Can Cardano displace Ethereum?
Cardano is one of the preferred cryptocurrencies with long-lasting staying power. Its ADA coin sits comfortably in the top ten cryptocurrencies ranked by market capitalisation. It’s actually been in this top ten ranking since its launch in 2015. Today it’s in sixth place after Bitcoin, Ethereum, Binance Coin, XRP and Tether. But the landscape is volatile, and only a few weeks ago it was in third place. So things change rapidly.
Cardano blockchain – Photographer: fabio | Source: Unsplash
What is Cardano?
Cardano certainly has several good things going for it. Its technology is superior to many of its peers, and it has strong community backing.
ADA is the digital currency associated with the Cardano platform. It’s named after Ada Lovelace, the world’s first computer programmer.
IOHK (Input Output Hong Kong) is the research lab behind Cardano. Its focus is on decentralization and the challenges it poses to existing global financial systems. The Cardano development team are academics and scientists, and they work closely with academia to have everything peer-reviewed and transparently shared. The Cardano Foundation and EMURGO, along with IOHK govern Cardano.
Is ADA a coin or a token?
ADA coin is the name of the cryptocurrency that’s used on the Cardano platform. But ADA tokens can be used to vote or for staking in the Cardano ecosystem.
Within digital currency wallets, such as Exodus or Daedalus, you can easily stake Cardano ADA for rewards. Once you stake your ADA coin, it becomes an ADA token, which is then used to mine for ADA. If you find some, you’re rewarded with a stake.
Staking is a popular practice among altcoin owners. It is the proof-of-stake (PoS) part of the blockchain network that Cardano is striving for. And this is being developed into a decentralised application (DApp) development platform, complete with multi-asset ledger and verifiable smart contracts.
Last month Graph Blockchain Inc. (CSE: GBLC) invested $300,000 into Cardano for the purpose of staking the ADA coin.
Meanwhile, over half a billion US dollars worth of ADA is currently being delegated to charity-focused initiatives on Cardano through mission-driven stake pools.
Cardano is for the greater good! We are delighted to share that over US$500,000,000, yes, half a billion U.S. dollar worth of ada is currently being delegated to charity-focused initiatives on Cardano through mission-driven stake pools.
Read more https://t.co/9l55kBRGtv — Cardano Foundation (@CardanoStiftung) March 31, 2021 Cardano’s charitable focus – Staking ADA for charity
Why Cardano could replace Ethereum
Cardano is a smart contract platform, as is Ethereum and Polkadot. Many die-hard Cardano fans believe it will eventually displace Ethereum thanks to its high-speed tech and fee free transaction setup.
Ethereum’s value has soared this past year as more high-profile clients jump aboard. Ethereum is also the backbone of the non-fungible token (NFT) marketplace, which has been subject to NFT mania this year, further boosting the Ethereum price.
And Ethereum is also profiting from notable decentralized finance (DeFi) projects which are built on its blockchain. However, Ethereum is expensive to use, and its transaction times suffer from lag. Cardano intends to beat it on both these counts, due to its lightweight design.
Cardano recently undertook a major update called ‘Mary’ which took it a step closer to emulating Ethereum. The Mary upgrade is a hard fork, transitioning the Cardano ledger. This changes its capabilities from simply holding ADA on its blockchain to allowing multiple tokens to be created and exchanged.
WE’RE ON!! We can today confirm that the ‘Mary’ #Cardano protocol update is now fully confirmed for March 1st.
Another key milestone in the #Goguen rollout, the update introduces native tokens & multi-asset support, bringing exciting new use cases for #Cardano 1/3 pic.twitter.com/FFK0cGNbmD — Input Output (@InputOutputHK) February 24, 2021 Cardano’s Mary hard-fork Goguen rollout
This allows it to support stablecoins and users to create NFTs.
Who founded Cardano?
Cardano was in fact founded by none other than one of Ethereum’s original co-founders. Charles Hoskinson stepped out on his own a year after Ethereum was launched in 2013.
He believes Cardano has the potential to help billions of people thanks to its laser focus on the vision of helping people achieve a better quality of life. By building Cardano on DeFi, it’s targeting some of the poorest, hardest hit regions of the world. Hoskinson believes that proving the technology works in places that are close to being deemed a lost cause, will allow its success to speak for itself. This should naturally bring mass adoption elsewhere.
