts various unique, technological features. First, the network is multi-layered. Most blockchain platforms handle one aspect of the technology, which renders them useful only partially. Cardano incorporates all generations of blockchain into three layers, where each layer takes care of one blockchain generation. Ultimately, this architecture makes Cardano more powerful. 

Second, the platform has successfully implemented a Proof of Stake (PoS) system. The majority of the blockchain technologies implement a system of network operation called Proof of Work (PoW). However, poW is cumbersome, and hence, energy-intensive. On the contrary, the PoS consensus mechanism consumes less energy and completes transactions faster. 

Cardano is founded on peer-reviewed research. The development team has implemented an impressive academic rigor unseen anywhere else in cryptoverse. Unlike most projects based on code forked from either Bitcoin or Ethereum, Cardano is a product of original work. Perhaps that is why the platform pioneered innovations such as Ouroboros, which is a factor that has made Cardano stable and durable.

4. Practical Use Cases 

Cardano has many real-world use cases, making it an attractive investment asset for everyone.

Currently, Cardano is one of the fastest-growing cryptocurrencies in the crypto industry. The blockchain platform fuels this growth uses in the physical world. It is among the few blockchains that both governments and large enterprises use.

As mentioned before, Cardano aims to improve the smart contract functionalities provided on the Ethereum platform. In line with this, Cardano enables users to develop smart contracts that do not need them to enter into third-party agreements. Furthermore, they aim to make dApps as stable and secure as possible.

In terms of its uses, this platform is already helping out one of the world's most influential organizations, the World Health Organization (WHO). The body estimates that a substantial amount of pharma products currently being sold online is substandard or fake. Cardano blockchain has a solution to this problem in that it can easily validate and authenticate the source of all pharmaceutical products hence ensure safety to people worldwide.

Another vital use of this platform is securing all academic certificates. Developers have designed the Atala PRISM and ID and credential system that provides a tamper-proof ecosystem for storing these certificates and other data, including health records, civil records, and career references. Further, the BeefChain works with the Cardano system. It coordinates with primary producers to ensure there is transparency from field to fork. 

Cardano has also been assisting Ethiopia's Ministry of Education to build a blockchain-based universal student credentialing system.

5. Scarcity 

ADA has a limited supply cap, making it a scarce and valuable asset to have in one’s portfolio.

Cardano has set a supply cap on ADA. Currently, the Cardano network provides services to various industries, including agriculture, education, trading, and healthcare. More is yet to come on board.

Conventional banking systems involve banks (in collaboration with governments) choosing to print unlimited paper money without a backing value system. On the other hand, ADA tokens are scarce. This mechanism prevents the currency from deflationary and inflationary effects as no central controlling authority manipulates the supply.

Read Also: Will Cardano Make Me Rich in 10 Years?

6. Ouroboros Protocol 

Ouroboros is a protocol native to Cardano, which adds value to the growing blockchain network.

Ouroboros is Cardano’s defining algorithm, the first blockchain protocol to be based on peer-reviewed research, and the project’s solution to proof-of-stake. Essentially, the consensus protocol sits behind Cardano's capability as a decentralized proof-of-stake platform. It secures the network, validates transactions, and helps earn newly minted ADA.

Ouroboros divides transactions into epochs, which are subdivided into time slots. A slot leader is elected for each time slot and is responsible for adding a block to the chain. A new slot leader is required to consider the last few blocks of the received chain as transient. This is known as the “settlement delay." 

Bottom Line 

Similar to other digital assets, the price of ADA has been a bit volatile this year. So potential investors must be aware of this and consider Cardano a part of their broader diversified crypto portfolio. That said, Cardano is likely to outperform Ethereum and overtake it as the second-largest cryptocurrency. So investing in ADA now could be a great idea. 

Cardano has intrinsic value because of the mentioned factors. Although Cardano may not be an overnight success, it has enough merit to remain a top-tier competitor in the crypto sector.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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