Cardano needs to alter the world … It might take some time – InvestorPlace
Cardano (CCC:ADA-USD) has a much broader goal than simply using the blockchain to decentralize transactions. She wants to change the world – luckily in a good way.
If you go to their website, you will read a lot of high-minded ambition and that is certainly much better than naked greed, especially in the financial markets. And it has actually built platforms and operates divisions trying to build the financial world it hopes to reach.
The challenge is in scale.
And competing cryptos who are in for nothing but self-promotion or the desire to increase the value of their cryptos faster and bigger than anyone else.
But scaling is the real challenge with all cryptos. They are like a sandbox for developers in which ideas are played with and new theories are tested. All crypto websites tend to be vague about real-world results, aside from building a decentralized financial (DeFi) solution for the current system where everything has to go through a bank or financial services company.
Cardano has good intentions
Don’t get me wrong, I think Cardano has good intentions. But you know the saying about what the road to hell is paved with.
I’m glad people are thinking beyond the stale box of our current financial system. But this experiment won’t change financial systems overnight. There are many powerful financial firms and government organizations just figuring out how Cryptos in particular, and DeFi in general, can work to their advantage.
Do you also have consumers who rarely switch banks and the goal here is for them to switch currencies? That’s quite a jump for the majority of the population.
What can I do with it?
The other problem is practicality. Is Cardano practical? Well, if you set up your account so that you delegate your share to a group that funds schools in Ethiopia then that is certainly more productive than many uses of your capital.
But can you buy a gallon of milk? Theoretically yes. But the problem is that the price of a gallon of milk is high everywhere on any given day or week.
In countries with hyperinflation, most prices are written on blackboards because the exchange rate of the currency fluctuates so sharply and quickly. Given this reality, consumers in these economies are not saving money as it is likely to be worth much less in the days to come. It’s not a safe currency.
That’s my problem with all cryptos and tokens today, and I’ve been into Bitcoin and the crypto movement since 2014. They certainly trade in vehicles, but their value is locked in their technology, nothing more.
It is like having derivatives that have no underlying value other than what is implied by the demand for the derivatives.
Do not get me wrong
Even so, I think the concept of cryptos like Cardano shows the potential for what cryptos and DeFi could bring to the global financial system.
And Cardano is doing some really innovative things. I applaud his imagination and his efforts to empower individuals in financial transactions and make their collective financial strength work more to their advantage than to the financial institutions.
The big challenge is that the crypto market is fragmented. And if the nature of decentralized currencies does not allow this to be better organized, it will be very difficult for Cardano and others to lay the foundation on which to make its vision a global reality.
January 1, 2021, Cardano traded for 17 cents. Today it’s around $ 1.59. That’s around 773% in six months. And nothing material has changed with the company or the currency to explain this. And that is the same for many cryptos.
This market is too young and volatile for any real money. However, if you have some venture capital and want to set up a crypto account, Cardano has a vision that is worth buying into.
Disclosure: At the time of publication, GS Early had no positions (either directly or indirectly) in any of the securities discussed in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines.
GS early has been an award-winning financial journalist and editor for nearly three decades and has worked with many of the leading financial writers and publishers during that time. He has seen a lot and heard a lot.