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Representations of the cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on the PC motherboard in this illustration from June 29, 2021. REUTERS / Dado Ruvic / Illustration
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NEW YORK, September 3 (Reuters Breakingviews) – Bitcoin and Ether beware. Cardano cryptocurrency platform first broke its ADA token above $ 3 on September 1, just weeks after becoming the world’s third largest virtual tender. While its total value at that price of $ 96 billion is roughly one-fifth the value of the Ethereum currency and one-tenth the peak value of Bitcoin, number 3 has doubled in a month, according to Coinbase.
Cardano differs from its bigger cousins in that transactions are verified with “Proof of Stake”, which rewards ownership, rather than “Proof of Work,” which rewards effort. The former uses much less energy. Ethereum is switching to Proof of Stake, but maybe not for a year or two. On the other hand, Cardano is less suitable for so-called smart contracts, which automatically execute certain agreed actions until they are revised later in September. Another difference is that Cardanos ADA is limited, like Bitcoins, but unlike Ether.
Crypto believers can easily hedge their bets by investing in all of them. But Cardano’s rise shows how space is evolving – collectively. Newcomers from Polkadot to Iota each have some advantages that others don’t. Variations go in the thousands. Cardano’s success could be fleeting as copycats take its allure and build on it to create more appealing alternatives.
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Those with long memories may remember Altavista, the search engine from the 1990s that introduced innovations such as website translation. It stormed ahead until Google wiped it off the map, in part by piggybacking the advances of its predecessors. A dollar invested in Google’s ancestors might have been wasted, but without it, search wouldn’t be what it is today. This is also the paradox of crypto: only if today’s investors lose wealth will the sector deliver sustainable wealth.
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CONTEXT NEWS
– Cardano, a public blockchain platform, hit a record $ 3 for its virtual currency ADA on September 1st. According to Coinbase, it achieved an overall valuation of 96 billion US dollars, making it the third largest cryptocurrency after Bitcoin and Ether.
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Editing by Robert Cyran and Amanda Gomez
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