Buying Cardano as a Trade or Investment Overview: What is Cardano?
Cardano is a newer blockchain platform that uses a cryptocurrency called ADA, which functions as fuel for operating the Cardano platform.It’s common to think of Cardano and ADA as synonymous; they are distinct, yet intrinsically related.From a development standpoint, Cardano is an innovative new platform for transferring money but also for running applications and hosting smart contracts.
ADA is the cryptocurrency used by Cardano’s settlement layer and many crypto investors are optimistic about the long-term prospects for both the platform and the currency.
Launched in September of 2017, ADA is a relative newcomer to the cryptocurrency scene.Being late to the party has its advantages, however.Learning from the challenges faced by other cryptocurrencies, Cardano was designed to bypass the hurdles seen in other platforms by providing scalability, a challenge many competing cryptocurrencies struggle with when put to the test.
For example, CryptoKitties, a blockchain game gone viral in 2017, brought the Ethereum network to a near halt due to the number of transactions pressed upon the system.Bitcoin, the largest cryptocurrency by market cap, has similar scalability problems, often resulting in higher transaction fees when the network is bogged down.
Cardano also targets interoperability, with a goal of making the platform capable of reading other blockchains , reducing problems and efficiencies that result from systems that can’t talk to each other.
Sustainability is another goal of Cardano and the ambitious project approaches long-term viability from several angles.Cardano provides the option to append metadata to a transaction, a must-have before banks and financial institutions can adopt the technology.Banks need to know who is sending money and for what purpose.
Anonymous currencies don’t provide this option.Cardano has quantum resistance in its development roadmap.At some point in the near future, existing one-way encryption will be vulnerable to quantum computers as the technology evolves.For many existing cryptocurrencies, this poses a serious security risk.Cardano aims to be ready and reports quantum resistance to be about 50% complete.
Two years in the making before its launch, Cardano is governed by a scientific process.Rather than being birthed after issuing a whitepaper, the Cardano platform was born based on peer review of proposals, bringing both transparency and a democratic process to the fully open-source project.
Already the 12th largest cryptocurrency by market capitalization , Cardano (ADA) is a dynamic currency.A surge in buying sent ADA up over 1,000% within 30 days in late 2018.Even after the profit-taking selloff, ADA currently trades at nearly 300% of its value at launch.
Where Can You Buy Cardano?
Cardano’s ADA token can be purchased or traded at a number of exchanges and HitBTC is largest based on trading volume.Huobi Global, Binance, Upbit, Dcoin, and CoinEx round out the list of other larger volume exchanges where investors buy or trade ADA.
It’s essential for U.S.crypto investors to read the fine print for each exchange .ADA isn’t available from the some of the better-known exchanges like Coinbase, so if you find ADA listed at an exchange, find out if it accepts U.S.customers and research the exchange itself before you send any money or deposit any cryptocurrency.
HitBTC, for example, used to accept U.S.customers but now does not.
U.S.exchanges for Cardano (ADA): Binance Bittrex How to Buy Cardano (ADA)
Buying Cardano is similar to buying many other types of cryptocurrency.
The first step is to store your ADA tokens.Step 1: Get an ADA Wallet
Unlike more mature cryptocurrency projects, Cardano doesn’t offer many wallet choices (yet).Expect the number of wallet choices to increase over time as Cardano’s ADA gains in popularity and acceptance.What Cardano lacks in wallet choices, it makes up for in wallet features.
Daedalus, the wallet recommended by the Cardano project, allows hierarchical wallet structures so you can organize your funds as you choose.The Daedalus desktop wallet also supports plugins and offers a secure API for developers to extend the wallet’s functionality.Ledger, a leader in hardware wallets, also supports ADA and works with Yoroi Wallet or AdaLight to secure your assets.
In many cases, you’ll want to transfer your ADA to a separate wallet rather than keep your crypto assets with the exchange.
Step 2: Choose a Trusted ADA Exchange
The internet is littered with tales of failed cryptocurrency exchanges.It’s important to choose an exchange that isn’t likely to close its digital doors tomorrow.Binance, Coinmama and Bittrex are all well-known exchanges and may be safer than some other options.Be aware that you may not be able to buy ADA directly.
Some exchanges, like Binance, require that you trade another cryptocurrency for ADA.There’s an easy workaround and Binance offers some of the best liquidity in the cryptocurrency market.The Hong Kong-based exchange has more traders than the population of Hong Kong itself.
