Cardano is competing to be the leading platform for building and operating decentralised applications (dApps). Cardano has a native cryptocurrency that’s also known as ADA, which is used to incentivise activity to make Cardano run and also as a way to invest in its future.
ADA has a capped supply of 45 billion, which means that no more ADA coins will be created once this amount is in circulation. This adds an element of scarcity to ADA that its supporters argue also makes it a good store of value.
What makes Cardano unique?
Cardano is sometimes referred to as the next-gen Ethereum, because it uses a new way of verifying transactions and activity known as ‘proof-of-stake’, which Ethereum also recently transitioned to.
This means that participants instead of miners competing to validate transactions as with Bitcoin, randomly-chosen winners that have ‘staked’ ADA are awarded the opportunity to verify transactions in a lottery-like system and are rewarded with ADA coins. Its supporters argue that this makes it faster and more environmentally friendly, as large amounts of computing power isn’t required in its creation.
Cardano is known for its academic, research-based approach to rolling out projects on the Cardano blockchain, but while this approach ensures scientific precision in all it does, it has in the past been criticised for leading to the slow development of its services and products over the years.