What Is Cardano?
Cardano is a blockchain platform for the development of enterprise-level decentralised applications (dApps)—apps that run on the blockchain. With peer-reviewed research and evidence as its foundation, Cardano is designed to be secure, scalable, and sustainable, providing reliable financial and social applications on a global scale.
Cardano aims to tackle the issues faced by the Proof of Work blockchains that came before it, in particular, scalability. While Ethereum facilitated dApp development, its low throughput means transactions can be slow and expensive when the network is congested. In contrast, Cardano can maintain network performance while processing a large number of transactions.
The Cardano blockchain uses a Proof of Stake consensus protocol called Ouroboros, which is provably secure, capable of meeting global demand, and sustainable, requiring far less energy than Bitcoin or Ethereum.
The Cardano network is split into two layers CSL and CCL. The CSL or Cardano Settlement Layer is where all the transactions are validated by Ouroboros. The CCL layer or Cardano Computing Layer is where the processing for the dApps is facilitated.
ADA is Cardano’s native cryptocurrency and is vital for staking in the project’s Proof of Stake system. It can also be used as a secure and efficient medium of value exchange and will be used to access Cardano-based applications and services in the future.
Ways to Invest in Cardano
Cardano is popular with a range of investor profiles as it can lend itself to both short-term and long-term purchases. These approaches both have their own advantages and we’ll explore them in more detail below.
Buy and hold Cardano
Buy and hold is the most straightforward strategy there is. It doesn’t require much skill as anyone can buy ADA and hold onto it. There is no need to spend time and effort monitoring and analysing the market to potentially make a profit with this strategy.
One of the benefits of holding onto ADA for the long term is that you can stake it during that time. Anyone who operates a stake pool or delegates their tokens to a stake pool is rewarded with more ADA.
Best Cardano wallets
Many long-term investors opt to self-custody their tokens in a private wallet with access to the Cardano address and key. This can make your tokens more secure and means that you don’t need to rely on centralised services in order to access them.
Investors with smaller holdings often choose software wallets as they are free, user-friendly, and can be downloaded for desktop or mobile.
The volatility of ADA’s price means traders can also generate more frequent profits by buying and selling it more often. This will take more time and effort and traders often use technical analysis to decide when to buy and sell.
Private wallets are less convenient for traders as they need to access their tokens more often. Instead, many choose to use web wallets, which crypto exchanges provide for free.
Those who thought to hold Cardano should also consider whether or not to stake it also. Staking is where holders of particular crypto set some aside to help approve transactions on the network. Those who stake Cardano will earn a reward which is taken from the trading fees that happen on the network.
Should I Buy Cardano ADA Now?
We can provide you with information about Cardano’s fundamentals and potential, but you will have to decide whether to invest for yourself. There is a limited maximum supply of ADA, and this scarcity could make it a good store of value in the long term.
The ability to earn staking rewards from ADA could incentivise more people to buy and stake the token, while more ADA being staked, means a smaller supply available on the market. This could be a positive combination for ADA price. For more information on price predictions, read our ADA price forecasts here.
Project building on Cardano creates even more demand for ADA, as it will be usable for a range of applications. The release of the Goguen update in September 2021 made Cardano programmable and has paved the way for the development of dApps and services.
Cardano is now capable of having its own decentralised finance (DeFi) ecosystem and, with its low cost and sustainability, it could even hope to rival Ethereum as the home of DeFi. With the final two stages of development focusing on scalability and governance, Cardano could achieve its goal of effecting global positive change.