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Should You Invest in Cardano? | Cryptocurrency

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Cardano has long been hailed as a potential “Ethereum killer”.

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That is definitely the claim. After all, Ethereum – the name of the blockchain platform itself is often used synonymously with its native cryptocurrency token Ether (ETH) – is the second most valuable cryptocurrency project on the market, just behind Bitcoin (BTC). Yet even if Ethereum tries to overtake Bitcoin, it has a newer rival trying to take its place.

Bitcoin is still firmly entrenched as the largest crypto asset, largely because it is the oldest and best known of the group. However, Ethereum has gained market share in cryptocurrency because of its compelling integrated applications. That is one area where Bitcoin is missing.

Cardano tries to surpass both as it offers the best of both worlds. It solves Bitcoin’s excessive energy consumption problem while challenging Ethereum’s fascinating smart contracts. What investors should know:

  • What is Cardano?
  • Cardano’s mission for more efficiency.
  • The advantages of Ethereum.
  • How to invest in Cardano.

What is Cardano?

Cardano is a blockchain platform based around Ouroboros.

Ouroboros is a groundbreaking proof-of-stake protocol that instantly sets Cardano apart from previously invented cryptocurrencies that rely on proof-of-work protocols instead. That difference is key to Cardano’s value proposition.

For the sake of clarity, it’s also important to note that Cardano is the name of the blockchain platform, while ADA is the name of their native cryptocurrency token. Cardano’s ADA token, on the other hand, takes its name from the mathematician Ada Lovelace.

Cardano deserves all of its comparisons to Ethereum. For one, Cardano’s founder Charles Hoskinson was a co-founder of Ethereum. However, he had an argument with Ethereum’s key person, Vitalik Buterin. Hoskinson wanted to take Ethereum in a more commercial direction and accept venture capital. Other Ethereum founders wanted to take a less business-oriented approach.

After leaving Ethereum, Hoskinson decided to improve Ethereum with his own cryptocurrency project. Hoskinson’s invention would retain many of Ethereum’s attractive features but make up for some of its weaknesses.

Cardano strives to offer many of Ethereum’s most compelling features, such as: B. Robust Smart Contracts. Meanwhile, from day one, Hoskinson designed Cardano to be energy efficient and support fast transactions with minimal transaction fees. In addition, Cardano has another great advantage for hard money enthusiasts. It has a strict cap of 45 billion coins outstanding compared to Ethereum, which has no absolute limit on its total supply.

Cardano was pretty successful. It is currently the fifth largest cryptocurrency by market capitalization. The programming community for Cardano is active, and the project has generated particular interest in 2021 as the environmental impact of crypto dominates the discussion.

Cardano’s mission: more efficiency

The big advantage for Cardano is the demand for energy efficiency.

According to Marie Tatibouet, Chief Marketing Officer of the leading cryptocurrency exchange Gate.io, Cardano’s Ouroboros proof-of-stake algorithm is 20,000 times more efficient than Bitcoin’s mining system. When it comes to energy consumption, Cardano’s biggest competitor is Ethereum. As things stand, Ethereum is not very energy efficient. However, Ethereum plans to move to a proof-of-stake algorithm like Cardano, which would significantly improve its own position.

Bitcoin and many other traditional cryptocurrencies use a proof-of-work protocol. This is where miners use powerful graphics cards or specialized computer rigs to guess complicated math puzzles. Those with more computing power win more puzzles and thus receive more of the mining reward.

What is the difference between the proof-of-stake? Howard Poston, a writer for cybersecurity education company Infosec, explains that the proof-of-stake bypasses the computationally intensive mining process.

“The proof-of-stake uses its cryptocurrency as a scarce commodity. As with putting money in a CD or stocks, stakers promise not to spend their money creating blocks and earning block rewards. The likelihood of being selected for creating a particular block is roughly proportional to the percentage of the total stake that the user controls, “says Poston.

Instead of having to spend huge amounts of computing power and environmental resources on maintaining the blockchain, proof-of-stake protocols can use a miner’s tokens as security that makes the system work. Cardano’s Ouroboros was novel in that it was one of the first successful proof-of-stake protocols that was a realistic alternative to proof-of-work tokens. The proof-of-stake has become so fascinating that even Ethereum could switch to it in the coming months.

Why don’t all cryptocurrencies use a proof-of-stake model? One problem is that these systems can over-concentrate ownership. “Proof-of-stake has problems like the proof-of-stake time bomb. The user with the most deployed cryptocurrency will build the most blocks and get the most block rewards. If they keep reinvesting those profits, they’ll have an ever-growing one Percentage of participation and could eventually control the entire participation, “says Poston.

