A historical event took place recently in the crypto ecosystem: Cardano has become one of the three largest coins by market capitalization. For years, Cardano lived under the shadow of more popular cryptocurrencies, but now it can officially be considered one of the leaders of the crypto market. What does it mean for blockchain investors?
What is Cardano?
Cardano (ADA) is a relatively new cryptocurrency, which was launched in 2017 by Charles Hoskinson, one of the main developers of Ethereum. The main goal of Cardano is building a cryptocurrency that is much more decentralized and democratic than the competition.
Unlike Bitcoin, which is built on the proof-of-work algorithm, Cardano uses another blockchain mechanism called proof-of-stake. What this means in practice is that the Cardano network doesn’t require massive amounts of energy to operate. Thanks to the use of proof-of-stake technology, ADA can be much more efficient than BTC or ETH.
What is Cardano used for?
Cardano wouldn’t become one of the top 3 largest cryptocurrencies without having an actual use case. Unlike many other coins and tokens on the market, Cardano has many real life applications which make ADA so valuable.
For example, the technology provided by Cardano is already used by agricultural companies around the world in order to help track fruits and vegetables to make sure they reach the consumers fresh. Schools and educational platforms use Cardano to store credentials on the blockchain in a secure way, while retail stores utilize ADA to stop the spread of counterfeit goods.
How much is Cardano worth?
Cardano’s market cap - in other words, the total worth of the entire Cardano network - is currently valued at almost $35 billion. A single ADA is worth $1.11. The reason that Cardano is only worth a little over $1 while Bitcoin is worth around $50,000 is simple - while there are only 21 million BTC in existence, the total supply of Cardano is much higher and 45 billion ADA exist.
When it comes to the competition, Cardano is going toes to toes with Tether (USDT) and Binance Coin (BNB), which both have a very similar market cap to ADA. Two leaders of the cryptocurrency market, Bitcoin and Ethereum, remain out of reach of Cardano for the time being - Ethereum is worth over 5 times as much as ADA, while the market cap of Bitcoin is 25 times larger than the market cap of Cardano.
The future of Cardano
For the past few years, Cardano was keeping a low profile while other cryptocurrencies enjoyed the popularity and the attention of crypto news outlets. The fact that Cardano became one of the three most valuable blockchain projects on the market changed everything. The publicity gained by Cardano might have been just what was needed to make the ADA price grow even higher.
It’s unlikely that Cardano, or any other cryptocurrency, will ever replace Bitcoin. But since the Ethereum network has been having some problems with high fees and transaction times recently, perhaps ADA could become a serious contender to take the place of ETH as the second biggest name on the crypto market.