Step 3: Fund Your Account
You may have one of several options to fund your account, depending on which cryptocurrency exchange you choose.Some exchanges support ACH bank transfers or wire transfers.However, you’re more likely to encounter exchanges that accept cryptocurrency deposits or purchases by credit card with newer cryptocurrencies like ADA.You can deposit Bitcoin (BTC) or Ethereum (ETH) with Binance and then use your balance to trade for ADA.
Don’t have any BTC or ETH or prefer not to part with your holdings? You can also purchase BTC or ETH from Binance and then trade for ADA.
Expect to pay 3.5% or more to purchase cryptocurrencies via credit card.
Trading fees may also apply and can vary depending on which exchange you use or based on the size of the transaction.If you buy Binance coins, Binance’s own cryptocurrency, you can reduce the cost of trading by as much as 50% by using Binance coins to pay trading fees.
Step 4: Trade for ADA
Assume you’re on an exchange where you can’t buy ADA directly with dollars, which is likely.You’ll find that ADA is traded in pairs with other cryptocurrencies.Many crypto exchanges operate similar to forex markets, where fiat currencies trade in pairs.
You’ll want to familiarize yourself with the types of orders available.
Much like buying stocks, you can use limit orders, market orders or stop-limit orders.Because cryptocurrencies move quickly and because some exchanges may not have many traders, consider using limit orders to avoid buying or selling at an undesirable price.Market orders, in particular, can erase your gains or leave you with a purchase price higher than the current trading range.
Don’t forget to transfer your ADA to a wallet if you don’t need to trade it again on the exchange.
You may also wish to use a cryptocurrency portfolio tracker to keep tabs on your investments if you hold more than one type of cryptocurrency.Crypto apps can also help you keep up on news or market changes for your favorite cryptocurrencies.Should You Buy Cardano?
Cardano has proven itself capable of some spectacular price runs.If you time your trades perfectly, Cardano’s performance in early December of 2017 to early January of 2018 would have multiplied your investment by over 10 times.Pricing can be volatile.Viewing Cardano as both a platform and a cryptocurrency, there are pros and cons to investing in Cardano’s ADA coin.
There’s money to be made in short-term trades, but a longer-term investment in ADA is a bet on the viability of the Cardano project and on the Cardano team’s execution.Pros Cardano is developed from the ground up: Rather than making a fork of an existing project, Cardano is being developed with specific goals in mind and is written in Haskell using optimized open source code designed to meet the goals of the project.Founded by Charles Hoskinson and Jeremy Wood: Cardano’s founders are both veterans of the Ethereum project and founded IOHK in 2015, heading a team of 200 contractors and employees, dozens of which have doctorate degrees.
Layers: Cardano is built in layers and separates transactions from data.This unique structure allows changes to the code as soft forks and avoids the damaging market disruption common to hard forks as has been seen with other cryptocurrencies.Open source coding promotes interoperability: The Cardano project has a long-term view that includes the ability to communicate with other blockchains and open-source coding helps promote development in line with that goal.Proof of Stake (PoS): The Cardano team has chosen to use proof of stake to verify transactions on the network as opposed to the slower and less efficient Proof of Work protocol found with other cryptocurrencies like Bitcoin and Ethereum.Cons Slow development: Slow and steady can often result in reliable code and a well-thought-out platform.However, the blockchain space moves quickly and even promising projects can suffer from a lack of investor interest if there aren’t fast results.Cardano’s measured pace may affect the value of the ADA coin in the short term.
Centralization: While not completely centralized, a limited number of block validators makes Cardano much less decentralized than some competing cryptocurrencies.
Using fewer block validators increases speed and efficiency, but removes the advantage of democracy, which can affect developer interest.Volatility: It’s easy to point to price charts indicating wild upswings in the value of ADA or most cryptocurrencies, but what goes up sometimes goes down as well — and it can happen fast.One hundred dollars invested in January 2018 would be worth $5 today .Liquidity: ADA can bring liquidity concerns to U.S.
traders because trading is available on fewer platforms than more established cryptocurrencies like Bitcoin or Ethereum.You’ll need a willing buyer if you need to sell your ADA, which may be more difficult to find a desirable price.Cryptocurrency markets can change quickly.Buying Cardano as a Trade or Investment
The Cardano project is an ambitious undertaking and 2 years into the project, there’s still work to be done to realize the goals laid out in the Cardano roadmap.
There are short-term profit opportunities available with any actively traded cryptocurrency, including ADA.Cardano’s goals may require a bit more patience.However, if the project is successful, based on today’s price for ADA, there’s plenty of room for your investment to grow.A limited number of ADA coins can create upward pressure on prices in the future, but much like the tech stocks of 2000, the cryptocurrency market may only have a few long-term success stories.As with every type of investment, invest some time doing research before you invest your money.Related Articles .