With a market cap of over $90 billion, Cardano has supplanted Binance Coin and Tether as the third largest cryptocurrency after Bitcoin and Ethereum.
It has been described (along with Polkadot) as the “Ethereum Killer” due to its alleged ability to do what Ethereum can do, only better.
As the table below shows, Cardano has delivered extraordinary gains over 12 months compared to most other assets, including cryptos.
If you had invested R1,000 in Cardano a year ago, today it would be worth more than R21 000, making it multiples higher than the returns of Bitcoin, Ethereum and the stock market.
Cardano is up 115% since early August in anticipation of a major upgrade next month, known as Alonzo, which will allow writing self-actualizing smart contracts on its blockchain (a detailed ledger that records and validates transactions).
Cardano is promoted by some as a rival to Ethereum and a platform that will revolutionize the way we transact and do business, mainly by eliminating agents and intermediaries (such as banks, exchanges and insurance agents).
Return on investment of R1,000 in various assets over 12 months:
So, what exactly is Cardano, and why is there so much buzz around it? 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 house a large number of applications in a secure and sustainable way. Proof-of-stake (PoS) is a modification of the Proof-of-work (PoW) model that Bitcoin uses. Rather than relying on computers racing to mine the block, the idea behind a PoS protocol is that participation is determined by ownership of the coin supply you bet on the network. Users who wish to have the option of being selected to add blocks to a PoS blockchain must wager a certain amount of the blockchain’s cryptocurrency in a special contract. The number of coins wagered determines their chances of being selected as the next block producer. But if users behave maliciously, they may lose their bet as a punishment.
PoS is the future of blockchain technology, the main advantage being the ability to scale quickly without using huge amounts of electricity – as is the case with the original Bitcoin blockchain.
What’s interesting about Cardano is that it was started in 2015 by Charles Hoskinson, one of the co-founders of Ethereum, with the express purpose of solving some of the major problems with Ethereum, such as poor scalability and network congestion, resulting in high ‘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 methodologies. In September, it would be enabled for smart contract functionality. Smart contracts are pieces of computer code that allow people to securely transact in a ‘trusted’ environment. For example, you can already borrow money at relatively low interest rates on decentralized financing applications (DeFi) with your crypto assets as collateral. No credit check by a bank teller, no KYC (Know Your Customer) obligations and in many cases you are not even asked for your name.
That’s just one use of smart contracts. Think of insurance and financial products that eliminate the middleman and save costs, or supply chain management, where payment for delivery of a shipment of goods is linked to meeting certain conditions, such as delivery of the goods of a certain quality on an agreed date. .
Is there a business case behind Cardano?
BHR: There is a promise of a business case, but Cardano has yet to deliver on milestones such as smart contracts. That means it hasn’t yielded any meaningful use cases yet, other than being a transfer of value. Cardano’s (ADA) price is moving more on hype than fact. If Cardano delivers its smart contract functionality, the price is likely justified and it could go to greater heights. If not, we may see a price drop. The fact that it is a strong competitor to Ethereum means that it can be argued to be included in a crypto portfolio.
Where can I buy Cardano and why should I own it?
BHR: As of Friday (August 27), Cardano will be on sale as a standalone cryptocurrency at Revix. The launch of Cardano as a standalone cryptocurrency is the result of overwhelming demand from our customers.
Due to the new release, Revix is offering a twofold promotion:
- If you buy Cardano in the next week (August 27 to September 2) with ZAR or GBP, your purchases will be free.
- The first 600 new signups to the Revix platform will receive double their first deposit up to R500 when using the promo code: DOUBLEUP – this promotion is valid from August 17 to 31, 2021.
There are a number of reasons why you might want to buy Cardano, but the two main reasons are that it tries to solve scalability and high cost in the smart contract space. Second, it tries to solve blockchain energy consumption by relying on much 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 standalone cryptocurrencies. And we offer a USDC savings vault similar to that of a savings account.
These bundles allow you to own an equally weighted basket of the world’s largest and, by default, most successful cryptocurrencies.
The Top 10 Bundle evenly spreads your investment across the top 10 cryptocurrencies measured by market capitalization, the Smart Contract Bundle evenly spreads your investment across the Top 5 smart contract cryptocurrencies, and the Payments Bundle spreads your investment equally across the Top 5 cryptocurrencies focused on payments – giving you a balanced exposure to these crypto sectors.
Revix brings simplicity, confidence and great customer service to investing. The easy-to-use online platform allows anyone to securely own the world’s best investments with just a few clicks. Revix guides new customers through the signup process to their first deposit and investment. Once set up, most customers manage their own portfolio, but have access to support from the Revix team at any time.
For more information, visit www.revix.com
This article is for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor a solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose and before investing you should consider your level of experience and your investment objectives and seek independent financial advice if necessary.
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