With a market capitalization of more than $ 90 billion, Cardano has ousted Binance Coin and Tether as the third largest cryptocurrency after Bitcoin and Ethereum.
It (along with Polkadot) has been described as an “Ethereum killer” because of its supposed ability to do what Ethereum can do, only better.
As the table below shows, Cardano has seen exceptional gains over 12 months compared to most other assets including cryptos.
If you had invested R1,000 in Cardano a year ago, it would be worth more than R21,000 today, which is many times higher than the returns on Bitcoin, Ethereum and the stock market.
Cardano is up 115% since the beginning of August, in anticipation of a major upgrade next month known as Alonzo, which will allow self-actualizing smart contracts to be written to its blockchain (a detailed ledger that records and validates transactions).
Cardano is touted by some as a rival to Ethereum and a platform that will revolutionize the way we do and conduct business, essentially by eliminating agents and intermediaries (like banks, exchanges and insurance agents).
Returns after investing R1 000 in various assets over 12 months:
So what exactly is Cardano and why is there so much buzz? We asked Brett Hope Robertson (BHR), Investment Analyst at Revix, to clear up some of the confusion and misunderstanding surrounding crypto.
What is Cardano?
BHR: Cardano is a proof-of-stake blockchain platform designed to support a wide variety of applications in a secure and sustainable manner. Proof-of-Stake (PoS) is a modification of the Proof-of-Work (PoW) model that Bitcoin uses. Rather than relying on computers to break down the block, the idea behind a PoS protocol is that participation is determined by ownership of the coin supply you deploy on the network. Users who wish to be able to add blocks to a PoS blockchain must use a certain amount of the blockchain’s cryptocurrency in a special contract. The amount of coins wagered determines your chances of being selected as the next block producer. However, if users behave maliciously, they can lose their stake as a penalty.
PoS is the future of blockchain technology, the main advantage of which is that it can scale quickly without consuming large amounts of electricity – as was the case with the original Bitcoin blockchain.
What’s interesting about Cardano is that it was founded in 2015 by Charles Hoskinson, one of the co-founders of Ethereum, with the express goal of solving some of the key issues identified with Ethereum – such as “gas” fees.
How does Cardano work and what does it do?
BHR: Cardano was the first blockchain technology based on peer-reviewed research and evidence-based methodology. It should be activated for smart contract functionality in September. Smart contracts are pieces of computer code that enable people to trade securely in a “trustworthy” environment. For example, you can already borrow money at relatively low interest rates for decentralized financial (DeFi) applications by using your crypto assets as collateral. No credit check by a bank employee, no KYC (Know Your Customer) obligations and in many cases you won’t even be asked for your name.
This is just one application of smart contracts. Think of insurance and financial products that eliminate the intermediary and save costs, or of supply chain management, in which the payment for the delivery of a consignment of goods is linked to the fulfillment of certain conditions, e.g. certain quality on an agreed date.
Is there a business case behind Cardano?
BHR: A business case is promised, but Cardano has not yet reached any milestones such as smart contracts. This means that it does not yet have to provide any meaningful use cases that are not a transfer of value. The Cardano (ADA) Prize is driven by more hype than facts. If Cardano delivers its smart contract functionality, the price is likely justified and could hit higher highs. If it doesn’t, we could see prices decline. The fact that it is a strong competitor to Ethereum means it can be included in a crypto portfolio.
Where can I buy Cardano and why should I own it?
BHR: From Friday (August 27th) Cardano can be purchased as an independent crypto currency from Revix. The introduction of Cardano as an independent cryptocurrency is due to the overwhelming demand from our customers.
Due to the new version, Revix offers a twofold action:
- If you buy Cardano in the next week (August 27th to September 2nd) with ZAR or GBP, your purchases will be free of charge.
- The first 600 new registrations on the Revix platform receive double their first deposit up to R500 when using the promo code DOUBLEUP – this promotion is valid from August 17th to 31st, 2021.
There are a few reasons you might want to buy Cardano, but the main two are because it tries to solve the scalability and high fees associated with smart contracts. Second, it tries to solve the blockchain’s energy consumption problem by relying on significantly less energy to secure the network.
What else does Revix offer?
At Revix we now offer Bitcoin, Ethereum, Uniswap, PAX Gold, USDC and Cardano as independent cryptocurrencies. And we offer a USDC Savings Vault, similar to a savings account.
You can also access the ready-made “crypto bundles” via Revix.
These bundles enable you to own an equally weighted basket of the world’s largest and most successful cryptocurrencies by default.
The top 10 bundle distributes your investment evenly across the 10 largest cryptocurrencies measured by market capitalization, the smart contract bundle distributes your investment evenly across the top 5 smart contract cryptocurrencies and the payments bundle distributes your investment evenly across the top 5 cryptocurrencies that we use Focus Payments – gives you a balanced exposure to these crypto sectors.
Revix brings simplicity, trust and great customer service to investing. The easy-to-use online platform allows anyone to securely own the best investments in the world with just a few clicks. Revix guides new customers through the registration process through to their first deposit and first investment. Once set up, most customers manage their own portfolio, but can always access the support of the Revix team.
For more information, please visit www.revix.com
This article is for informational purposes only. The views expressed are and should not be construed as investment advice or recommendation. This article is not an offer or a solicitation of an offer to buy or sell any of the assets or securities referred to herein. You should not invest more than you can afford to lose and, before investing, please consider your level of experience and investment goals, and seek independent financial advice if necessary.
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