Cardano’s cryptocurrency ADA climbs 25% to find itself as the third-largest cryptocurrency in the world. Eclipsed only by Ether and Bitcoin, the token surpassed the Binance Coin and Tether in 4th and 5th place, respectively.
ADA leapt as high as $2.58 on Friday last week, cementing its all-time high. The rally was fueled by an upcoming upgrade that will be able to process smart contracts on the blockchain. This upgrade would also put the cryptocurrency in direct competition with Ethereum.
Cardano aims to solve real-world problems by utilizing blockchain technology. Its most recent partnership with the Ethiopian government goes to show that. Cardano will track the educational progress of 5 million students on its network and award each student with a tamper-proof academic record upon conclusion.
The Alonzo upgrade will introduce smart contract functionality to the network, expanding and offering more solutions to real-world problems. Some of the most common uses for smart contracts are decentralized finance (DeFi) applications, Non-fungible tokens (NFTs), and gaming applications.
Unlike many other cryptocurrencies that release a product and then work on improving it, Cardano opts to test before implementation. Naturally, this means that Cardano’s product will be more stable and robust in the long run. However, in the short run, this means that many other cryptos that have launched quickly already captured a significant portion of the market share.
As things stand now, Ethereum dominates the dApps development. Reportedly, the interface allows for easy and quick launches and has a sizeable community of developers. However, it also comes with the downside of being slow. Ethereum’s platform is struggling with speed because it cannot meet the high demand. For now, users accept the high fees and network congestion, but it’s likely that many will move to a more efficient Cardano network once it launches.
Investors “were hyped on the optimism that a supposedly superior blockchain infrastructure with the possibility to support the next generation of smart contracts is on the horizon,” commented Konstantin Anissimov, executive director of CEX.IO.
The crypto market crashed earlier this year when Elon Musk highlighted Bitcoin’s heavy environmental downside.
However, this was positive for ADA, which surged to new highs as investors flocked to the more environmentally sustainable token. Reportedly, the founder of the token, Charles Hoskinson, has claimed Cardano uses just 6-gigawatt hours of energy annually—not even 0.01% of the 115.85 terawatt-hours Bitcoin is estimated to use.
ADA has climbed 1,300% since the beginning of the year, making it one of the best-performing cryptocurrencies.
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