Cardano (ADA) - All you need to know
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Ways to invest in Cardano
Sign up with a broker that’s regulated in the UK or a cryptocurrency exchange for a fast and easy way to invest in Cardano. Those platforms let you buy and hold coins for the long term, or trade them quickly to try to turn a profit.
For a bigger menu of options, read on to learn what other ways of investing are open to you. The links below take you to individual pages which provide lots more details on how to navigate the process.
Cardano is a cryptocurrency project and ADA is its native token. It uses a proof-of-stake (PoS) consensus mechanism to record and validate transactions.
- Cardano is a cryptocurrency project with its own blockchain like Bitcoin, Ethereum, and Binance Coin. However, it differs in that it uses proof of stake (PoS) to verify transactions.
- PoS is a method by which Cardano users verify data on the blockchain by staking: putting their coins in escrow and checking a block of transactions is legitimate.
- ADA tokens can be staked for rewards, much like BTC can be earned by mining.
What is Cardano?
Cardano is a cryptocurrency project, and its native token is ADA. It utilises blockchain technology, which is like a large decentralised ledger, to allow transactions to be recorded and verified without the need for a central governing authority like a bank.
Unlike the most valuable cryptocurrency, Bitcoin, which uses a proof-of-work (PoW) mechanism, Cardano uses a PoS consensus known as Ouroboros. Cryptocurrencies that rely on PoW are far more energy-intensive because their blockchains are maintained by computers competing to solve complex equations – a process known as mining.
The main benefits of Cardano over its crypto rivals are heightened scalability, reduced energy consumption and enhanced safety. The platform’s long-term ambition is to accomplish a ‘more balanced and sustainable ecosystem’ that allows mainstream financial institutions like banks to successfully integrate with the network.
Cardano now sits firmly in the top 5 most valuable cryptocurrencies by market capitalisation, and some feel it has the credentials to climb even further, launching an offensive on crypto’s most prized names.
A brief history of Cardano
Cardano has had an interesting journey since its inception. Below, we have outlined some of the key events in its journey to becoming one of the biggest cryptocurrency projects.
- Development of the platform began in 2015.
- In 2017, Cardano was launched via an initial coin offering (ICO) by a co-founder of Ethereum, Charles Hoskinson, who left Ethereum after a dispute with fellow co-founder, Vitalik Buterin.
- By the end of 2017, Cardano was worth $10 billion, having been worth just $600 million at the time of its ICO.
- Over the course of the next few years, Cardano announced development partnerships with New Balance, the Ethiopian government, the Ministry of Education in Georgia, and the University of Edinburgh in the United Kingdom.
- Today, it is one of the most valuable cryptocurrencies on the market, and its ADA staking facility offers substantial rewards for investors.
How does Cardano work?
Cardano uses a consensus mechanism to create a platform that can reach a global audience. A consensus mechanism just means that each new transaction has to be approved by a majority before it’s added to the blockchain. This is similar to how Ethereum works, but the Cardano twist is that it’s developed a code called Ouroboros that operates a bit differently.
While Ouroboros is complicated, the main thing you need to know is that anyone who holds ADA coins can be involved in the process and earn rewards. On Cardano there is a series of ‘pools’ and Ouroboros selects one at random each time it wants to verify a transaction. If you own ADA, you have the option to add some coins to one of these pools. Once the process is complete, the pool earns new ADA as a reward which is then handed out to anyone who contributed to the pool.
One of the defining features of Cardano is that all of its updates are peer-reviewed before release. This means that all of the research and development goes through a vigorous academic back-and-forth before it goes live. Although most cryptocurrencies write up how they work in whitepapers, Cardano leans into this extra layer of scientific approval to give its platform a vote of authority.
How to invest in Cardano
Before you start investing, it’s a good idea to be familiar with all the options available. Below you’ll find a list of methods you can use:
- Crypto brokers. An online broker is usually the best way get started, where you can get Cardano coins quickly and easily. A broker must be regulated with the Financial Conduct Authority (FCA) in order to legally operate in the United Kingdom. Make sure to choose a broker that has FCA approval and which delivers superior customer service, an intuitive trading platform, and competitive transaction fees.
- Exchanges. Exchanges tend to offer a wider range of coins and more options to swap between them. Just be aware that some might make you use another cryptocurrency, like Bitcoin, to swap for other coins, rather than using fiat currency like GBP. Look for a reputable exchange that executes transactions seamlessly and securely and allows you to trade a variety of different cryptocurrencies.
- Investment trusts. An investment trust is a closed-end investment strategy that’s available to UK investors. Closed-end means there is a fixed number of shares in the trust, so your percentage of the total holding will always stay the same. Some trusts invest in cryptocurrency and you can look around to find one that has exposure to Cardano.
- Debit cards. A crypto debit card is a method of purchase that allows you to make purchases with cryptocurrency, just as you would with Sterling. Some cards are available in the UK already, with firms like Wirex and Nexo offering the best cards available right now.
- Crypto wallets. A wallet allows you to store and track your Cardano coins securely. Many crypto wallets have expanded their range of functionality recently so that you can trade from within the wallet itself.
Where can I buy Cardano in the UK?
Latest Cardano price analysis
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