Cryptocurrency users may have noticed that a new coin has appeared in the top 10 by market capitalization all of a sudden. This currency goes by the name of Cardano, yet very few people have any idea¬†as to what this project is all about. That in itself isn’t exactly surprising, as this project is still relatively new. Now is a good time to¬†explore what makes this blockchain project so appealing to the people pumping the ADA price.
Cardano is the new Hype
In the world of cryptocurrency, pump-and-dump cycles are nothing new under the sun. Virtually every currency ever created will have its 15 minutes of glory before disappearing into obscurity. Cardano may¬†very well be on this list, as it is going up in value like a rocket without any valid reason. Especially considering that there are close to 30 billion tokens in circulation right now, it is evident this price trend can’t be sustained for more than a few days at best.
That aside, now is a good time to look at what Cardano attempts to do. Creating a new decentralized blockchain and cryptocurrency project doesn’t warrant such a massive price pump unless there is some solid technology to back it up. Right now, ADA is only generating volume on the Bittrex exchange, which¬†essentially¬†added a token few people know or care about at this point in time.
The¬†project¬†aims to establish a smart contract platform focusing on “more advanced features”.¬†Moreover, the team claims this¬†to be the first blockchain platform to have evolved out of a scientific philosophy and a research-driven approach. Whether or not that is a big selling point for most people remains to be determined. Under the hood, this currency¬†utilizes the Ouroboros algorithm, which is a “provably secure proof of stake” implementation. This means that consensus is reached based on this algorithm. Proof of stake algorithms have a history of being insecure, unreliable, and insufficient. Whether or not Ouroboros can successfully buck this trend remains to be seen.
Additionally, Cardano’s team¬†plans to build a wallet capable of running decentralized applications on the blockchain.¬†It’s an interesting approach, although it’s nothing we haven’t seen before either. Assuming¬†that goes well, there are¬†more planned¬†developments ahead. Further performance enhancements are scheduled, as well as an improved¬†level of scalability and assurance. It will be interesting to see how this project evolves in the future, yet it is still unclear why there is such a major demand for ADA right now other than pure speculation.
More specifically, given the¬†total supply of over 31 billion tokens and Cardano’s current valuation of¬†US$0.146, this currency is well-positioned to¬†attain¬†a market capitalization of¬†US$5 billion¬†in the next few days. That’s a somewhat worrisome development, as most people will look at Cardano as another pump-and-dump currency.
It’s highly doubtful that¬†people will still be¬†referring¬†to Cardano as a top cryptocurrency in a few weeks. The project certainly has some interesting aspects, but there will always be concern¬†about such a sudden and rapid price increase.