Access to fair and transparent banking has the power to lift millions of people out of poverty to a sustainable level of living. However, with no access to electricity or smart phones then using crypto is impossible. That said, there are many areas of the world where it could make a real difference. So, the kind of customer Cardano is targeting may be a farmer in Ethiopia looking for a way to pay for fertiliser. Or on a larger scale, implementing a fair election process in Senegal. The company has people in these African countries working with the locals to move forward with its vision.
ADA’s price fluctuations
ADA’s price is up 16% in a month and an eye-popping 3,557% in a year.
So what makes its popularity stick? There are three principal reasons. Being widely available to trade is a big one. Coinbase began supporting Cardano (ADA) in mid-March and around the same time, it appeared on the Bloomberg Terminal. This has certainly helped boost its popularity. With a market cap above £40m, it’s also a highly liquid market and institutional investor interest is readily growing.
Ethereum is up 115% year-to-date. Meanwhile, ADA is up 517% year-to-date.
Cardano is operating a low fee, secure, trusted, blockchain system. It aims to provide a balanced and sustainable ecosystem. So, while this continues, Cardano’s ADA is likely to remain a popular cryptocurrency easily rivaling Ethereum and Polkadot.
Ethereum (ETH): What It Is, What It’s Worth and Should You Be Investing?
The Conversation
A Target in Sheridan, Colorado, was very low on paper towels in November 2020. AP Photo/David ZalubowskiWhen the Ever Given container ship choked off traffic in the Suez Canal for almost a week in late March 2021, it made big headlines around the world. The price of oil rose, and companies fretted as hundreds of ships carrying everything from coffee and cattle to toys and furniture were delayed. Experts estimated that every hour traffic remained stuck cost the global economy over US$400 million in lost trade. Yet many people I spoke with, including students and professional colleagues, didn’t seem to have a clue about what was happening, why it mattered or how it affects them. As a supply chain expert, I was truly surprised. If nothing else, the COVID-19 pandemic should have made it abundantly clear how easily a disruption in the supply chain or a sudden increase in demand for a product can lead to empty grocery store shelves and other problems that might directly affect you. Without a change of course, I expect this problem to only get worse. Supply chain strains The pandemic revealed that even simple supply chains, such as that of toilet paper and hand sanitizer, can easily break in the face of disruptions. The same was true with food, personal protective equipment, pharmaceuticals and ordinary household items, which all suffered from severe shortages that lasted for months into the pandemic. Pandemic-strained supply chains are now creating a global shortage of semiconductors, a component used in a wide variety of consumer goods, from Samsung smartphones and Apple laptops to Ford Explorers and Sony PlayStations. Virtually every piece of electronics needs a chip, and the supply chain is much more complex than for toilet paper. The Suez Canal blockage that began on March 23, 2021, and lasted six days exacerbated these already stressed supply chains. Even though traffic is now running smoothly through the canal, the jam is still causing massive ripple effects and delivery delays – even toilet paper could once again be in short supply. It may take up to 60 days for the supply chain system to reset itself to where it is functioning close to normal. That means consumers will continue to feel the impact of these problems for months to come as well. The Ever Given was stuck for nearly a week, snarling global supply chains. Suez Canal Authority via AP Lean and mean The fundamental problem behind each of these disruptions is simply the inability of modern supply chains to adjust when something goes wrong, even briefly. A big problem early in the pandemic, for example, was simply a lack of flexibility. While consumers were having trouble tracking down toilet paper because of panic buying and hoarding, there were plenty of rolls sitting in warehouses but intended for offices and restaurants. Companies had trouble diverting the toilet paper to the retailers, which kept only a very lean inventory of the product. Supply chains for this and most every other product have been increasingly designed to be as lean as possible in terms of cost and efficiency, rather than resiliency. As customers demand ever cheaper products delivered faster, supply chains have given up every bit of slack. As a result, a disruption of any magnitude creates significant consequences through product shortages and rising prices. It’s easy to think of a supply chain like it’s a linear conveyor belt, as disparate parts turn into a product that is then shipped around the world to your door. But it is