Cardano’s ADA crypto soared on Thursday 2nd September to top $3 for the first time. This came after excitement built around the major upgrade that will let smart contracts be built on the network. Currently, ADA is the third-largest cryptocurrency by market capitalization, behind Bitcoin and Ether.
AD has had a stellar run in recent weeks as investors continue to anticipate the major network upgrades codenamed Alonzo eagerly. The coin’s sudden price jump on 1st and 2nd September coincided with Cardano developer IOHK stating that Alonzo upgrades had been launched on a test network, and it is waiting for the full launch later in the month.
Let’s get deeper into Cardano’s Blockchain architecture to understand why Bitcoin and Ether should watch out.
What is Cardano?
The little-known crypto Cardano (ADA) seems to have emerged from the ashes like a phoenix and become the third-largest after Bitcoin and Ethereum, following a recent price surge. Cardano is a blockchain platform with its crypto called ADA.
It was established in 2015 by Ethereum co-founder Charles Hoskinson and later launched in 2017. Since then, it has returned over 7,080% to investors. Cardano is the largest crypto that uses proof of stake blockchain, which is considered more environmentally friendly. Consequently, crypto enthusiasts have begun shifting their attention to the coin, giving it an upper hand over Bitcoin and Ethereum, and this could be the reason for its recent success.
Why is Cardano different?
Cardano mainly aims to create a stable crypto ecosystem. Instead of copying each blockchain on each node, such as Bitcoin and Ethereum, the coin’s blockchain streamlines the number of nodes in a network by appointing leaders. These leaders are responsible for verifying and validating transactions from a group of nodes.
Cardano is a third-generation blockchain, and it seeks to solve some of the scalability and other issues that face major cryptocurrencies. More specifically, it aims to solve issues of scalability, interoperability, and sustainability on the crypto platforms.
Cardano Blockchain Architecture
Cardano was built to use smart contract technology to its full potential. The blockchain’s smart contract support will enable the platform to establish self-executing agreements that do not require professional oversight. With this smart contract, anyone on the platform can conveniently input any particular condition that has to be met, which will be automatically executed without the constant involvement of users.
Cardano’s blockchain architecture contains two main elements, the Cardano Settlement Layer (CSL) and Cardano Computational Layer (CCL). Other major blockchains only operate on a single layer, which often causes congestion, slow transaction fees, and higher fees.
The CSL Layers powers the blockchain’s unit of account, which is where peer-to-peer transactions are facilitated. The CCL layer is the livelihood of the Cardano network. CCL maintains the chain’s security, acts as ground zero for smart contract deployment, and serves as a framework for meeting the network’s goals to ensure regulatory compliance with various jurisdictions.
Why Bitcoin and Ether Should Watch Out For Cardano
Cardano is currently the third-largest crypto, and it shares some similarities with Bitcoin and Ethereum but also has some advantages that make it a threat.
First, it differs from its cousins because transactions are verified using proof of stake, which rewards ownership, rather than proof of work, which rewards effort. Proof of stake consumes less energy. Additionally, Cardano’s ADA supply is limited, like bitcoins.
Recent statistics revealed that Bitcoin’s estimated annual emissions are over 57 million tons of CO2, about the same annual carbon footprint of a small European country.
On its website, Cardano states that “They have changed science. They have changed what it means to build global systems and sustainable models of exchange and governance.” Further, the vision states say, “Cardano. Alongside its community and partners is defining a new future: a decentralized future without intermediaries, in which power is returned to the individual.”
After the long-awaited launch of Alonzo, Cardano will be listed on Japan’s exchange after authorization, which is considered to have one of the strictest criteria for entering the market. This means Cardano ADA will join the “big leagues” and pose a significant threat to Bitcoin and Ether.
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