What Is Cardano and Is It Worth Investing In It In 2021?

13 Min Read
Last Updated March 27th 2021

What is Cardano and Is It Good Idea to Invest in Cardano ADA?

What is Cardano? Is it a cryptocurrency? Is it similar to the most popular cryptocurrency out there, Bitcoin? 

The short answer would probably be “no”. 

Cardano is so much more than that. 

Today, we will introduce Cardano and explain how and why it’s expected to become one of the most important cryptocurrency worldwide. We will also try to answer the following questions -  What is Cardano? Is it a good investment?” and “Should I invest in Cardano in 2021?”

What Is Cardano?

Cardano is a decentralised platform that allows people to execute transactions beyond borders and deploy smart contracts and decentralised apps (dApps). Cardano was launched in 2017 to restore trust in economies through the integration of technology and also to allow unbanked individuals to access financial services.

Interestingly, Cardano’s founders Jeremy Wood and Charles Hoskinson worked on the Ethereum ecosystem, but then the team split.

That said, Cardano is not your average digital asset. It is defined as a third-generation cryptocurrency with potential implementation in supply chain traceability and governance.

This means that Cardano may overtake Bitcoin, a first-generation cryptocurrency, by resolving its scalability issues; Cardano may also overtake Ethereum, a second-generation cryptocurrency, by providing a safer peer-reviewed platform for smart contracts.

As Cardano developers stated, they try to “provide a more balanced and sustainable ecosystem that better accounts for the needs of its users as well as other systems seeking integration.”

Additionally, Cardano differentiated itself from other cryptos as it attracted professors and researchers to incorporate peer-reviewed and academic principles into its design.

No surprise that Cardano managed to raise $62 million during its Initial Coin offering (ICO) and started collaborating with high-level companies across FinTech and academic sectors.

How Does Cardano Work?

Cardano is a third-generation coin that aims to improve scalability, interoperability, and sustainability to reach large-scale blockchain adoption.

Its development has been supported so far by three different organisations: the Cardano Foundation that oversees the development of the Cardano community; Input Output Hong Kong (IOHK) that builds the blockchain; and EMURGO that takes care of the promotion of Cardano’s commercial applications.

Note that Cardano’s development is scheduled in five stages or eras: Byron, Shelley, Goguen, Basho and Voltaire, with Goguen being scheduled for this year.

A unique feature of Cardano is its two layers: the Cardano Settlement Layer (CSL) used as a balance ledger to settle transactions and the Control Layer used for smart contracts. This separation allows organisations to custom-make the design and privacy of their contracts.

Here we should note that Cardano was able to process only 10 transactions per second, while now it is able to process around 257 transactions per second. Hydra, Cardano’s Layer 2 scaling, may help Cardano process over one million transactions per second in the future.

Another unique feature is its consensus mechanism Ouroboros. Ouroboros is a chain-based proof-of-stake protocol, which features mathematically verifiable security to reduce cyber attacks. 

Cardano also relies on a decentralised autonomous organisation (DAO) to approve new initiatives and prevent splits.

Here it’s worth mentioning that there are different Cardano epochs that consist of slots, with slot leaders being chosen through a coin tossing protocol.

What Is ADA?

Cardano’s native coin is called ADA. ADA is one of the top-performing digital assets in 2021.

Though this crypto has been on the market only for a few years, it managed to become one of the most traded coins in the crypto field. Note that there is a max supply of 45 billion ADA coins.

At the moment of writing, ADA has a market cap of $11,011,583,971 and a 24-hour trading volume of $2,619,111,256.

Among its various benefits, ADA is also one of the cryptocurrencies with the best use cases. It has possible applications across health care, agricultural, and retail services. It can be used for product identification and supply chain traceability.

On top of that, the Cardano Foundation is collaborating with different countries in Africa and other places to improve sustainable growth and open access to financial services.

Is It Worth Investing In Cardano In 2021?

Yes, given its strong development roadmap and high market cap, there’s no doubt that Cardano is worth watching in 2021.

Some of the factors in Cardano’s favour are its strong team of computer developers and scientists. Also, let’s not forget that Cardano is supported by three organisations, which improves its adoption and development.

IOHK, for example, managed to open a research lab at Wyoming University to develop a crypto-authentication microchip that can provide experiences similar to using fiat money without connecting to the Internet.

Cardano is also worth considering because of its vision to resolve scalability and improve sustainability and safety. 

Besides, Cardano provides a strong and secure wallet to store ADA, Daedalus.

That said, despite all these promises and tech advancements, even the experts cannot say if Cardano is a good investment for you. Cryptocurrencies remain volatile and risky!

Would you Consider Investing in Cardano ADA?

