A Beginner's Guide To Investing In Cardano's Ada Coin

Cardano (ADA) is a blockchain platform that allows the settlement of payments. It is a relatively new cryptocurrency that has been gaining traction among investors. One of its key advantages is its use of a proof-of-stake protocol, which is more energy-efficient than the proof-of-work protocol used by Bitcoin. Cardano also offers faster transaction times and lower fees than some of its competitors. However, it has been criticised for lacking the name recognition and real-world utility of more established cryptocurrencies. Before investing in ADA, it is important to carefully consider the risks and rewards and take a long-term outlook.

Where to buy ADA coin

ADA, the native cryptocurrency of the Cardano blockchain, can be purchased on several trusted global exchanges. Here are some of the top platforms where you can buy ADA:

Binance

Binance is a centralized exchange offering a wide range of cryptocurrencies, including Cardano. To buy ADA on Binance, you'll first need to open an account and verify your identification. The platform provides multiple payment options, such as debit/credit card, Google Pay, Apple Pay, and third-party payment channels. Binance is known for its low fees and robust security measures.

Coinbase

Coinbase is another popular and user-friendly exchange that lists ADA. It offers a simple interface, making it easy for beginners to navigate and purchase cryptocurrencies. Coinbase provides clear instructions on how to set up an account, verify your identity, deposit funds, and make your ADA purchase.

Uphold

Uphold is a highly regarded cryptocurrency trading platform that supports a vast array of assets, including ADA. It stands out for its variety of supported assets, offering over 200 cryptos, precious metals, and stocks. While Uphold's fees are not the lowest, its platform is straightforward and suitable for beginners.

EToro

EToro is an SEC-approved platform that offers ADA trading. It provides a comprehensive arsenal of analytical tools to aid your investment decisions. eToro supports various currencies for deposits, including fiat, stable coins, ETH, and Bitcoin. The platform also allows you to search for ADA, select your desired currency pair, and click the "Buy" button to make your purchase.

Kraken

Kraken is a trusted global exchange with a strong focus on security. It offers a wide selection of crypto assets and traditional currencies, including ADA. Kraken provides robust liquidity, allowing you to buy ADA with various currencies like USD, EUR, BTC, and ETH. The platform has a minimum order size of 25 ADA, making it accessible for those looking to gain exposure to ADA on a budget.

When purchasing ADA or any other cryptocurrency, it is essential to consider your investment strategy, conduct thorough research, and understand the risks involved. Remember that the cryptocurrency market is highly volatile, and the value of your investment can fluctuate significantly.

How to store ADA coin

When it comes to storing your ADA coin, there are several options available to you. Firstly, it is highly recommended that you avoid keeping your cryptocurrency on an exchange for longer than necessary and instead use a cryptocurrency wallet. There are two main types of wallets: hot wallets and cold wallets.

Hot wallets are connected to the internet and can be accessed at any time with the right keys. Examples of hot wallets include mobile wallets, software wallets, and funds stored on exchanges. While convenient, hot wallets are generally considered less secure than cold wallets due to their constant online connection.

Cold wallets, on the other hand, are offline wallets used for securely storing funds that do not need to be frequently accessed. Examples of cold wallets include hardware wallets and paper wallets. Hardware wallets are physical devices that store your wallet's private keys, while paper wallets provide you with a printed certificate that contains your private keys.