This goes against the ethos of the cryptocurrency community regarding distributed authority. Another topic is the so-called “nothing at stake”. This makes it easier for users to pollute the blockchain with double votes and other such inaccurate information as it is less penalized than in a traditional proof-of-work ecosystem such as Bitcoin uses. Some purists insist that without proof-of-work, cryptocurrency will not solve many of the decentralization problems it should be addressed with.

However, with numbers like Tesla (Ticker: TSLA) CEO Elon Musk bringing energy concerns to the fore, the proof-of-stake has just received a large round of free advertising. And Cardano’s Ouroboros looks like one of the most compelling proof-of-stake options available.

The remaining benefits of Ethereum

While Cardano has numerous technical advantages, it can still be a loser overall.

That’s because Ethereum has several key advantages, according to Jahon Jamali, co-founder and chief marketing officer of Sarson Funds.

“Ethereum has a considerable first mover advantage over Cardano. While Cardano’s focus on science and nonprofits has become its hallmark, it can be argued that a lack of private sector engagement has limited the scope of market-driven use cases – not a large decentralized app of importance built on top of ADA, Jamali said.

Several experts pointed out the technical difficulties involved in programming for Cardano as opposed to Ethereum. The simplicity of Ethereum has made it possible to achieve real mass market acceptance. “Cardano may have some technological advantages, but Ethereum is the only blockchain that is truly enterprise-grade, boasting supporters like Accenture, FedEx, JP Morgan Chase and Microsoft – all members of the Enterprise Ethereum Alliance,” said Jamali.

Cardano promises a robust smart contract environment that will compete with Ethereum’s decentralized financial platform or DeFi platform. However, Cardano is not yet in the Ethereum league.

“When it comes to smart contracts, Ethereum is obviously ahead of the game for the time being. Ethereum has an enviable developer community and has built the multi-billion dollar DeFi and Non-fungible Token (NFT) ecosystems. Cardano, on the other hand, still has not yet fully integrated smart contracts. With the Alonzo Blue upgrade, you have initiated the process of smart contract integration. It remains to be seen whether these contracts can be properly implemented in the real world, “says Tatibouet.

Although Cardano may have superior technical specifications, in practice it needs to gain more utility and acceptance before it can overtake Ethereum.

How to invest in Cardano

It’s not difficult to invest in for people who believe in Cardano’s technological advantages.

The ADA token is listed on many major crypto exchanges and has enormous liquidity and an enormous trading volume. Coinbase Global (COIN) added support for Cardano in March of this year and gave the project high-profile validation. In addition to Coinbase, Cardano is traded heavily on Binance, Kraken and Gate.io, among others.

Cardano’s price has been volatile both this year and in the past. Potential investors should be aware of this and view Cardano as part of a more diversified cryptocurrency portfolio. However, a Cardano investment could make a lot of sense as it has a real chance of taking some of the business off Ethereum. “Cardano can use Ethereum’s inflated gas fees to eventually carve out a niche for itself,” says Tatibouet.

Cardano may not be an overnight success, but it has enough merit to remain a high-profile competitor in the crypto space.

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Crypto retreats as bitcoin and ethereum lead mild sell-off

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Bitcon and Ethereum prices fell 4% on Friday. Photo: Yuriko Nakao / Getty Images

The cryptocurrency market saw a small sell-off on Friday morning, with Bitcoin (BTC-USD) and Ethereum (ETH-USD), the world’s first and second largest coins, down around 4%.

Bitcoin, currently trading at $ 37,866 (£ 27,259), hit levels of $ 41,330 on June 15, a key resistance area of ​​$ 41,250, but has continued to decline since then.

This week it was rocked by an announcement by the US Federal Reserve that it could hike rates through the end of 2023. Assets deemed risky, such as certain stocks and crypto, have also been weighed down by ongoing fears that the Fed may unwind its bond purchase program earlier than expected.

Bitcoin has been in decline for the past few days.  Chart: Yahoo Finance

Bitcoin has been in decline for the past few days. Chart: Yahoo Finance

On Thursday, the World Bank also rejected a request from El Salvador to help introduce Bitcoin as legal tender.

The bank said it could not support El Salvador’s plans due to the environmental impact of Bitcoin mining and the transparency drawbacks.

It came when the UK’s Financial Conduct Authority (FCA) reiterated its warning that people “should be ready to lose all their money” when investing in cryptocurrencies.

The regulator estimates that 2.3 million adults in the UK now own crypto assets, up from 1.9 million last year, with more and more people viewing them as either a complement or an alternative to mainstream investments.

