Cardano has now outranked Litecoin (LTC) to become the fifth biggest digital currency in the market in terms of market capitalization.
The Proof-of-Stake (POS) consensus and the protocol-based digital currency has surpassed the $20 Bln mark that recorded a 12% increase in value.
Cardano is developed by IOHK – a blockchain technology company, which is also a proactive contributor to the codebase of RSI Coin, ScoreX, and Ethereum Classic. A team of developer spearheaded by Charles Hoskinson developed the blockchain network for Cardano.
This emerging blockchain network operates on top of a POS algorithm that is known as Ouroboros as well as technologies built from scratch via a peer-reviewed academic research. This has been in existence since 23015 and has evolved into an advanced and innovative smart contract network.
Aside from providing a smart contract ecosystem that is comparable to Ethereum, Cardano also operates as a payment settlement network for processing fast and affordable payments similar to Litecoin network.
Cardano’s exchange market is still lower compared to the leading digital currencies today with an average trading volume of about $213 million a day. This trading volume is mainly focused on two digital currencies exchange – Binance and Bittrex, which process at least 90% of Cardano deals around the world.
When it comes to market structure, Cardano is also lagging behind compared to other leading digital currencies in the market, which have lower market valuations such as Stellar and Litecoin.
But regardless of a weak market, cryptocurrency analysts believe that the technological platform of cardano is more advanced compared to leading digital currencies, thanks to its multi-layer platform. The first layer serves as a payment platform, while the second layer operates as a smart contracts that can also recognize identity.
Criticism on Cardano’s ‘sudden rise’
This December, the creator of Litecoin and a former executive of Coinbase, Charlie Lee, criticized Cardano as well as the digital currency market because of the ‘sudden rise’ in its valuation. Lee was wondering how did Cardano become a $10 billion currency when it is only three months old. He also pointed out that Cardano is only trading at Binance and Bittrex and the absence of fiat trading pairs.
“To be clear, I have nothing against Cardano or its tech. And I have a ton of respect for Charles Hoskinson and I’m sure the project has a ton of potential. But at $10 billion valuation right now, how can that possibly be a good value,” Lee added.
Lee also drew flak from the Cardano advocates. It is also interesting to note that the market as well as the cryptocurrency investors are the ones deciding the valuation of a digital currency. When the market thinks that the market valuation of Cardano is $20 billion, then its worth is $20 billion in the market.
In addition, Cardano is not three months old as Lee claims. This digital currency has been around as early as 2015, even though it was initially introduced in the market last year. Nevertheless, a fair criticism of Cardano could be the lack of decentralized applications as well as the active smart contracts. In the Ethereum platform, applications such as EtherDelta and CryptoKitties are also processing a high volume of transactions every day.
The emergence of Cardano, as well as other altcoins such as Ethereum and Ripple, is really posing trend for the Bitcoin market, as its dominance is now at an all-time low at 36%.