Is Cardano a good long term investment?

Cardano's development began in earnest in 2015. The cryptocurrency is the brainchild of Ethereum co-founder Charles Hoskinson, who left his previous project after a fallout with Vitalik Buterin, the other co-founder. Buterin was adamant about making Ethereum change its non-profit status, while Hoskinson pushed to accept venture capital and become for-profit.

Hoskinson was joined by another colleague from Ethereum, Jeremy Wood, who helped form IOHK, a blockchain engineering company. Other organizations like EMURGO and the Cardano Foundation join IOHK to oversee the development of Cardano. On September 27th, 2017, the project went live, with the name adopted from Gerolamo Cardano, an infamous Italian polymath. On the other hand, Cardano's native token, ADA, derived its name from Ada Lovelace, a mathematician.

The Hype: Is Cardano A Worthwhile Investment?

Cardano has recently caught media attention, with celebrities like Gal Gadot and Gene Simmons investing in the cryptocurrency. And for good reasons, too. For years now, people have pondered the sustainability of cryptocurrency investments due to their volatility rates. However, recently many have found a good long-term investment in Cardano. The reason is ingrained in the cryptocurrency's nature. Firstly, Cardano uses a brilliant blockchain system with better energy efficiency, scalability, and adaptability than most cryptocurrencies. Also, its developers have maintained a consistent and transparent approach to the project, maintaining a data-driven platform that helps manage one of the biggest concerns of cryptocurrency investing: volatility.

Experts posit that it might be years before Cardano's current market value justifies its services. However, there might be some cynicism to that sentiment because of the real-world applications of the digital asset. This makes it a long-term bet worth considering.

Besides, Cardano has established itself as one of the forerunners of decentralized finance. For example, despite Ethereum's update, the ADA coin maintains its high in-demand status. This is likely because Cardano charges up to 95% less for executing smart contracts than Ethereum. Cardano also underwent a protocol upgrade or hard fork, which deployed over 100 smart contracts within 24 hours.

In 2021, Cardano partnered with Chainlink, another cryptocurrency platform—allowing it to base its smart contracts on real-world data, including price feeds, economic indicators, and governmental changes, among other factors. With these showings, it's reasonable to expect Cardano's presence and use to expand in 2023.

The Basics of Cardano

Unlike Bitcoin, which uses a proof-of-work protocol for verifying transactions, Cardano uses the faster proof-of-stake protocol known as Ouroboros. In this system, token holders within the Cardano blockchain set up nodes and assume the role of transaction validators. To do this, token holders stake their holdings on the blockchain, allowing for a fair and transparent process.

The proof-of-stake protocol randomly chooses the validator node to verify transaction blocks to guarantee further security. The process is pseudo-random because selections depend on holders with the highest stakes. Thus, the higher the stake, the more likely one will become a validator.

Upon confirming the transaction, the holder adds it to the Cardano blockchain and gets some ADA tokens as block rewards. So, it's like the mining process for Bitcoin, but without huge power consumption or expensive mining rigs.

Also, since Cardano is built on a peer-reviewed platform before any new technology is introduced into the network, it is researched. Afterward, the research is reviewed by fresh pairs of eyes to allow for utmost compatibility. For its research team, Cardano employs some of the best academics from multiple disciplines, including game theory, philosophy, behavioral theory, and sociology.

The Future of Cardano

Given the technical and fundamental aspects of Cardano, long-term cryptocurrency investors can't help but consider it for their portfolios. They are already familiar with the volatility concern that is often higher than bonds and stocks, and, for once, a cryptocurrency organization seems determined to address that concern. This makes Cardano a promising prospect for the future, when more cryptocurrencies will join the movement.

Furthermore, as a third-generation cryptocurrency, Cardano has learned from the shortcomings of the first two generations, especially Bitcoin and Ethereum. For instance, while Bitcoin might have established and popularized the cryptocurrency niche, it isn't without its drawbacks, like poor energy efficiency, speed, and expensive mining process. On the other hand, Ethereum sought to remedy Bitcoin's drawbacks with faster transaction times, but its charges are astronomical compared to Cardano's.

Other positives of the Cardano network include:

• Cardano partnered with Rival, an eSports organization, to aid in minting and distributing non-fungible tokens (NFTs). With NFTs growing in popularity daily, Cardano aligns itself as the perfect competitor to Ethereum-based NFTs.
• Verite, a company, investing in global reforestation, uses the Cardano blockchain for storing plant records of all the trees they grow.
• Cardano also partnered with the Ethiopian government to use blockchain-based IDs in learning centers. The idea is to record and monitor academic performance securely.
• Finally, DISH Network adopts the Cardano blockchain to provide its users with digital identity services, thereby helping to curb cable tapping.