Enthusiasm for crypto assets is also growing. More than half of crypto users said they have had positive experiences so far and are likely to buy more, from 41% to 53%, according to the FCA. Fewer people also regret buying cryptocurrencies, from 15% to 11%.

Sheldon Mills, FCA’s Executive Director, Consumer and Competition, said, “The market has continued to grow and some investors have benefited from rising prices.

Watch: What is Bitcoin?

“However, it is important that customers understand that if something goes wrong, they will likely not have access to the FSCS or the Financial Ombudsman Service as these products are largely unregulated.

The story goes on

Cryptos have recently been empowered with institutional support. Several organizations, including MicroStrategy (MSTR), have invested billions of dollars in cryptocurrencies, and traditional financial firms like PayPal (PYPL) and Goldman Sachs (GS) have started managing the asset on behalf of customers.

“While things may seem calm to the inexperienced, behind the scenes activity is still strong,” said Paolo Ardoino, CTO at Bitfinex. “Options markets are buzzing while institutions test strategies.”

He added, “Bitcoin has become an integral part of some of the most diverse portfolios around the world. Long-term private investors ride the wave. The builders of Bitcoin keep building. The first Bitcoin upgrade in four years has been approved and will take effect in November. The developers are working in anticipation of the upgrade. The community continues to improve the global financial networks. “

However, according to a survey by Bank of America, 81% of fund managers say Bitcoin is still a bubble.

View: What are the risks of investing in cryptocurrency?

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bitcoin price: Top cryptocurrency prices today: Ethereum, Polkadot, Uniswap down up to 6%

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NEW DELHI: Major cryptocurrencies traded lower on Friday as US regulators delayed Bitcoin ETF approval. This has clouded the sentiment of crypto investors. However, digital tokens pegged to dollars have shown signs of resilience. The majority of the top 10 digital tokens traded with cuts at 9:30 a.m. IST.

The Securities and Exchange Commission (SEC) said in a regulatory filing that it will seek public comments on a proposal to list Bitcoin ETFs with Cboe Global Markets Inc. It’s not the first time this year the SEC has delayed responding to crypto advocates.

Contrary to the views of the US Securities and Exchange Commission, the UK’s Financial Conduct Authority said more people are viewing crypto assets as a mainstream investment rather than “gambling” with ownership of bitcoin and similar cryptocurrencies in the UK this year rose to 2.3 million adults.

Regulators have repeatedly warned investors about the “speculative” nature of largely unregulated crypto assets, which have fallen between 40 and 50 percent since peaking in May. However, global securities index publisher MSCI is considering the introduction of indices for cryptocurrency investments, another step towards mainstream adoption for digital currencies.

“It was an eventful week for cryptos. Both BTC and ETH have been trading almost unchanged since the beginning of the week. We might see a small sell-off as sellers become more active. Polkadot remains under tremendous selling pressure The dollar-pegged cryptocurrency Tether, which is usually very stable, has risen slightly, “said Edul Patel, CEO and co-founder of Mudrex.

Bluechip venture capital funds, known for placing risky bets, like to invest in Indian crypto and blockchain startups, but say the uncertain political environment stands in their way.

Crypto shopping cart: Quick Glance (Source: coinmarketcap.com, as of 9:30 a.m., ACTUAL on 06/18/2021)

  • Bitcoin: $ 37,963.57, down 2.32 percent
  • Ethereum: $ 2,346.29, down 3.65 percent
  • Tether: $ 1.00, up 0.06 percent
  • Binance Coin: $ 354.07, down 0.99 percent
  • Cardano: $ 1.48, down 3.62 percent
  • Dogecoin: $ 0.3052, down 2.73 percent
  • XRP: $ 0.8415, down 1.84 percent
  • USD coin: $ 1, up 0.05 percent
  • Polkadot: $ 22.31, down 5.58 percent
  • Uniswap: $ 21.73, down 4.51 percent

Note: price change in the last 24 hours

Tech View from ZebPay Trade Desk

1inch was launched in 2019 with the aim of helping users find the best asset prices on decentralized exchanges. Within 2 years, 1inch has grown into one of the most widely used decentralized exchanges with over $ 290 million in their liquidity pool.

The 1 inch network is a collection of decentralized protocols with a DeFi aggregator and an Automated Market Making Protocol or AMM. Last December, 1inch launched its 1inch (1INCH) governance token, and the 1inch network was supposed to be managed by a decentralized autonomous organization (DAO).

ETMarkets.com

Tech-wise, 1inch has hit a ‘Morning Star’ pattern (Three Candle Trend Reversal Pattern) in the daily timeframe at the support level of $ 2.4 and is up nearly 56 percent, hitting the weekly high of $ 3.945.

However, the bulls failed to get a grip on the asset and failed to break the $ 4.00 resistance. As a result, the price has declined nearly 15.5 percent from its recent highs. To continue to bounce, 1inch needs to trade above $ 4 and close. The asset is currently trading at $ 3.319.

Main stages

Support: 2,442, $ 2.9

Resistance: $ 4, $ 5.4

The time is in UTC and the daily time frame is 12:00 PM – 12:00 PM UTC

(The views and recommendations in this section are the analysts’ own views and recommendations and do not represent those of ETMarkets.com. Please consult your financial advisor prior to entering into any position in any of the above assets.)

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Bitcoin (BTC) flaws set stage for alternatives

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Bitcoin, the most famous cryptocurrency in the world, has some shortcomings – and that, according to a Cornell University professor, has led other digital currencies to develop more workable options.

It’s not as anonymous as people think, and “mining” bitcoin is bad for the environment, stressed economics professor Eswar Prasad. It doesn’t work well as a currency either, he told CNBC on Thursday.

One interesting aspect is that other cryptocurrencies have come up with solutions to address some of Bitcoin’s shortcomings, said Prasad, who was formerly head of the China division of the International Monetary Fund.

1. Mining is harmful to the environment

Bitcoin mining refers to the energy-intensive process required to produce new coins and ensure that the payment network is secure and verified.

The electricity used to validate transactions on the Bitcoin blockchain as well as the mining process is “certainly not good for the environment,” said Prasad.

Tesla CEO Elon Musk said last month that his electric car company is no longer accepting bitcoins as payment for environmental reasons, causing the price of bitcoin to drop 5% in minutes.

He has since made a U-turn, saying in a tweet on Sunday that Tesla will accept Bitcoin in transactions if it can confirm “reasonable” and “clean energy use by miners”.

Crypto miners use specially designed computers to solve complex mathematical equations that make a coin transaction effective. The miners are rewarded for their efforts by getting paid in the cryptocurrency.

However, the entire process of creating a bitcoin requires a lot of energy and, according to the Cambridge Bitcoin Electricity Consumption Index, can use more electricity than entire countries like Finland and Switzerland.

On the other hand, Ethereum – the second largest cryptocurrency sometimes seen as an alternative to Bitcoin – is developing a different mining method that uses less energy, as Prasad pointed out.

Read more about cryptocurrencies from CNBC Pro

It is called “Proof of Stake” and is the underlying mechanism for Ethereum, which activates so-called “validators” in the network if they can prove that they own ether or a “stake”.

Ultimately, it should eliminate the need for massive computing power to validate transactions, and the Ethereum Foundation claims it will use 99.95% less energy than before.

“This will be a lot less energy intensive and could offer many of the benefits that Bitcoin should offer. It could also make transactions a lot cheaper and faster, ”said Prasad.

It’s not there yet, however, he added.

2. Not so anonymous after all

Earlier this month, U.S. law enforcement officials announced they had recovered $ 2.3 million in Bitcoin paid to a cyber criminal group involved in the ransomware attack on the Colonial Pipeline in May.

The FBI said its agents were able to identify a virtual wallet that the hackers used to collect payments from the Colonial Pipeline.

“The main idea of ​​Bitcoin … was to provide pseudonymity,” said Prasad. “But it turns out that if you use Bitcoin a lot, and especially if you use Bitcoin to get real goods and services, it will eventually become possible to link your address or physical identity to your digital identity.”

What is interesting, he said, is that there are other cryptocurrencies trying to fix this and provide more anonymity. He named Monero and Zcash as examples.

Chris Ratcliffe / Bloomberg via Getty Images

“So Bitcoin has really started a search for a better alternative and people seem to be looking for a medium of exchange that doesn’t have to go through a trustworthy institution like the government or a commercial bank – but that’s not quite there yet “said Prasad.

3. Doesn’t work well as a currency

In theory, Bitcoin should provide an anonymous and efficient medium of exchange, but “it didn’t work in that regard,” said the economics professor.

Rather, it is “slow and awkward” to use Bitcoin to pay for goods and services, and the market is very volatile, Prasad said.

Bitcoin is prone to large fluctuations in volatility, as evidenced by the 30% decline in a single day over the past month.

“So you could take a bitcoin to a store and get a cup of coffee one day and a lavish meal with the same bitcoin the next. So that doesn’t work well for the medium of exchange, “he said.

Bitcoin has become a speculative asset for people who hope it will increase in value instead of using it as a means of payment, Prasad said.

– CNBC’s Sam Shead contributed to this report.

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