• Ledger Nano (Hardware Wallet): Ledger is a well-known producer of hardware wallets, offering both the Ledger Nano S (base model) and the Ledger Nano X (advanced model). The Nano S supports over 300 coins and tokens and connects to your PC via a USB cable. The Nano X offers additional features such as Bluetooth capability and the ability to install more apps.
• Trezor Model T (Hardware Wallet): Trezor is another popular hardware wallet option that supports Cardano's ADA coin, as well as hundreds of other altcoins. It connects to your laptop via a USB cable and features a colour touchscreen for authorising transactions.
• Daedalus Wallet (Desktop Wallet): Daedalus is the official wallet created by the Cardano developers. It is a full-node desktop client, meaning it downloads the entire blockchain and independently validates every transaction. Daedalus offers enhanced security and trustless operation, but it requires more storage space and can be more complex to use. It is available on Windows, macOS, and Linux.
• AdaLite Wallet (Web Wallet): AdaLite is a lightweight, user-friendly, and secure web-based wallet. It does not require any downloads, installations, or registrations, and your private keys remain only in your possession. However, web wallets are generally less secure than hardware or desktop wallets as they are susceptible to phishing attacks.
• Cardano Paper Wallet (Paper Wallet): You can use the Daedalus desktop wallet to generate a paper wallet, providing you with a printed certificate that stores your private keys. This form of cold storage is secure, but it comes with the risk of loss, theft, or damage, so it should be stored in a secure offline location like a bank vault.

Pros and cons of investing in ADA coin

Pros

• Great development team: Founded by Charles Hoskinson and Jeremy Wood, co-founders of Ethereum, Cardano gained a lot of popularity after its official release in 2017.
• Academic backing: Cardano is one of the few coins that has been reviewed by academics. This gives it a lot of credibility.
• Cardano uses multiple layers: By implementing a settlement layer and a computational layer, Cardano ensures unlimited scalability and quick transactions.
• Open-source platform: Cardano’s potential as a fully open-source platform with a code written in the Haskell programming language is also worth considering.
• Third-generation blockchain: Cardano is more reliable than other cryptocurrencies as ADA keeps overcoming challenges that other platforms have encountered.
• Cardano is secure: Cardano is a proof-of-stake protocol that ensures mathematically proven safety.
• Cardano can provide digital identity: Cardano can provide digital identity to unbanked citizens throughout the globe, especially in developing countries.
• Growing presence in Africa: In 2021, Cardano began working on their ‘Africa strategy’, where they plan to boost adoption across the continent by using it to solve real issues.
• Companies are ‘flocking’ to Cardano: The number of companies investing in Cardano is predicted to increase with the announcement of Cardano’s recent upgrade and the surge of Cardano’s price.
• Cardano is now listed on Coinbase: As of 16 March 2021, Cardano joined Coinbase, making it easier for more traders to purchase it and likely increasing trading volume.
• Cardano’s price increased by 720% in the first two months of 2021: This shows the kind of potential Cardano has.
• Proof of stake algorithm: Cardano was one of the earliest adopters of the proof-of-stake algorithm, which is more efficient, energy-efficient, cheaper and better for the environment than proof-of-work.
• Cardano can host assets without needing smart contracts: The Mary hard fork made Cardano a multi-layered blockchain and gave the platform the ability to host other assets on the Cardano blockchain from other blockchains and custom tokens, without needing to create smart contracts.
• Further upgrades are coming: Aside from the Mary hard fork, the Cardano team is planning on completing their Goguen update at some point. A step towards its completion was the release of the Alonzo Hard Fork in September 2021, which allowed developers to create and deploy smart contracts on the network.
• Cardano is now fully decentralised: As of April 2021, Cardano achieved 100% decentralisation. This is a major achievement that will likely add value to Cardano over time.
• Cardano price predictions for 2022 look positive: DigitalCoin estimates that Cardano could reach $1.51 in 2022, which is higher than WalletInvestor’s prediction of $2.68 by the end of the year.