more like a massive intertwined highway system. Consider the path and massive disruption caused by shortages of a simple chip, known as a display driver. Its only purpose is to convey instructions for illuminating a digital screen like the one on your phone, laptop monitor or navigation system in your car. There is a huge shortage of the chips – caused by supply problems and soaring demand. And this in turn has triggered a shortage of liquid crystal display panels, as well as a jump in prices, forcing automakers, airplane manufacturers and refrigerator makers to all scale back production. All because of a shortage of a $1 chip, in part triggered by minor disasters like the recent winter storm in Texas and a fire in Japan. And a problem like the Suez Canal traffic jam is even worse because it is represents an intersection – and bottleneck – for so many supply chains, including oil, parts and finished products. As cargo is shipped, there is a complicated choreography of vessels, ports, distribution centers and other modes of transport. Modern supply chains resemble a massive set of intertwined highways more than a simple conveyer belt. AerialPerspective Works/iStock via Getty Images A little more slack The obvious solution is to add resiliency or slack into supply chains – to expect the unexpected. This would require moving away from aggressive “lean systems” that have virtually no excess inventory. It doesn’t have to be terribly costly. As my own research shows, companies need only selectively add extra inventory, suppliers and capacity for certain critical items or at key chokepoints, such as for products identified as being in short supply, where there are few suppliers or where lead times are extra long. For example, coffee roasters generally do not have inventory to handle a two- or three-week delay. Delays in shipping raw beans from Brazil and the Ivory Coast to Europe due to the Suez blockage mean consumers will likely soon experience the impact of a lack of coffee availability in stores and cafés. This is not a recommendation to stock huge amounts of inventory. Rather, it is to say that there are advantages to being highly strategic – almost surgical – to ensure that the greatest resiliency can be achieved with only a small amount of additional slack. Otherwise, the trends that led supply chains to become so lean and efficient will likely continue, leading to more and bigger disruptions for the global economy and more shortages and higher prices for consumers like you. [Insight, in your inbox each day. You can get it with The Conversation’s email newsletter.]This article is republished from The Conversation, a nonprofit news site dedicated to sharing ideas from academic experts. It was written by: Nada R. Sanders, Northeastern University. Read more:The toll and toil it took to cleave the Suez Canal through the Egyptian desertToday’s global economy runs on standardized shipping containers, as the Ever Given fiasco illustrates Nada R. Sanders does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Why Ethereum Lacks Support At $2,000, Chainalysis Report Shows
Ethereum (CRYPTO: ETH), the second-largest cryptocurrency by market cap, reached an all-time high of $2,151 earlier this week but has struggled to find support above $2,000.
What Happened: According to a market intel report from Chainalysis, the cryptocurrency’s cost curve suggests that Ethereum’s peak price has a narrower base of support than Bitcoin (CRYPTO: BTC)’s peak price. The strongest level of observed demand for Ethereum (ETH) was at $1,800.
Chainalysis chief economist Philip Gradwell analyzed the cost of acquiring data for the digital asset to determine the demand, and thereby support, at different price levels.
Gradwell observed that similar to Bitcoin, the Ethereum market has changed radically in recent months with a significant increase in the cost of acquisition for 50 million ETH out of a total supply of 115 million.
Why It Matters: The chart above shows the U.S dollar cost of acquisition of Ethereum held on 5 April 2021.
According to the chart, a very large amount of Ethereum is held by entities that acquired it at around $1,800.
Comparatively, the amount of ETH acquired above $1,850 is much smaller, with around 700k being acquired at a total of $1.4 billion.
According to Chainalysis, this means Ethereum’s all-time high price of $2,151 was some way above a large level of support and suggests that the peak was driven by a relatively small amount of demand.
However, Gradwell did note that “Support at $1,500 is particularly strong, with 33.3M ETH acquired above this level at a total cost of $58 billion.”
The economist also pointed out that cost curves since 2016 show that after the 2017 crypto bull run, only a small cohort of ETH buyers continued to hold despite subsequent losses.
“This supports the concern that the highest ETH prices tend to have a narrow base of support, at least compared to bitcoin,” he said.
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