First, we had Bitcoin – not an Altcoin, and after that, Ethereum. Then, there’s the one that deserves the third spot – Cardano coin or ADA.
Breaking these coins down, think of Bitcoin as a first-generation coin, Ethereum as a second-generation coin, and ADA as a third-generation cryptocurrency.
Bitcoin was a proof of concept that cryptocurrency could be done and was a massive success. Ethereum wanted to improve on that with the idea of smart contracts, making cryptocurrency more useful, as you could pay people and have a contractual agreement on how the money went around. In short, it added more context and meta data to transactions.
ADA, the third generation, goes beyond smart contracts. This is where it really comes all together, as ADA favors scalability. Scalability is very important – for example, if you look at Bitcoin, it's almost becoming dated already, as it only can manage 7 transactions per second.
An even bigger problem is that it cannot be improved. It's hard to change, as much of its processes are already set in stone. That's the main problem with Bitcoin, but there are even similar problems with Ethereum. Both of these coins have gotten ahead of themselves without building a solid foundation, which is extremely important if these cryptocurrencies are going to be as big as we think they will be in the future.
The Future of Cryptocurrency
The people behind Cardano are top notch, and that's increasingly important with the influx of both legitimate and fraudulent cryptocurrency going around.
The Cardano have invested a lot of time breaking down their platform via the array of TedX talks they've made. This information has been vital in putting people at ease.
In fact, the CEO of Cardano started at Ethereum as one of the lead engineers and computer scientists. He's identifying the problems that have been with Ethereum and has moved on to the Cardano project to really learn from those mistakes and take Cardano to the next level.
A lot of people are calling Cardano superior to Ethereum, and that's not all that far from the truth. As a technology, it offers more than Bitcoin. A lot of people believe Bitcoin is the best cryptocurrency out because of its value when in actuality, it only has so much worth because it is the first and biggest cryptocurrency.
There are better technologies and smaller coins that may in the future knock some of these big guys off. Popularity is important and that’s what's driving the price of Bitcoin and Ethereum through the roof, but equally important is the foundation that something could handle that popularity.
Cardano is here to stay – they have the funding and the contract set out in the future to continue to develop, as well as the knowledge to make considerable improvements.
What Exactly Is Cardano Coin?
The following is a little more in-depth information about Cardano, what Generation 3 is going to entail, and why it is going to be such a game changer. Here are some things that you should know about Cardano:
- There are three entities under the Cardano project. The Cardano foundation, IOHK (Input Output Hong Kong) and Emergo
- Each of these tackles a different project, delegating jobs and using their resources for what’s needed
- The Cardano foundation sets the rules, ideas and has relations with the government, dictating how things are going to look
- IOHK are the main engineering firm behind the protocol and the blockchain
- Emergo is responsible for all the developers, further progression and uses of Cardano
Some keywords that are really important in setting apart third-generation cryptocurrency from its predecessors are ‘scalable’ and ‘sustainable.’
Cardano has room to grow, and this is just beginning. As it gets bigger, the scalability increases along with it. You don’t have to throw more resources at it to scale it either. The way Cardano is set up, it actually scales organically when it has more participants involved.
Without getting too technical, you can think of this first and foremost as how many transactions per second it can handle. Bitcoin can do seven, Ethereum a couple dozen.
But right now, Cardano is already developed enough to handle as many transactions as there are participants, and as it grows, the capacity to handle these transactions grows with it.
Some developers have also touched on the bandwidth necessary, data storage and also whether you have to trim down unnecessary processes to make it more manageable, all of which seem to be getting better.
The Sustainability of Cardano Coin
On the topic of sustainability, we’re already seeing how Bitcoin and Ethereum have found themselves with certain problems, as well as how solutions are developing for Cardano.
The main goal is to build something that's future-proof, upgradable and something that can have technology added to it down the line.
Cardano coin was able to get started with its first layer, but that was just the first of many layers of improvements being made in order for it to be sustainable. Cardano also has a great idea about sustainability that starts with the question of how cryptocurrencies are going to print money or sustain themselves going forward.
In the United States government, it would be a treasury that has the authority to print money. What they've thought of with Cardano is having a digital treasury – when the Cardano is mined, which is different than mining for Bitcoin (proof of work versus proof of stake, which we'll get into later) a portion of that mining will go into a treasury.
This is a reserve for when things need to be executed, and it's ingenious this treasury is going to work, using principles and ideas of modern-day democracy, possibly being able to be a direct democracy.
This also has another useful application in that when a topic comes up, a ballot can be submitted and everybody is able to vote on it because of it being held digitally. The people involved will be stakeholders who own shares of Cardano.
In essence, this makes Cardano a living thing that progresses, gets smarter and really develops with the best interests of its shareholders/stakeholders, meaning everybody is represented.
Scalability for Cardano Coin
One more way to put scalability into context is Bitcoin. All of the money and resources that it takes to sustain continuing leisure and mining Bitcoin is huge. Hundreds of thousands of dollars are being spent every hour on resources.
On the other hand, Cardano is going to be particularly scalable because it does not use the idea of proof of work, but rather it uses a proof of stake idea instead.
Proof of stake works by having a random selection awarding the next block of the chain to be mined – this is based on your stake on a particular node. Probability is based on this, but it's a forward-thinking solution to a really prominent issue that Bitcoin and Ethereum have.
The last focal point we should mention is practicality.
The team behind Cardano is practical about what they hope to achieve. They don't believe that all of these government currencies are just going to disappear and that cryptocurrencies are going to take over the world. They're open to working with governments to find out ways companies could possibly integrate and work together with Cardano.
This in itself is really practical. Another way that they're taking steps forward is considering other blockchains. They understand that it's more realistic that Cardano is not going to be the only one cryptocurrency forging new ground in the mainstream, so they're working on integrating with other cryptocurrencies.
In fact, they’re starting from the ground up to be able to understand other protocols in these other blockchains, to really be able to move money between them in a better fashion. The technology that IOHK has developed is called Ouroboros, and it's the protocol used in the blockchain. Ouroboros is similar to the SHA256 of Bitcoin, but it's a lot better.
It’s based on the proof of stake mentioned before, which is the biggest difference, and that alone sums up what it’s capable of. If nothing else, that is why this is so much of a better solution than that Bitcoin.
Is Cardano Coin the Future?
Cardano coin is the most viable for the future, and the number of positives it's bringing to the table leaves us with a good reason as to why it should excel in the future.
Ultimately, Cardano is a smaller coin, but it has so much room to grow – it’s lesser known, but the potential is truly phenomenal. It's been gaining so much traction and attention, and it's only going to go further from here.