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Cryptocurrency’s next big thing raises questions amid soaring price

*Cardano’s Crypto market value recently surged to $34 billion, as Founder Charles Hoskinson says his goal is to run countries on the blockchain, even as over 100 companies are looking to shift from Ethereum to Cardano

Alexander Davis | ConsumerConnect

The rapid rise of Cardano over the past three months is catching the attention of some of the savviest investors in cryptocurrencies across the world.

Billionaire Michael Novogratz via a blog post sought to crowd-source information on the digital token, also known as Ada, Tuesday, March 9.

The investor has asked for help to explain the more than six-fold surge of about $60,000 as of the weekend, since the middle of December 2020 that briefly made it the third-biggest cryptocurrency by market value after stalwarts Bitcoin and Ethereum, Bloomberg report said.

Novogratz tweeted (@novogratz): “Last question before I go shower, can anyone make a real bull case for $ADA? Does anyone build on it? Use it?

“Why is market cap so high? Should it be a funding asset? It’s one of the few cryptos I haven’t traded in my life.”

He is not the only one asking questions about what is going on with a network that still lacks much functionality available on its more established rivals in the digital market space, report stated.

However, that hasn’t stopped it from developing a loyal following on Reddit, similar to many of the so-called meme stocks that surged at the start of the year.

Unlike the likes of GameStop Corporation, Cardano has been able to maintain its upward momentum.

Cardano is the brainchild of Charles Hoskinson, a 33-year-old who looks like the PhD student that he was before crypto mania took over his life, according to report.

He’s now a bit of a crypto rock star, running a YouTube channel with 105,000 subscribers, gets fan mail and even gifts from admirers, such as a letter Albert Einstein wrote and a bronze eagle.

Hoskinson, in an interview from Longmont, Colorado, in the United States, said: “That’s the most surreal part of all of it. I get recognised at airports.”

It was learnt while his YouTube videos are being watched by tens of thousands of people, Cardano is still a work in progress.

Even after an upgrade that happened in early March, it can’t yet be used to run many of the hottest applications in crypto, such as decentralised-finance projects that let users lend, trade with and borrow money from each other. The so-called smart-contract functionality is expected to come this year.

Nic Carter, Co-Founder of researcher Coin Metrics, stated: “I am not aware of a single popular application deployed on Cardano, nor have I seen any enthusiasm for the platform among developers.

“I am truly mystified as to why it is enjoying resurgence in popularity.”

Cardano previously peaked in early 2018 during the crypto boom and bust, before crashing badly.

This year, Cardano went to a market value of about $34 billion from about $5.6 billion, according to data tracker CoinMarketCap.com.

Perhaps investors are buying Cardano’s promise or just fear missing out on the gains. It’s billed as a better Ethereum, which has emerged as the innovation hub for projects ranging from DeFi to NFTs, efforts to issue digital art on blockchain.

With transaction fees on Ethereum high, developers have been looking at alternative networks such as Cardano and rivals Tron and Polkadot.

Hoskinson said: “We did it right, but it meant we were one of the last ones to get to market.”

But he noted that he does not know why Cardano’s value suddenly shot up.

“It’s been a wild ride, broke to a billionaire in eight years is pretty crazy,” Hoskinson said.

He stressed that Cardano’s blockchain security and governance are superior to Ethereum, and should allow for applications such as voting and supply-chain tracking. He is less interested in decentralised exchanges, such as Uniswap and collectible art like digital cats.

Hoskinson added a clincher: “My goal is to run countries on this blockchain. I don’t care about Uniswap and CryptoKitties and other things. It’s a bubble, and it comes and it goes, like Pet Rocks and Beanie Babies.”

More than 100 companies are “in the pipeline,” looking to shift from Ethereum to Cardano when its functionality matures, he said.

“You can take your DeFi and you can run it on my system for 1/100 to 1/1000 of the cost,” he said.

Cardano’s Chief dove into crypto as a disenfranchised 20-something, who wanted to see heads roll on Wall Street after the financial crisis, and they didn’t.

After Hoskinson stumbled onto the Bitcoin white paper in 2010, he looked at all the references it cited, and concluded that Bitcoin will fail, report noted.

Still, Cardano’s Founder started mining the cryptocurrency, most of which he said he gave away or spent.

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