Cons

• Cardano is still in development: Cardano is known as the ‘academic blockchain’ but it is still developing, and slowly. This is the biggest reason to be cautious of Cardano.
• Cardano wants to implement a voting system: An open voting system where upgrades can be proposed and voted for or against is an appealing factor, but token holders are not always tech-savvy and may vote for an unreasonable decision.
• Issues with its synchronisations between ledgers: Some critics claim that Cardano’s assumptions that ledgers will be synchronised at any given point of time are unrealistic for a global blockchain.
• Having multiple chains is now old news: When Cardano first appeared, the idea of multiple chains working together was brand new. Now, Cardano has to contend with many projects that also have multiple chains.
• Being technologically better does not speed up adoption: The Cardano team boasts about being technologically better than a lot of other cryptocurrencies out there, but that does not mean that any more people will rush to adopt it.
• Charles Hoskinson can be his own worst enemy: Charles Hoskinson can be a bit of a controversial figure, with some labelling him as egotistical, particularly when communicating to people online.
• 75% of all ADA tokens are staked: Numerous pundits believe that the primary reason why Cardano has risen in price so much in 2021 is that most ADA tokens have been staked and are not moving, creating scarcity.
• Highly suspicious marketing strategy in Japan: Cardano’s ICO was fraught with controversy in Japan, with claims they were targeting the elderly and were associated with several shady figures.
• High level of risk: Just like all other cryptocurrencies, there is a high level of risk involved in investing in Cardano. In Macroaxis’s analysis of Cardano’s volatility, it was summarised as “unreasonably risky”.

ADA coin's price history

Cardano is a proof-of-stake blockchain platform that was founded in 2015 and launched in 2017. The platform is named after Gerolamo Cardano, a 16th-century Italian polymath, and its native token, ADA, is named after the 19th-century mathematician, Ada Lovelace.

The ADA token was first offered to the public in 2015 at a price of $0.0024 per token. Since then, the value of ADA has appreciated by over 2500%, making it one of the largest cryptocurrencies by market cap.

In August 2021, Charles Hoskinson, the founder of Cardano, announced the launch of the Alonzo hard fork, which caused the price of ADA to surge by 116% in the following month. On September 2, 2021, ADA hit an all-time high of $3.10. The successful launch of the Alonzo hard fork brought smart contract functionality to the blockchain, and over 100 smart contracts were deployed in the 24 hours after the launch.

In 2021, Cardano experienced explosive gains, with its price increasing by more than 55% in a single month. This surge in price was driven by the successful launch of the Alonzo hard fork, as well as the platform's unique advantages, such as its energy efficiency compared to Bitcoin.

Despite the strong performance in 2021, Cardano's price has retraced significantly since then. As of 2024, the price of ADA is hovering around $0.30, which is a far cry from its all-time highs. However, some analysts believe that Cardano could still be a good investment, citing its high utility, extensive adoption, and massive DeFi potential.

ADA coin's future outlook

ADA, the native cryptocurrency of the Cardano blockchain, has seen explosive gains and steady growth over the past few years, despite the current bear market. With its unique advantages, strong community, and high utility, ADA is well-positioned for future success.

One of ADA's key strengths is its energy efficiency compared to Bitcoin and other proof-of-work cryptocurrencies. ADA uses a proof-of-stake protocol, which not only reduces energy consumption but also results in faster transaction times. This makes ADA more scalable and environmentally friendly, positioning it as a potential alternative payment method to Bitcoin.

Additionally, ADA has a strong technical foundation, built on peer-reviewed academic research. This sets it apart from other cryptocurrencies and contributes to its high level of security. Cardano's layered architecture, consisting of a settlement layer and a computational layer, allows for smooth interoperability and communication between the layers.

Recent upgrades, such as the "Alonzo" hard fork, have also added smart contract compatibility to the Cardano network, further increasing its functionality and potential for decentralized applications.

While ADA faces competition from more established cryptocurrencies like Bitcoin and Ethereum, its unique features and strong performance have steadily gained traction among investors. ADA's price has seen a significant increase since its ICO in 2017, and analysts predict further growth in the coming years.

According to price predictions, ADA's value could reach highs of $1 by the end of 2024, and it may even surpass $10 by the end of 2030. These forecasts, along with its current bullish momentum, make ADA an attractive investment opportunity for those looking to buy and hold for the long term.

However, it is important to remember that cryptocurrency is a highly volatile and speculative asset class, and there are no guarantees when it comes to price predictions. As with any investment, it is crucial to do your own research and carefully consider your risk tolerance before deciding to invest in ADA or any other cryptocurrency.

Frequently asked questions