I'm currently in the market for another 'major' crypto project to diversify into - I'm quite happy with my current Bitcoin and Ethereum holdings, but am also sensitive to the limitations of both - namely the fact that Bitcoin has minimal utility on its own and Ethereum now has Binance Smart Chain and (frankly) Hive as viable competitors that perform the same functions for significantly cheaper fees.
One viable candidate for me to diversify into is Cardano. I already have some, but I've ignored it to date as I've been focussing on buying alts lower down the order, but I'm in the mood for diversifying into something 'mainstream' so I decided to dig a little into it.
Long story short, I like what I see and at the current prices I'm happy to accumulate some more ADA, over Bitcoin especially as I think there's much more upward potential for its price.
Cardano is currently the 5th largest crypto currency by Market Cap, and it's been up in the top 10 for a very long time, and it doesn't seem like it's going to lose value going forwards.
Cardano - The Ethical Blockchain?
It's a Proof of Stake Blockchain that has an explicit power-redistributive ethic s its core message, which really appeals to me. The aim of Cardano is to....
Redistribute power from unaccountable structures to the margins to individuals” — helping to create a society that is more secure, transparent and fair.
Cardano also makes a lot of the fact that its Proof of Stake consensus mechanism is a lot more energy efficient than Bitcoin's Proof of Work model, and while this is true of any POS chain (such as Hive) Cardano seems to be making the most of using this fact as a marketing tool, something that's especially sensible given Elon Musk's recent (hypocritical) stirrings about BTC's excessive energy consumption for mining.
Cardano also claims to be 50-100 times more decentralised than 'other major blockchains' - I'm not sure what this means exactly - more centres running the nodes probably - but its in line with its ethos to redistribute power 'from the centre to the margins'.
Cardano - A chain focussed on utility
The Cardano Website offers up a number of applications that can be built on the blockchain, primarily based around identity verification for the following sectors:
- Education - the issuance of qualification certificates
- Retail - counterfeiting protection
- Agriculture - supply chain verification.
All of this seems to be being rolled out by one company - IOHK although I failed to find any links to anything actually up and running yet!
Decent tokeneomics and staking rewards
Cardano has a a Max Supply and 70% of coins already printed.
This is something I tend to look for in a long term Vest (and it bothers me that Hive doesn't have a max supply btw) - a max supply, and Cardano has that, with the majority of tokens already minted, so minimal inflation going forwards.
And if you choose to run a staking pool, you get a 25% annual return, so there's a decent incentive for larger stakeholders to lock up their ADA.
And for smaller investors there are also plenty of 'sensible return' staking options available on numerous DEFI platforms, so lots of potential to lock up ADA going forwards too.
Final thoughts - it looks like a reasonably safe Vest
The economics look good, the tech looks good, the ethics look good, and ADA seems to offer a lot of utility compared to BTC and ETH.
It doesn't offer anything spectacular, it's just one of those 'boring but important chains', at leas that what it seems to be to me, perfect for a long term hodl.
I think for me ADA is a gradual buy-in, especially while the price stays below $2 for sure.