by Emma Newbery | Updated July 17, 2021 - First published on June 13, 2021
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Cardano is up over 1,700% since 2019, but can it go further?
If you'd bought $10,000 worth of Cardano (ADA) two years ago, it would be worth almost $190,000 today.
Two years ago, each Ada was worth $0.08554, so that $10,000 would have bought you 116,904 Ada. At the time of writing, CoinMarketCap puts the price of Ada at $1.61, so 116,904 Ada would be worth $188,216. That's an increase of over 1,700% and it makes Cardano the fifth-biggest cryptocurrency by market capitalization right now.
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Cardano is a third-generation cryptocurrency that aims to solve some of the scalability and sustainability issues faced by Bitcoin (BTC) and Ethereum (ETH).
Here are a few ways Cardano stands out.
Blockchain is like a very sophisticated database that links a series of blocks, each containing information. Many cryptocurrencies have adapted the base technology used by the two biggest cryptos, Bitcoin and Ethereum. Cardano's developers went back to the drawing board and developed a new blockchain. If you think of it like a road, rather than repaving or trying to widen the existing road, Cardano went ahead and built a whole new highway.
Cardano has taken longer to develop its blockchain solution than other cryptocurrencies. That's because each move it makes is carefully researched and checked with experts and academics before rollout.
From the outset, Cardano founder Charles Hoskinson has looked for ways that blockchain can solve issues like economic inequality. It already has a team in Africa and recently announced a partnership with the Ethiopian Ministry of Education.
Cardano is exciting, but it still has a long way to go compared with other digital currencies. Its slow and steady approach means it has only just started testing smart contracts. If all goes well, it will launch them in a few months.
Smart contracts are tiny self-executing pieces of code that can take blockchain to another level. The straightforward blockchain is like a giant ledger, which records individual transactions. For example, say Mary pays John 500 Ada. A smart contract allows both parties to include conditions. In this case, Mary might say to John, "I'll pay you 500 Ada if you mow my lawn for a year."
Cardano can process transactions much faster than Ethereum -- at a fraction of the environmental and economic cost. But Ethereum and other platforms are already using smart contract capabilities and have thousands of applications built on their networks.
That means Cardano has some catching up to do. The question is whether this eco-friendly cryptocurrency can surpass Bitcoin and Ethereum.
Cardano has set out several phases of technical development, which are being worked on simultaneously. Even so, according to Hoskinson, Cardano won't achieve its vision until at least 2025. It may launch smart contracts this year, but the crypto still has a way to go.
On one hand, that means there's still a lot of potential. Cardano's price may have already increased over 1,700% in two years, but it's only six years old. If it can compete with Ethereum or continue to launch blockchain projects in developing countries, it would not be unrealistic to think it will continue to be a serious player in years to come.
On the other hand, there's the risk that Cardano won't meet those expectations. Or that newer technology could beat it to the punch. Four years is a long time in such a new industry. And even if Cardano does achieve its potential, as an investor you need to think about the overall cryptocurrency environment and be comfortable with the risks involved. Here are a few of the main ones:
Cardano is available from many top cryptocurrency exchanges. If you do decide to buy Cardano, don't invest money you can't afford to lose. You don't want to be in a position where you can't afford to pay your rent or mortgage because you tied your cash up in crypto.
There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that's right for you, you'll need to decide what features that matter most to you.
To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and get started on your crypto journey, today.
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Emma Newbery owns Bitcoin, Ethereum, and Cardano.
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