How Much Will Cardano Be Worth In 2021?

Though price predictions remain speculative, many experts believe that based on past and technical analysis data, ADA prices will continue to grow. 

The good news is that ADA has overcome numerous milestones and has grown significantly over the years. Note that Cardano was $0.021 when it was launched and reached $1.22 on Jan 4th, 2018, which is a return of 6,000% in a few months. For the same period, its market cap grew from $0.56 million to over $31 billion.

Looking back, Cardano’s team raised over $63 million during Cardano’s ICO and as mentioned above, ADA hit all-time highs of almost $1.22 in January 2018.

The first half of 2019 was also positive, with buyers showing interest and pushing ADA to $0.10 on April 3rd, 2019. In December 2019, Cardano found support at the $0.03 price mark.

Cardano started 2020 ready for a bull run, which was the aftermath of its consolidation in 2019. By the end of February 2020, ADA was trading at over $0.07.

Yet, Cardano experienced a dramatic drop in March 2020 when the ongoing coronavirus pandemic caused the first wave of the bear market.

Many experts believe that the coin’s price will reach its all-time high of $1.2 in 2021.

Cardano’s development may push mass adoption further and influence prices moving forward. According to Capital, ADA will reach $1 by the end of 2021.

Some analysts believe that by the beginning of 2022, ADA will be trading at $0.72 and reach $1.73 in August 2022.

DigitalCoinPrice, for instance, also suggests an upside price movement and claims that ADA will be trading at around $0.20 by 2026

CoinFan, on the other side, says that ADA will be trading $0.45 in 2025.

As Cardano keeps boasting one of the most supportive communities of crypto traders and blockchain enthusiasts across forums and platforms, there’s no doubt that Cardano is here to stay long after the end of 2021.

What Will Affect ADA Price In 2021?

There are many factors that affect Cardano price, including crypto news, tech developments, demand and supply, and market sentiment.

As stated above, Cardano has managed to overcome different milestones and boast a vibrant community. Cardano moved to the Shelley era in July 2020, boasting its decentralisation nature and delegation principles.

The Goguen mainnet, planned to launch around March 2021, is another milestone that may affect prices. Note that Goguen aims to improve smart contracts and dApps functionality, which will also expand use cases.

This will bring Cardano a step closer to establishing itself as a real Ethereum killer.

Another factor that will drive ADA prices up is the fact that the Cardano Foundation is expanding and welcoming new members and researchers. For instance, Cardano has teamed up with Wolfram Alpha, the largest computational knowledge engine globally.

Additionally, Cardano published its voting app Catalyst on Google Play Store, enabling mass adoption.

That’s not all! Cardano is planning to establish ATMs for ADA in Japan – and that would be huge! Japan is actually one of the leaders in blockchain and crypto acceptance and regulation.

So, based on its strong team and superior technology, ADA predictions for 2021 look good. Believe it or not, according to Smartereum, if ADA continues with its tech improvements as a third-generation coin, it may hit $10 in the next five years.

Should I Invest In Cardano?

trade cardano

With different tech advantages, a strong development roadmap, and a variety of use cases, Cardano is considered as a good investment.

Who should consider adding Cardano ADA in their portfolios?

  • Crypto investors who believe that ADA will reach new highs beyond 2021; 
  • Crypto day traders who see potential in ADA and its high trading volume in the short-term; 
  • Blockchain enthusiasts who believe that as third-generation crypto, ADA will overtake Bitcoin and Ethereum in the years to come; 
  • Large institutions and online services that support ADA use cases and mass adoption.

ADA is also a great choice for investors who simply want to diversify their portfolios and reduce risks. No wonder that the number of ADA wallets is increasing. On January 5th, 2021, for instance, 4,000 ADA wallets were registered.

That said, though buying and trading Cardano is alluring, cryptocurrencies remain volatile and investors might risk all their funds without the possibility of returning them.

That’s why always do your research before you invest in any asset and decide for yourself if possible returns outweigh potential risks. If you decide to get started with Cardano investing, remember an important rule: never invest more than 2% of your funds on a single move.

Ready To Invest In Cardano ADA?

Key Points

  • Cardano is one of the top cryptos in terms of market cap and technology advancements.
  • Its two-layered architecture and Ouroboros mechanism make Cardano unique. Note that Cardano is considered third-generation crypto.
  • Cardano’s native coin is ADA. Interestingly, the number of ADA wallets keeps increasing.
  • The Goguen mainnet, planned to launch around March 2021, is one of the milestones that may affect Cardano and its prices in 2021.
  • Based on past performance and technical analysis data, as well as Cardano’s development roadmap and vision for the future, experts believe that ADA prices will reach new highs in the next five years.

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