Is Cardano a Good Investment in 2021?
If you’re not following altcoin or cryptocurrency investments, then understanding why Cardano is a good purchase might be a challenge at first. Most people heavily involved in the cryptocurrency world would say Cardano is a good investment in 2021 for many different reasons. For starters, many people look at what happened in April, when Cardano boasted a 570 percent year-to-date increase. This can be compared to Bitcoin and Ethereum, with returns of 98% and 144%, respectively.
Not only that, but Cardano had a market capitalization of $39 billion and was (and remains) one of the top 5 cryptos out there.
As one of the 900 altcoins available on the market right now, what makes Cardano so unique? If you want to invest in any altcoins, then get a move on Cardano now.
Here are 15 reasons why Cardano is a good investment in 2021.
1. Cardano is a 3rd Gen Blockchain, Smart Contract Platform Designed for Mass Adoption Across a Range of Sectors With LOTS of Utility
Cardano is focused on decentralized finance and providing digital identities to millions. As the largest blockchain deployment in the world, Cardano can be used for improved security, by providing digital identities to those who can’t gain access to them, and for securing so much private information. It has use cases in all levels of the supply chain, healthcare, and a huge vision for developing worlds, particularly, Africa. Take a look at this article to learn more details about Cardano’s role in Ethiopia.
Think of Cardano as connecting the unconnected and banking the unbanked.
Cardano has also been in R&D for many years with a multi-year roadmap (In fact the highly anticipated Goguen era is nearly complete). Their slow approach means that all of its development has utilized a research-driven approach. The blockchain is peer-reviewed, goes through formal verifications, and is rigorously tested before releasing products to market. No joke, there have been over 100 whitepapers written during research. This development process is set to culminate in August with the Smart Contract launch.
It’s made of up three entities:
- Tech company IOHK (Internet Online Hong Kong)
- The Cardano Foundation
- And its commercial arm Emurgo
Cardano has had better ROI in 2021 compared to both Ethereum and Bitcoin. It is one of best performing digital assets:
- If it matches Bitcoin market cap will be around $30, designed to overtake it long term due to its use and utility. BTC on peer-to-peer payments.
- ADA saw a severe increase after the COVID pandemic, skyrocketing from 3 cents in March of 2020 to 1.50 today. This compared to Ethereum, which is hovering around 2.47 and has been in operation for much longer.
- Markets affected by Bitcoin and its energy-intensive mining flaws, as highlighted by Elon Musk.
- POS systems are a lot better so are due to receive more media attention in the future.
Its goal is to rival and compete with Ethereum as the number one smart contract platform. And in the way that it’s been designed, it easily competes with Ethereum which is relying on ETH 2.0 coming out over the next couple of years and has extremely high gas fees.
While there are no firm dates yet and it will be hard to do, technically speaking, Cardano could flip Ethereum.
2. It is the 3rd Largest Cryptocurrency
Cardano has been under research and development since 2015 and is due to release its highly anticipated final upgrade ‘Alonzo,’ which will add Smart contracts to the ecosystem. This event will be the ‘capstone’ of upgrade releases, according to Charles Hoskinson, enabling the blockchain to be deployed to market.
Cardano ADA functions using Ouroboros, a Proof-of-Stake (PoS) protocol that divides the world into epochs for 5 days. Using what is effectively a lottery, this protocol elects a slot leader every few seconds to validate a block on the ledger. The designated slot leader has to be online at the time to validate the block and earn rewards.
3. It is the Largest Proof of Stake Network in the World and is Fully Decentralized
With over 2500 stake pools, validating blocks without any contribution from IOHK, who retired their pools in March.
Investors can earn extra ADA staking their coins to the network with a stakepool to earn 5% a year, risk-free and without their coins being locked up. With price appreciation, this can be a lot!
In 2017, Bitcoin cost 300k an hour to run. While it generates a large market capitalization, this cost is not functional. Therefore, one of the biggest bonuses of Ouroboros, and therefore Cardano, is that it doesn’t require the extensive computation resources that Bitcoin requires to create a block, making it even more decentralized.
As a consequence, this system is way cheaper with similar security guarantees as Bitcoin. Additionally, the slot leaders don’t just maintain a single block; they can maintain other blocks on other chains—the cost of constructing a block is so low. It is tractable over a range of blocks instead of a single blockchain.
Proof-of-Stake consumes only 0.01% of what Bitcoin needs.
High centralized BTC miners in China are now looking to leave China due to the government ban on mining. Because Cardano POS is fully decentralized it cannot be affected by governments or central authority
Also, there is a 45 billion max circulation supply of ADA and there is around 32 billion currently in circulation.
As of Epoch 265, 72% of Ada is staked, equating to over 23 Billion ADA. This is very impressive when you compare it to other POS blockchains. With a high percentage of ADA staked, this results in fewer coins being available on the market for trading. During Market volatility, ADA holders are incentivized to hold their coins for staking rewards easing any downward selling pressure and increasing price when there is demand in the market.
4. It’s Very Fast and With Cheap Transaction Fees, Compared to BTC And ETH
Compared with Proof-of-work (PoW) protocols, Cardano is much faster. It looks at the distribution of tokens and, from random numbers, it holds an election or lottery to create slot leaders.
Conceptually, it does the same thing that a miner would do in Bitcoin. This is essentially the same as a person who discovers a block in bitcoin. But, slot leaders can run more transactions since they are automated, and epochs are working in parallel. This allows rigorous security standards and future-proofing.
