Why Cardano Will Skyrocket
Blockchain technology and cryptocurrencies are fast revolutionizing the world of finance and investments. Retail and institutional investors consider this emerging asset class a solid store of value and a hedge against economic uncertainties. The recent crypto marketwide rally indicates that these digital assets are soaring in value and present endless opportunities.
While everyone is aware of Bitcoin, the largest and the oldest cryptocurrency, it is essential to remember that it is not the only promising crypto asset. Cardano (ADA) is currently one of the leading blockchain-powered networks, and with a market cap of $46,29,88,75,634, it is the fifth-largest cryptocurrency out there.
Considering key factors such as price history, technical capabilities, network updates, and community support, we have compiled a guide outlining why Cardano is poised to skyrocket in 2021.
Why Choose Cardano?
Cardano (ADA) is a third-gen public blockchain and decentralized application (dApp) development platform. Notably, the first generation of cryptocurrencies like Bitcoin introduced the world to a reliable decentralized cash system. Shortly after its launch, Ethereum (ETH) entered the market with a focus on dApp development. This was mainly the purpose of second-gen cryptocurrencies.
Third-generation cryptocurrencies such as Cardano have learned lessons from Bitcoin and Ethereum to improve upon their shortcomings. Virtual currencies such as ADA employ new developments like layered architecture to enhance security, scalability, and sustainability. In this manner, they rectify inefficiencies and create more use cases. Hence, the crypto community widely regards Cardano as the potential "Ethereum-killer."
Cardano strives to offer many of Ethereum's compelling capabilities, including robust smart contracts. Cardano creator Charles Hoskinson designed the platform meticulously to support fast transactions with minimal fees and be energy-efficient. Additionally, Cardano offers one other big perk. It has a strict cap of 45 billion coins. On the other hand, Ethereum has no absolute limit to its total eventual supply. The scarcity of coins helps drive the price of ADA to new highs.
The programming community of Cardano is active, and the project has drawn significant interest in 2021 as the environmental impact of digital assets has made media headlines.
Is Cardano Going To Skyrocket in 2021?
As a third-gen crypto platform, Cardano is working toward tackling some of the most prevalent issues affecting large-scale blockchain adoption pertaining to scalability, speed, and interoperability. Cardano seeks to manage these issues through the best engineering practices and the development of design principles.
For these and many more reasons, Cardano is poised to skyrocket in the future.
Factors That Help Cardano Surge to New Heights
#1 Interoperability and security
Today, there are over 7000 cryptocurrencies in the market, each with its unique characteristics, advantages, and ecosystem. Cardano attempts to introduce new standards in the market to facilitate interoperability across networks. These systems include upgraded protocols, blockchain governance models, new feature sets, etc.
Enabling blockchain interoperability poses certain risks that developers must address. The Cardano team is constantly working towards addressing these safety concerns. Currently, the network has standards for managing security, privacy, and decentralization.
#2 Unique features and technical capabilities
Cardano is implementing the highly-anticipated "smart contract" functionality, which means adding code that enables automated, self-executing contracts. These smart contracts let developers build applications on top of blockchain networks, such as Ethereum's infamous Uniswap decentralized exchange (DEX). The entire decentralized finance (DeFi) market is built on smart contracts (much of it on Ethereum). Notably, Cardano is about to join the party.
The Proof of Stake (PoS) employed by Cardano guarantees complete security and high speed of transactions. This blazing speed means that the network might eventually handle up to a million transactions per second (TPS).
Furthermore, Cardano utilizes time slots, each known as an epoch. Here, 'slot leaders' voted by stakeholders have to create transaction blocks within a time frame. Epochs are a distinct part of the Ouroboros Praos Census Algorithm and help improve the wallet's performance. Storing the blockchain in Epoch files helps users reduce the number of files and hard drive space needed to store the blockchain otherwise.
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.
#4 Cardano's Architecture
Cardano has a novel layered blockchain architecture that comprises two main elements. One is Cardano Settlement Layer (CSL), which is used to execute crypto transactions. The second one, the Cardano Computational Layer (CCL), enables developers to enter and maintain applications.
This two-layered network reduces slower transactions, network congestion, and higher fees (often caused by a single-layer architecture). The CSL powers seamless peer-to-peer (P2P) transactions and guarantees safe token transfers between users. At the same time, CCL is the lifeblood that ensures the chain's security. It works as a ground zero to deploy smart contracts as well as a framework built to ensure regulatory compliance with jurisdictions.
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Why Cardano Will Skyrocket: Expert Predictions
Cardano is surging in popularity and adoption, in part because of its efficient PoS mining mechanism that limits its carbon footprint. If the network works further towards sustainability, then it might attract environment-conscious investors. In turn, this could hike the price up to $3.294 by the end of 2021.
If more celebrities question the environmental aftermaths of cryptocurrencies like Bitcoin, ADA's price will eventually surge. It will likely reach new all-time highs at $5.17, according to experts. This is because ADA would act as a better alternative, and more people will start investing in this token.
Should You Invest $1000 in Cardano Right Now?
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 as the second-largest cryptocurrency. So investing in ADA now could be a great idea.
Although Cardano may not be an overnight success, it has enough merit to remain a top-tier competitor in the crypto sector.
The Bottom Line
Cardano appears to be strong, and given the current low price, many investors see it as a worthy long-term bet. Remember to perform due research before investing in any crypto.
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