To answer this question, we first have to take a short trip through time.
In 2009, a mysterious entity called Satoshi Nakamoto shook things up when they introduced cryptocurrency, Blockchain, and Bitcoin (BTC).
Today, Bitcoin is famous as a store of value by being the first cryptocurrency and its singular design.
Years later, in 2015, Ethereum came onto the scene and offered a great new feature – smart contracts. This feature allows fast-tracking of digital payments and automatically executing agreements when some specific conditions are met.
Cardano has grown over time to become an important blockchain alternative to Bitcoin and Ethereum.
In this article, I explain what you need to know about Cardano, how it works, how to buy Cardano in the United States and Canada, and how to store it.
What Is Cardano and What Sets it Apart From The Rest?
Cardano is a public and decentralized blockchain used to build and run smart contracts and other protocols. Hoskinson co-founded Cardano in 2014 with his former colleague at Ethereum, Jerry Wood.
While Hoskinson and Wood were the brains behind Cardano, they do not operate or own the Cardano blockchain. The stakeholders include:
- Cardano foundation
Hoskinson launched the Cardano platform and its native currency Ada in 2015 and launched Cardano in the same year, and the Ada token later in 2017.
Ada was named after Ada Lovelace, an English 19th-century countess, a prolific mathematician, and the first computer programmer.
How Cardano Works and Why it is Unique
The core of any blockchain is the algorithm it uses to validate transactions and create blocks. Cardano runs on an algorithm called Ouroboros, which mines blocks using proof-of-stake (PoS) protocol.
The PoS reduces energy expenditure during block production by eliminating any need for significant computing resources or hash power, which are central to the PoW (Proof of Work) algorithm in Bitcoin.
The Cardano blockchain is made up of two components.
The CSL (Cardano Settlement Layer) is the accounting unit, and this is where holders send or receive ADA immediately and with zero transaction fees. The CCL (Cardano Computational Layer) is a protocol that acts as the blockchain’s spine.
It assists in tasks like running smart contracts, ensuring security, and allowing other functionalities like identity recognition and blocklisting.
The Cardano developers use Haskell, a secure and renowned programming language, to write the open-source code.
The Cardano coin ADA is used to transfer value the same way fiat money is used. This is similar to other cryptocurrencies, but ADA can be used for other things too.
One of Cardano’s fundamental principles is the PoS protocol, where you stake ADA to the blockchain that allows Cardano stake pool operators to verify their transactions.
If you stake your ADA, you get more Cardano Crypto, which helps to maintain blockchain security.
ADA can also be used to vote. In Cardano, the miners do not vote or make protocol changes. The token holders do.
Cardano owners use their ADA to vote on the proposals if a new change is proposed to the blockchain. This ensures that every person who owns the Cardano currency has a voice in its development.
In the future, ADA will help power the intelligent contract platform. Developers will use ADA for creating intelligent applications and contracts that will run on the decentralized and secure Cardano blockchain.
If Cardano did not have a native coin, these contracts would be impossible to execute.
How Many ADAs are in Circulation?
The ADA coin ranks fifth globally after the other cryptocurrencies.
The maximum supply of ADA coins is approximately 45 billion. However, the circulating supply stands at around 31 billion.
Between September 2015 and January 1017, there have been five rounds of Cardano tokens public sales.
When the network launched, 2.5 billion was allocated to IOHK. Emurgo, an international blockchain tech company founded for Cardano protocol, got the other 2.1 billion. The Cardano Foundation, a Not-for-profit entity, received 648 million ADA to promote the platform and improve adoption.
In all, 16% of the total supply of ADA went to the founders, and the rest was shared among the investors.
Cardano’s price prediction has been going up since the end of July 2021. ADA has quickly gained 40% as the crypto markets revive following a slump in the Spring.
The Cardano blockchain has been going through some upgrades to add new functionalities such as native tokens, assets, and smart contracts this year.
How To Buy Cardano
Crypto-investors who are looking for long-term projects. If you are interested, here are a few steps on how and where to buy Cardano.