There are many bonuses to the Ouroboros protocol (including reduced cost, personnel, work, and more security, speed, and functionality).
5. Scientifically Peer-Reviewed Code to Ensure Security
There have unfortunately been millions of dollars lost on other protocols due to poor research and development. Cardano has been under dev for 5 years, and it uses formal verification methods to verify the code and stress test. It was designed with the ability to scale to billions of people and for mass adoption.
The system is designed for scalability with 2 layers: Cardano Settlement Layer and Cardano Computational Layer.
Ouroborous as a protocol has been accepted at the prestigious Crypto 17 Conference. For the academics out there, note that for Computer Science and Information Sciences, the peer-reviewed process is very different than in other fields.
Instead of going through the peer-review process to submit to a prestigious journal, it is more prestigious to get through to a major CS/IS conference. Crypto, EuroCrypt, and CSS are tier-one conferences in the CS and cryptography worlds. These conference applications actually require proposals in the form of a full paper that goes through a double-blind peer-reviewed process, a referee process, and typically only 15% of applicants get through.
So, you may, in some regard, have to take their word for it if the science was presented at a CS conference and you don’t have access to those presentations, for example. But, you can see that it was accepted, and you can refer to the peer-reviewed data through IOHK research too.
What you need to know is that all the science in this third-gen is peer-reviewed. The TPS capabilities, for example, were presented at Crypt17; this peer-reviewed white paper (based on the Youtube clip in the link previous) shows the provability of secure PoS. It’s a new type of structuring network using policies and clever engineering principles (from John Day at Boston University). Building this heterogeneous network gives you privacy and transparency guarantees.
The bottom line is that Cardano is building bridges, and in ways that other blockchains aren’t. Cardano allows for mainstream programming languages to write code on it. Ethereum uses solidity only which 10% of world devs use.
While Ethereum improved upon the functionality of Bitcoin, it can’t scale to millions of users. Furthermore, it, along with all the cryptocurrencies, has bad governance. Introducing a high assurance code without compromising security can improve the governance of blockchain technology.
Cardano prides itself on three principles:
It seems extremely difficult to do all this without compromising security, but it can.
7. ERC-20 Convertor
Cardano has designed a convertor that can migrate ETH tokens to Cardano seamlessly. Projects will be enticed to avoid high gas fees on ETH.
Cardano may take a lot of the Ethereum market cap.
8. Community Initiative Project Catalyst
IOHK recently launched Project Catalyst as a series of experiments to advance on-chain governance and accelerate community-driven innovation on Cardano. The project seeks to achieve the highest levels of community collaboration, seeding the best ideas through community moderation and funding opportunities.
Really, the Cardano community is a self-investment vehicle where new projects can apply for funding for development. ADA holders vote through their wallets on the applications (with voting power based on their ADA coins), implementing a democratic governance model in blockchain for the first time. The funding, which will be worth at least $250 million dollars (as this was the amount awarded last round to help grow the ecosystem), is coming straight from the Treasury.
Cardano’s project has become the largest DAO.
9. Defi Ecosystem
Dozens of Dapps, DEXs, and other applications are about to launch on the platform when Smart Contracts are launched. See below:
In terms of price, the projects will need to purchase ADA for liquidity for their projects, thus removing ADA from circulation. Less supply results in a price increase
10. Africa Vision
Cardano has a huge Africa vision, which will give digital identities to millions. As the largest blockchain deployment in the world, and use cases of Cardano were announced alongside a government contract with Ethiopia, there are global, decentralized reasons to invest in Cardano.
According to this deal, five million students will receive Cardano blockchain-based IDs, so the authorities can track their academic performance. 750,000 teachers will also get access to the system.
There are other initiatives in Africa and Ethiopia too.
11. Largest and Most Committed Online Community
Cardano has the largest and most committed online community. After the cryptocurrency attracted the most attention on social media at the beginning of February, Cardano again received the largest number of posts, news, and likes with 36% of shares.
12. Community Committed to the Vision and The Brand (Unlike Ethereum Which has No Brand, Only Utility)
Cardano isn’t just about a brand trying to make money, they have developed a true vision. Their value-added is really driven home, in ways that are similar to what Apple and Nike have done extremely well.
People align with the core beliefs of Cardano and its mission. It’s not just about building a great blockchain, it’s about banking the unbanked and giving power to the people. It’s a very powerful message.
13. Regularly Most Actively Blockchain On Github With Most Active Commits Showing Development
Developers are the most active blockchain on Github, showing that there is strong community involvement.
14. 900 Companies are Interested in Cardano
A recent Tweet unveiled that over 900 companies are interested in working with Cardano, many of them Fortune 500 companies. This shows huge growth potential and opportunities. With all of these companies getting onboard, there is massive speculation that larger investment is just on the horizon. This is a great sign for the Carano community that has been talking about potential for mass-adoption for years.
15. Founded by Charles Hoskinson, co-founder of Ethereum
Ethereum co-founder Charles Hoskinson saw problems with Ethereum and started his own company. He is very active on social media, and regularly a host to AMAs to provide the community with updates on the development and roadmap. This means he is more transparent through regular communication, exhibits good morality leadership, and wants to help those in the developing world
Crypto regulations are coming in the future and Hoskinson is a forward-thinking CEO having built Atala Prism to allow for digital identification of users so Cardano will be regs ready, unlike most other cryptos.
All things considered, we know that the track record of Ethereum co-founders means something.