Cardano overtakes Binance Coin to become the third largest cryptocurrency — here’s what’s driving the rally
- Cardano's ADA jumped more than 20% in 24 hours, its highest point since a record of $2.47 on May 16. It is now the third most valuable
- The rally in the crypto asset's value is being attributed to an update that will extend the smart contracting mechanism to the blockchain.
- It’s often called “ethereum killer” because of its potential of taking on the mightier crypto with an improved smart contracting system.
- The new update will open
Cardanoto the world of DeFi, NFT, and other automated transaction systems.
AdvertisementCardano has hit a new all-time high, rising over 20% in the last 24 hours, with its price peaking at $2.55. The cryptocurrency that is powering Charles Hoskinson’s public blockchain has regained the spot of being the third-largest crypto with a whopping $80 billion market cap.
The Cardano blockchain's cryptocurrency is called ADA, and the system is often touted to be a direct Ethereum and Solana competitor. It has surpassed
The rally in the crypto asset's value is attributed to the Alonzo Purple public test net launch. It's the final test phase of the project, which will end in the network finally getting smart contracts capability.
The entire crypto market has witnessed a bullish rally in the previous week, pushing its market cap to more than $2 trillion. While Bitcoin and Ethereum continue to lead the race, new altcoins are constantly challenging the norm. The price dips from the last two months have not seemed to affect the digital asset's price too much, as it's now back well over $2. It reached an all-time high previously in May, remaining just a little shy of $2.5.
What’s driving the Cardano rally?
The upcoming ‘Alonzo’ upgrade is driving the bullish sentiment. The development team announced the launch of the public test net on Twitter. Incorporating smart contracts is critical for the blockchain as it introduces a range of new capabilities such as DeFi (decentralised finance), NFT (non-fungible token), automated lending, and more.
ALONZO UPDATE: We’re delighted to announce that we have now successfully spun up #AlonzoPurple and have today begun… https://t.co/q19wX8P0DL— Input Output (@InputOutputHK) 1628272647000
The new update is likely to land on September 12, and investors are confident that it'll be a game-changer. Often called the "ethereum killer," it's four times the size of Solana in terms of market cap but has little practical use-case right now.
On the flip side, Japanese authorities have permitted it to float on exchanges in the country. While crypto regulations worldwide are at a nascent stage, Japan's decision is also cited as an indirect mark of due diligence and compliance.
But, what are smart contracts?
Smart or blockchain contracts are unique in the way that they ensure compliance between the two parties. Immutability is one of the most remarkable features of a self-executing contract. It means it is impossible to reverse, alter, or tamper the codes, rules, and even the transactions once programmed on the blockchain.
AdvertisementLike traditional contracts, smart contracts are agreements between two or more parties, avoiding the need for vigilance or enforcement from third parties.
It's self-executing and impossible to reverse, alter, or tamper with the code, internal regulations, and transactions. The blockchain network maintains a transparent, secure, and immutable transaction ledger that ensures proof of ownership is also established and transferable. Contract negotiation and application become far more accessible, and all the edit history of the transaction is also transparently available.
Furthermore, it can also be deployed for DAOs (decentralised autonomous organisations), which require communities to be bound to specific rules coded into blockchain contracts combined with governance mechanisms.
Ethereum is infamous for its smart contracting ability and was created by Vitalik Buterin and four other co-founders in 2013. Polkadot, EOS, Binance Smart Chain, Solana, and many others still compete for the throne, but none of them can defeat the industry's first mover.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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