Cardano from the beginning was supposed to be a cryptocurrency that would beat Ethereum due to its properties. Cardano also known by the acronym ADA, however, did not develop as quickly as investors wanted. Nevertheless, the project's creator Charles Hoskin believes in Cardano's network advantage over other cryptocurrencies. The cryptocurrency has a very strong community that believes in the long-term success of the project. ADA has recently introduced a number of new features signalling interest in the latest trends in the cryptocurrency world which are non-fungible tokens called NFT, the Metaverse trend and the so-called 'smart contracts' technology.
The maximum number of Cardano tokens was set at 45 billion, while 33 billion were released by November 2021. Like Bitcoin, Cardano is not an inflationary currency.
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Despite Cardano's advanced technology and potential, some investors are not happy with the pace at which the cryptocurrency is growing. However, Cardano, like Ethereum, has fundamental value as an advanced platform for building decentralized applications and a blockchain offering modern 'smart contracts'.
Currently, Bitcoin consumes about as much energy as Argentina, while Ethereum consumes about half of that, similar to the entire Czech Republic or Colombia. ADA, on the other hand, consumes as much energy as 600 American households. This is a huge advantage over other cryptocurrencies in an era of dramatically rising energy prices.
The main advantages of Cardano over Ethereum are: higher network throughput (about 250 possible transactions to process per second compared to 30 transactions in Ethereum), low transaction fees (max. a few cents compared to up to $60 in the Ethereum network), a deflationary token model (Ethereum will fully introduce one only with the 2.0 update, creating the so-called 'difficulty bomb') and greater network scalability (increasing the scale of its operation).
What is NFT and what do the latest trends bring?
The latest trends such as 'smart contracts' and NFT bring with them, first and foremost, a technology that, although currently a rather speculative creation, has a chance to stay for longer and prove itself in important areas of societies' lives.
NFT certificates have the potential to accurately and unalterably determine ownership without the possibility of any error, crime or so-called 'human factor'.
Smart contracts have the potential to become the leading form of transaction and contract execution through automation and security through encryption of the transmission. These tools also eliminate the 'trust' factor, which means that by reducing the risk of losing funds to zero, participants in a transaction can be confident that no party will be cheated. Smart contracts also eliminate intermediaries, making remittances cost-effective regardless of the scale of the contract. This gives rise to widespread use in the modern finance and clearing market, where complex documentation is often required to complete transactions.
Since the end of October 2021, many investors' eyes have been on the Metaverse trend, started by Mark Zuckerberg's marketing change of Facebook's company name to Meta Platfoms. This trend involves all the latest technologies, from Virtual Reality (VR) tools to NFT tokens to 'smart contracts' and digital asset markets that could serve as the only currencies in virtual worlds. This trend is likely to succeed, primarily due to the preferences of the new generations of the so-called 'Alpha Generation'.
What does the future hold for the project?
The Cardano project could have a great future and even overtake Ethereum if everything Hoskinson says about it comes true. The limited number of ADA tokens, the entry into the 'smart contracts' and NFT market, the growing 'Metaverse' trend, as well as the distribution of ADA blockchain technology in Third World countries could be a potential marketing catalyst for the project and result in an increase in the number of transactions made on the Cardano network in the coming years.
On the other hand, however, the project on its way could encounter serious difficulties, slowing down or even ending its development. Such risk factors include growing competition in the form of other cryptocurrencies, increased institutional interest in other projects and negative investor sentiment due to relatively lower returns on Cardano investments. However, all of this means that 'contrarian' investors may see an opportunity in the Cardano cryptocurrency as potentially highly polished and undervalued by a market following the latest trends and spectacular returns.
What about Cardano's valuation in 2022 ?
If the bull market in cryptocurrencies continues, the project's valuation is obviously likely to rise. The scale of these increases will of course be limited by the aforementioned risk factors and subsequent developments in Cardano's blockchain, as well as institutional interest. It is worth bearing in mind that cryptocurrencies smaller than Bitcoin, called altcoins, are most likely to rise in a bull market when Bitcoin's price is moving in a sideways trend.
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