eToro, one of the largest social investing platforms has recently published a market research report on Cardano, the blockchain powering the cryptocurrency ADA, and the ADA coin itself. The report is a useful insight for investors, especially in light of Cardano’s often complicated scientific and philosophical ethos.
The report helps to illustrate the potential of Cardano and ADA as an investment. CoinJournal reached out to Mati Greenspan, renowned and Senior Analyst at eToro for additional insight.
“If this works out, it can be huge. Think Windows or Android. There are no guarantees but it certainly has the potential,” said Greenspan.
The report includes a technical outline of the project as well as detailing investment risks.
Charles Hoskinson, founder and CEO for Cardano also co-founded the Ethereum blockchain with Vitalik Buterin. A graduate of Mathematics, Hoskinson focuses on developing the technology behind the Cardano blockchain.
Cardano is a powerful smart contract platform which could help to lead the blockchain space into the third generation of blockchain technology, Blockchain 3.0.
Michael Parsons is the Chairman of the Cardano Foundation. Parsons has 25 years of experience in the banking industry and was one of the earliest advocates of Bitcoin.
Like other similar second-generation blockchains, Cardano is a smart contract blockchain also able to host and deploy decentralised applications (Dapps).
Though the third generation of blockchain, has yet to be truly defined, Cardano is very certainly a part of it. Cardano technology and its development and application is far more important to the Cardano team and founders than the price and trading of ADA.
That doesn’t make it a bad investment, Cardano is a long-term project which if successful could considerably influence global technology for some time. On this basis, it’s a potential long-term investment.
Third generation blockchains aim to create more scalable and sustainable networks, that can work together, while still maintaining the privacy, security, and governance of other successful and established blockchains.
Cardano is different to Bitcoin or Ethereum. Both older networks use a Proof-of-Work (PoW) protocol to achieve consensus and verify the network. PoW needs cryptocurrency “mining,” the algorithmic processing of transactions using computer hardware.
Cardano’s blockchain is actually based on Ouroboros, a Proof-of-Stake (PoS) technology that is about proof of ownership rather than mining.
“Instead, blocks are generated by stakeholders, which are those users that hold a certain amount of tokens,” explain eToro. “Cardano claims to be the first blockchain implementing a provably fair Proof-of-Stake consensus algorithm.”
The Cardano team are working currently on digital wallets and multi-signature accounts, as well as a new version of the blockchain “Shelley” which will implement improvements and progress the PoS model.
Valuing ADA and Cardano
“It is particularly difficult to perform an accurate valuation analysis of Cardano in
its present state, because the network is still in a very early stage and some of the
parameters defining its performance are still unknown or may change significantly in
the near future.” eToro.
Cardano’s background and ethos is deeply embedded in the technology. The development team is focused on improving the capabilities of the blockchain and Cardano has yet to develop the global partnerships and use cases like those of the Ethereum and Hyperledger blockchains.
“For now, investors in ADA are backing a highly-respected and experienced team
with some very big ideas.”
CoinJournal asked Greenspan for his opinion on Cardano/ADA to help investors gain perspective on the ADA cryptocurrency and its potential value.
CJ: “Given Cardano is still very much in development stage right now, what progression will impact the price of the Cardano token and when? For example, the move to Shelley, adoption by pharmaceutical companies moving from Ethereum, or the creation of Cardano based applications?”
MG: “Yes, all of the above. Any advancement of the network, especially ones that increase investor or developer interest should influence the price.”
CJ: Cardano has big plans and a very philosophical and scientific ethos. The development of the technology is more important to Cardano than coin price (Cardano admit this!). Considering this, how should investors approach Cardano? Should this concern or reassure investors?
MG: “Early adopters of bitcoin weren’t exactly looking for ROI. The same applies here. Early adopters will generally be ones with an interest in the technology and its applications. For investors, it pays to keep an eye on this one and to possibly add a small amount to any well-diversified portfolio.”
CJ: “Considering Cardano’s very credible structure, team, and technology could it in your opinion a) one day achieve the equivalent price of bitcoin b) overtake ethereum both in price and as the smart contract blockchain of choice for enterprises and organisations?”
MG: “Bitcoin?… no. Cardano is not in competition with Bitcoin and I highly doubt that the price per ADA token would ever surpass that of BTC. Ethereum…. perhaps. We’ll see how it goes.”
CJ: “What kind of trading volume, trends, interest, or activity does eToro see right now with Cardano?”
MG: “As with all the crypto assets we offer, the interest for Cardano is incredibly high. Especially in the last few days, we’ve seen a huge amount of comments on ADA’s market page. As you can see, our clients are very excited about this one.”
eToro’s report is clear, trading cryptocurrencies can be profitable but it’s also challenging, requires some knowledge, and carries a significant level of risk.
Investors should assess their goals, methodology, and level of experience, advise eToro. It also recommends a diverse portfolio, using cryptocurrencies as an “additional element” of a portfolio, and never to invest more than you can afford to lose.
eToro’s full market report can be found here.