1. Find a Crypto Exchange
You have to start by looking for a crypto exchange. Luckily as the fifth largest coin, most exchanges have it listed. Some of the crypto exchanges in the US that list Cardano include:
The top considerations in an exchange are reasonable fees and security. Coinbase is very user-friendly and great for beginners.
2. Sign Up
When you decide to trade in crypto, you need to sign up for an account at the crypto exchange.
The process varies depending on the exchange, but the majority have buttons indicating “Sign up,” “Register,” or “Get Started.” They will typically ask for your Full Name, Phone number, and Email Address.
You may need to set up the two-factor or multi-factor authentication security detail. This feature means you have to sign in twice, with your standard passcode and an OTP (One Time Password) sent to your phone or email.
3. Identity Verification
After creating your account, you are required to verify your identity. The process depends on which exchange you choose, but typically, you will provide the following:
- Date of birth
- Social Security number
- A scan of a valid ID, such as a driver’s license or passport
- Physical address
In most cases, the verification process occurs automatically, however, you may sometimes be asked to provide further documentation if manual verification is needed.
4. Have a Strategy
Treat the investment as a long-term investment. Plan your investment by knowing how much to invest, how often you plan to buy more Cardano, etc.
For instance, you could choose to buy Cardano worth $50 per month and hold on to it for a specific period. You may sell if the price goes up or HODL.
5. How To Pay
Check the methods accepted by the crypto exchange and the fees charged per method. The most common methods are:
- Debit cards
- Credit cards
- ACH bank transfer
- Electronic Funds Transfer
- Interac e-Transfers (Canada)
Most exchanges allow bank deposits for free. You will be charged for the transaction when you buy the crypto, but it is cheaper. You pay more with credit, debit cards, or PayPal, and some bank transfers may take several business days.
With the money in your exchange account, you can decide how much you want to purchase Cardano.
After purchase, move your investment to your Cardano crypto wallet. Crypto wallets give you more security and are popular with investors looking to protect their coins.
Cardano and Ethereum Comparison
The primary use case of Cardano is allowing you to carry out transactions in the native ADA. It also allows developers to build decentralized apps powered by ADA.
One difference between Cardano and other currencies is that its design is research-driven and its code mathematically verified.
Cardano is not released all at once, instead, it is done in phases. Since 2017, it has had five upgrades, such as Byron, which enabled ADA’s transfer, and Voltaire, which launched a new model that people can use to fund their software developmental changes.
Ethereum’s design has become an open-source, international platform for custom assets like Non-fungible assets (NFT)and other applications. The founders’ intention was for it to use blockchain to decentralize services and products.
Ethereum has a novel phase known as DeFi or decentralized applications (Dapps). This phase was meant for automating financial services such as lending and borrowing, eliminating the need for an intermediary such as a conventional bank.
Best Crypto Wallets for Cardano
Some of the best Crypto wallets for Cardano include:
- Binance: Offers a platform that allows you to trade over one hundred and fifty cryptocurrencies. It also provides uses with an API for integrating all your trading apps.
- Coinbase: Coinbase is one of the top Crypto wallets you can use to buy, sell, transfer or store your digital assets. It is secure and stores various types of digital assets offline and is available in over 100 countries.
- Gemini: Very secure Cardano crypto wallet that enables you to legitimize your crypto globally.
- Kraken: Offers users stability by always having total reserves and some of the best legal compliance levels.
- Trezor: Helps users store their ADA coins offline, and you can plug them into your phone or computer. It uses randomly generated pin codes that secure your device.
Many of these wallets are all compatible with Android and iOS devices.
Is Cardano a good investment?
Cardano has been dubbed the “Ethereum Killer,” and with fairly good reason. It is among the top apps in the blockchain environment.
While it may not kill Ethereum, it will build its name and niche in the blockchain space, making it an excellent investment to put your money on.
Cardano is an excellent investment choice, but ultimately, you must be cautious in all investment matters.
Never invest money you are not ready to lose, mainly because the crypto ecosystem is very volatile, and you can either make a lot of money or vice versa.