Cryptocurrency has boomed in recent months, with major cryptocurrencies like bitcoin gaining increased interest. Cardano is another cryptocurrency that has come under the spotlight recently, but unlike bitcoin, Cardano is considered an altcoin.
What is Cardano and why is it an altcoin?
Nick Jones, CEO and Co-Founder at Zumo, Scottish crypto wallet, told Express.co.uk that Cardano is just one example of many different altcoins available on the cryptocurrency market.
Mr Jones said: “In the cryptocurrency space, an altcoin refers to any digital asset that is not bitcoin.
“Bitcoin dominance – the value held in bitcoin as opposed to the total value of the entire cryptocurrency market – currently stands at 46.22 percent.
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“In other words, bitcoin accounts for almost half of today’s crypto market, leaving just over half to the bitcoin alternatives, or altcoins.”
Examples of altcoins that have gained attention in recent months include Cardano, Ethereum and Dogecoin, the latter of which has been referenced frequently in tweets by Tesla CEO, Elon Musk.
But like all cryptocurrencies, Cardano and other altcoins are considered high-risk and are known for being volatile.
Mr Jones added: “Cardano is an example of one of these altcoins. It was founded in 2015 by Ethereum co-founder Charles Hoskinson.
“Like bitcoin or Ethereum, Cardano has its own separate blockchain, or network for processing transactions.
“It is claimed to be the first blockchain platform developed based on peer-reviewed research, and is targeting a broad range of use cases across education, retail, agriculture, government finance and healthcare.
“Cardano has captured public attention for a couple of notable reasons. First, it has stated an emphasis on inclusivity and positive global change.
“Founder Charles Hoskinson has a particular interest in Africa, and one recent example has been Cardano’s involvement in Ethiopia, where the Ethiopian government will be using the Cardano blockchain to track student performance.
“Cardano is also viewed by some as an ESG-friendly blockchain. This is because it operates on a proof-of-stake mechanism that is said to require less energy and computing power than bitcoin’s proof-of-work algorithm.
“Like Ethereum, Cardano will also incorporate smart contracts – computer programs stored on the blockchain that automatically execute when specific conditions are met, opening up a range of practical applications.”
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Cardano’s price on Wednesday was a significant drop from its price a week prior.
On July 7, Cardano had a price of $1.43 (£1.03), before dropping on July 10 to $1.32 (£0.954169).
The information in this article does not equate to financial advice.
Anyone considering investing in cryptocurrency should understand the risks involved.