Cardano joins crypto’s creative destruction cycle

New York, September 3 (Reuters Breakingviews)-Watch out for Bitcoin and Ethereum. The cryptocurrency platform Cardano’s ADA token broke the $3 mark for the first time on September 1, just a few weeks after becoming the world’s third largest virtual bidder. According to Coinbase data, although at a price of 96 billion U.S. dollars, its total value is about one-fifth of Ethereum currency and one-tenth of Bitcoin, but the third-ranked Bitcoin has doubled in a month. Fan. Cardano is different from its larger cousin because transactions are verified using “proof of equity”, which rewards ownership, rather than “proof of work,” which rewards effort. The former uses less energy. Ethereum is turning to Proof of Stake, but it may not last for a year or two. On the other hand, Cardano is not very suitable for so-called smart contracts, it will automatically perform certain agreed operations, until later in September for the transformation. Another difference is that the supply of Cardano’s ADA is limited, just like Bitcoin, but different from Ethereum.

Cryptocurrency believers may just hedge their bets by investing in all of these. But the rise of Cardano shows how the field has evolved as a whole. The new entrants from Polkadot to Iota each bring some privileges that others don’t. Thousands of changes. Cardano’s success may be fleeting, because imitators use its charm and create more attractive alternatives on this basis. People with strong memory may still remember Altavista, the first search engine that launched web page translation in the 1990s. It went all the way until Google erased it from the map, partly because it was piggybacking on the progress of its predecessors. A dollar invested in Google’s predecessors may be wasted, but without it, search would not be what it is today. This is also the paradox of cryptocurrency: only through the loss of wealth by today’s investors, the industry can bring sustainable wealth.