Beginners Guide To Cardano In Plain English

An upcoming challenger to Etherium is Cardano.

Ada is the coin used to power Cardano. Cardano is  the next generation cryptocurrency that improves on Etherium. The main difference between Cardano and Etherium is that Cardano enables faster transactions and uses less energy.

Bitcoin is first generation.

Etherium is second generation.

Cardano is third generation.

 How do you buy Cardano Ada? You can do so on the following exchanges: 

What Is Ada?

Like bitcoin and ETH, Ada is a cryptocurrency. A cryptocurrency is a digital currency secured by cryptography.

Ada isn’t a coin. It isn’t a note or a bar of metal. Ada takes the form of a number and it resides in computers. You can send it to someone else just as easily as you send an email.

Why does it have value? 

Ada has value because people choose to give it value. That’s also true of art, precious metals and currency. It can be worth a lot or a little, depending on the value people choose to give it.

What makes Ada different from currency? 

The main concept to understand is that Ada is decentralized.

Ada transactions don’t require a third party to validate a financial transaction. Any two people, anywhere in the world, can send bitcoin to each other without the involvement of a bank, government, or other financial institution.

It’s easier to send than money. It’s faster. The transaction fees are much less than those charged by banks. It’s a more efficient form of currency.

Many people like the idea of having control of their own money, rather than letting banks control it.

How can Ada eliminate third party verification?

Every transaction involving Ada is tracked on the blockchain.

A blockchain is simply a ledger. The blockchain is a historical record of every transaction ever made using Ada. Unlike Bitcoin and Etherium, Ada uses an energy-efficient means of maintaining the blockchain called proof-of-stake. Bitcoin and Etherium use proof-of-work.

For further information, check out  “the difference between proof of work and proof of stake“.

Why is Ada attractive as an investment? 

After the 2008 financial crash, many people lost faith in banks.

After governments reacted by printing more and more money, many people lost faith in currency as a store of wealth. Interest rates have remained low.

Not great for savers.

Cardano is an ecosystem that might one day rival traditional banks, the finance industry and the execution of contracts.

Or it might be a fad, as many pundits like to claim.

At this point, Ada is a highly speculative investment class. Investors should consult an investment advisor before making investments decision and risk no more than they can afford to lose.

Further Reading: