Cardano (ADA 5.95%) has climbed its way up in the ranks of cryptocurrencies over the past year. This young player is now the seventh-biggest crypto by market value. Investors and users are flocking to this blockchain. Wallets for Cardano's native currency -- Ada -- recently reached a record of more than three million, according to Cardano Blockchain Insights. And Cardano nearly doubled its number of developers last year, an Electric Capital research report shows.
Clearly, this Valentine's Day, you don't have to be hit by Cupid's arrow to fall for this dynamic crypto player. Here are three reasons to love Cardano.
1. An exciting update is on the way
Transaction speed is a major focus for any blockchain aiming to reshape the way business is done. Right now, Cardano processes about 250 transactions per second (TPS). But the blockchain aims to get faster. That's where Hydra comes in. Right now, software engineers are working on this scaling solution that involves Hydra heads, or off-chain ledgers. These run parallel to the main network. A Hydra head can handle transactions between a group of participants who agree to be part of it.
Hydra testing has demonstrated that each head may process 1,000 TPS. Of course, multiple heads increase that number. So, Cardano is on track to excelling when it comes to speed. But three other measures may be even more important than TPS, according to Hydra software engineer Matthias Benkort. And those are the volume of data processed, the time to complete a transaction, and the quantity of work that can be done simultaneously. Hydra also is winning in these areas.
When can we expect a launch? It may happen as soon as this year.
2. A focus on quality
Cardano has set out a roadmap of development stages. There are five of them. And Cardano has reached the final two. Progress is being made at the same time on both of these stages. The final goal is a completely decentralized self-sustaining system. This step-by-step method is a good way to ensure quality.
But Cardano doesn't stop there. The blockchain also uses a system of peer review. That means any update for the network must first go through peer review and receive approval before being implemented. The downside is this may slow development a bit. But here's the big positive: These efforts now may avoid future glitches and outages down the road. This means Cardano is developing a system people and businesses can rely on. That could help Cardano stand out among the thousands of cryptocurrency players.
3. Multibagger potential
Today, Cardano is trading for about $1.15. And there are about 33.5 billion Ada coins circulating. If Cardano increased fivefold, market value would reach $192 billion. That would make Cardano the third biggest cryptocurrency after Bitcoin and Ethereum. So, from a coin supply and price perspective, the multibagger scenario is possible.
The multibagger scenario also is possible from a growth potential perspective. Cardano is at the start of its story. For instance, smart contract capabilities just launched this past fall. And, as I mentioned, development and scaling up are ongoing. So, there are plenty of elements that could drive gains.
As I always say, cryptocurrency is a risky industry. Don't invest more than you can afford to lose. But if you do decide to commit to an up-and-coming crypto player, Cardano might be the right match.