Following a recent price boom, the little-known cryptocurrency Cardano (ADA) has risen from nowhere to become the third-largest cryptocurrency behind Bitcoin and Etherium, as blockchain fans seek more climate-friendly options.
According to the crypto website CoinMarketCap, Cardano’s price has increased by more than 36% in the last week, putting its market capitalization at $90.60 billion (€76 billion).
What is Cardano(ADA)?
Cardano is a blockchain platform with its own cryptocurrency, known as ADA.
Augusta “Ada” King, well known as Ada Lovelace, was a 19th-century British countess best renowned for her work on a theoretical calculation engine. She is the daughter of poet Lord Byron and is widely considered the first computer programmer.
Cardano was founded in 2015 by Charles Hoskinson, co-founder of Ethereum, and released in 2017. The coin has returned 7,080 percent to investors since then.
Cardano is the largest cryptocurrency to use a proof of stake blockchain mechanism, which is seen as a more environmentally friendly option.
Cardano has an advantage over Bitcoin and Ethereum as crypto aficionados become more aware of their influence on the environment, which could be one reason for its recent success.
Bitcoin’s projected annual emissions are around 57 million tonnes of CO2, according to data from Bitcoinenergyconsumption.com, which is nearly the same as a small European country’s annual carbon footprint.
Meanwhile, this summer, Iran, and China imposed temporary bans on all crypto mining because the machines used in the process were consuming too much electricity and caused power outages.
Proof of stake works by assigning coins to users at random and requiring them to put up coins as collateral. This is in contrast to the proof of work technique, which is utilized by both Bitcoin and Etherium and requires a global network of computers to be running at the same time as a transaction is made.
This strategy is intended to incentivize increased transaction processing effort, which consumes significantly more energy than proof of stake.
“We have transformed science,” Cardano claims on its website. We’ve redefined what it means to create global systems and long-term exchange and governance models.
“We, alongside our community and partners, are defining a new future: a decentralized future without intermediaries, in which power is returned to the individual”.
What are the reasons for Cardano’s success?
The cryptocurrency market has been on a tear for the past two weeks. Bitcoin and Ethereum have been at the forefront of the pricing race, but ‘altcoins,’ or rival digital currencies to Bitcoin, have also gained ground.
Cardano’s price soared when the company revealed Alonzo, a major upgrade set to deploy in September.
Smart contracts will be introduced to the blockchain by Alonzo. Smart contracts are blockchain-based programs that execute when certain criteria are met. They’re normally used to automate the execution of a contract, and they’ll allow Cardano to implement its own smart contracts and open the road for its own decentralized applications (dApps).
Another reason for Cardano’s rise is that starting August 25, its coin will be listed on a Japanese exchange after being approved by the country, which is known for having some of the harshest market entry requirements.
It implies that Cardano’s ADA will be tested alongside the likes of Bitcoin, Ethereum, and Litecoin in Japan.