Cardano, the eco-friendly (sort of) substitute of Bitcoin, is currently witnessing all-time highs. Many investors are trying to wrap their heads around what Cardano is all about and the future of cryptocurrency. This article will help new investors understand the working of the currency and some predictions for the coming years.
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Cardano- What is it, and how does it work?
Cardano is a Cryptocurrency network that is one of the first in the world, which is also peer-reviewed. ADA is the native cryptocurrency, and Cardano has its base founded on the same. The supply limit of Cardano is 45 billion tokens and was founded by the ex-co-founder of Ethereum, Charles Hoskinson.
Cardano works on two layers of blockchain, namely the Cardano Settlement Layer (CSL) and Cardano Computational layer (CCL). The CSL works to manage the peer-to-peer transaction while the CCL handles the smart contracts.
Cardano uses a Proof of Stake mechanism but has a slight distinction in its agent. Unlike most POS transaction methods, the individual with the highest number of tokens is given preference. But the Cardano POS system creates different time slots known as an epoch. Each epoch has a leader appointed by other nodes. Every leader has a chance to carry out block creation. It reduces transaction congestion by a lot and makes transactions on the system much faster.
Arguably, it is a better alternative to other cryptocurrencies as it claims to reduce electricity wastage, which has considerable environmental impacts.
Recently, the cryptocurrency has launched its smart contract upgrade, which is the reason for the rising positive sentiment of the market towards Cardano. It also recently upgraded its system to save tokens in decimals. The Network has a great team of developers and has been bringing the latest updates every week.
The crypto saw an astronomical all-time high this year as it traded for more than $3 but now is more stable at around $2. It has a market cap of more than $70 B, and the trading volume is $2.8B.
Cardano price prediction
Considering the current trend, many have predicted Cardano’s future price can hit $3 by 2022 and $10 in five years. Following the crash of May in 2021, the crypto hit a low of $1 in August. But with the latest launch of its smart contract integration, it started trading at $3, an all-time high. The smart contract integration will allow Cardano to be used in Defi applications and used in their programming. The latest innovation has helped the currency to keep a bearish trend amongst its investors.
Provided that this trend continues and Cardano manages to hold its word on smart contract integration, it can be trading at $5 by the end of the year. But if it does not and shows no new development, it can still be selling at a similar level of $2.3 to $2.5.
The eco-friendly facet of the currency has also triggered many eco-friendly investors. Following the tweet of Elon Musk that cryptocurrencies hurt the environment, the currency had gained attraction. Suppose it can continue holding the similar sentiment and investors want to become more environmentally savvy., the prices can surge up to $5 in 2021 and $15 in five years.
But many critics have pointed out the synchronization errors, which leads to many missed transactions on the Network. If this is not fixed soon, then the price can go down to $1.8.
For the next year, 2022, the price prediction will depend on the value it closes this year and if the smart contract integration is successful. Its success can make the crypto trade even at $7, but if not, it will continue to trade at the unremarkable $2.5.
But shortly, if the Network can work with more collaborative projects and improve its two-layer security features, it can even go up to $25 in the next five years.
Investors need to be very mindful of this Cardano cryptocurrency, keep an eye on its development, and work to predict future surges or dips. Also, investors should be wary that Ripple and Cardano are not the same currencies. Whether you are contemplating whether Cardano is a good investment or ripple a good investment, understand their distinction since they work differently and not interchangeably.