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How Cardano’s ( Ada ) be an Alternative to Bitcoin

Bitcoin and Ethereum. So, you know the top two players in crypto

but what about the Cardano Network’s coin Ada.
Ada is an altcoin, meaning it’s an alternative to Bitcoin and is named after the 19th century mathematician, Ada Lovelace, who is considered the first computer programmer.
Late this summer, of surge in interest in Ada pushed the cryptocurrency to the third largest, behind Bitcoin and ether, Ethereum’s currency.
During the rise, Ada reached a market capitalization of more than $90 billion and rose to a high of more than $3.

That’s nearly a 2500% increase in price on a year over year basis. – That’s primarily driven by retail investors.

I think a lot of the ones that I’ve talked to are saying, “I want to kind of find the next Bitcoin. So maybe that’s Cardona’s Ada token.”

Given the crypto market’s volatility, the third largest changes often, but with nearly 6,000 cryptocurrencies in existence this year,

why is Cardona’s Ada one of the few breaking through?

We’ll explain. Cardano describes itself as a third generation blockchain platform.
You can think about the blockchain generations, similar to the evolution of the cell phone.
Bitcoin, the first generation is like the flip phone.
It was revolutionary in its creation, but only does basic things.
The second generation Ethereum 1.0, that’s like your first few smartphones.
It offers apps, but is kind of slow to load.

The third generation Cardano and Ethereum 2.0, want to be more like phones today, where speed and usability are crucial.
The key difference between the first generation and the third has to do with how the network works.
Bitcoin runs on something called a proof of work mechanism, which runs something like this, miners, not those ones, but people who set up computers, allow the system to work, their computers simultaneously race to guess a complex sequence of numbers in order to validate a block of transactions.
The miner whose computer wins is awarded Bitcoin and records the validated transaction on the blockchain ledger.
A fancy word that essentially means the online record book.
But aspect when prices rise, so do the barriers to enter for miners.
So we’re seeing companies fully dedicated to mining.
We’re seeing miners taking over warehouses and factories to set up mining facilities.
While secure, this system requires huge amounts of processing power, simply because it requires all mining computers to work on the same puzzle.
it rewards those with more computing power.

Just how much power?

In a year, the Bitcoin network uses about the same amount of electricity as Washington State.
We’ve seen proof of work increasingly come under scrutiny because of the energy intensity that it uses. This is one of the biggest challenges of the first generation of crypto,

main reason why Cardano is breaking through

Cardano uses a different system called proof of stake. A system also adopted by Ethereum second model, Ethereum 2.0, which is expected to be fully rolled out in the future.
The proof of stake model is, I think, a very exciting prospect for people who are in the space because it uses an entirely different system in order to verify transactions on the blockchain.
In Cardona’s proof of stake model, Ada owners use their own holdings to help validate transactions.
This is called staking or delegating. Think of a stake as a commitment to keep the Cardona network operating and secure.
To earn Ada users join a stake pool, either one they’ve made or another user’s. Not every user in the stake pool is responsible for verifying transactions. Instead one user, a pool operator, does the work on behalf of the group cutting down on computer activity.
So in short, in first-generation crypto, every computer races to solve one math puzzle.
In third generation, only the state pool operator does the work.
But the proof of stake system, isn’t the only factor that helped Cardona breakthrough.

Cardano smart contract

Cardano recently introduced something called smart contracts to its system, with an upgrade it calls Alonzo.
Smart contracts are seen as game changers because they allow the blockchain to host other operations.
Again, think of a smartphone. It’s similar to the idea of an app store, except with a blockchain, these apps are called dApps or decentralized apps, and there is no company like Apple or Google in between the user and the application.

Instead, the smart contract has programmed code to facilitate agreements and transactions between the user and the dApp.
Users hope Cardano’s adoption will allow it to better compete with the Ethereum network, Where about 80% of dApps are built.
But all that traffic has created issues.

The reason that Ethereum has faced some scrutiny this year is just because there’ve been, there’s been so much activity on the network that there’s been more congestion and higher transaction fees in order to try to transact on the network.
So the idea for Cardano is to take the Ethereum model and make it more scalable.

While Cardano’s promises may sound great in theory, they’ve yet to undergo the most important test, time.
We’ll have to wait and see, you know, how successful people are able to use the platform in order to, you know, build decentralized applications and create non fungible tokens.
The introduction of smart contracts is stage three in a five part plan, according to the platform’s roadmap.
Still to come are upgrades on scalability and governance.
Investors have to keep in mind, this is not going to be a steady investment.
But I think people who like to trade in mid-volatility, that’s one of the draws.

The blockchain engineering company behind Cardona, IOHK, warned that expectations need to be managed with this upgrade. So how smart contracts will impact Cardona in the long run? Time will have to tell.

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