Cardano for beginners: Step by step guide

In the relatively young world of cryptocurrency as an investment vehicle, Cardano is often considered to be the first of the next generation of cryptocurrency. While most cryptocurrencies have experienced the volatility, bad press and scandals that are, unfortunately, almost synonymous with cryptocurrency investing, Cardano aims to “provide a more balanced and sustainable ecosystem” for cryptocurrencies.

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Cardano for beginners- Step by step guide

What is Cardano (Ada)?

Cardano was founded by Charles Hoskinson, a mathematician who was also the co-founder of Ethereum (link). According to the Cardano website, their vision is to develop “a blockchain platform for changemakers, innovators, and visionaries, with the tools and technologies required to create possibility for the many, as well as the few, and bring about positive global change.”

The Cardano blockchain platform is the first of its kind to be founded on peer-reviewed scientific research. The entire project is guided by academic research and all platform integrations and implementations are first researched, mathematically modeled, tested and challenged before they enter development.

Ada is the cryptocurrency token associated with Cardano. This is unlike the more familiar relationship that Bitcoin and Ethereum have where the organisation and token have the same name and both are used interchangeably. The relationship between cardano and ADA is similar to the relationship between Ripple the organisation and XRP. Ada is named after the 19-th century mathematician and the world’s first computer programmer Ada Lovelace.

If you see me trying to boost the price of Ada, then I’ve been compromised and sell all your Ada. Cardano will be valuable based upon hard work, real world use and the utility of the platform. I’m not here to make day traders rich. I’m here to change the world

— Charles Hoskinson (@IOHK_Charles) February 1, 2018

How does Cardano work?

The Cardano blockchain is often referred to as the next-generation cryptocurrency. Developed using the programming language, Haskell, Cardano prides itself as “technology realised through evidence-based science.”

The blockchain platform is built on a consensus protocol called Ouroboros. According to Cardano, this allows the blockchain to tackle one of the fundamental challenges of earlier generation blockchain networks – high transaction fees as a result of increased transaction volumes. In addition to faster processing speeds, Cardano is also looking to save on energy costs by streamlining the way they process transactions.

According to Cardano, their blockchain offers opportunity beyond the world of finance that cryptocurrencies tend to be associated with. They see opportunities for the blockchain to be used in education, retail, agriculture, government and health care.

What can I do with Cardano (Ada)?

Cardano believes that the Cardano blockchain and the Ada cryptocurrency token ha use cases in the fields of:

Education:

Currently academic certifications are centralised and controlled entirely by the academic institution that issues them. Cardano offers students the opportunity to decentralise control of these certifications giving them, the true owners, control and ownership. Cardano believes that a blockchain solution would secure these certifications and allow students to share these certifications with whomever they liked quickly and conveniently.

- Retail
  
  Cardano sees itself as an important tool in combating the production and sale of counterfeit retail goods. Given the sophisticated nature of goods production and online sale, Cardano believes their blockchain would be a powerful solution to ensure the labelling of original goods being produced. The Cardano blockchain would add a tamper-proof solution that establishes the authenticity of retail goods being produced anywhere in the world.

- Finance
  
  Anyone who’s tried to open a bank account in a traditional bank knows that it is a painful process that could take days, if not weeks. Cardano believes that by allowing users to securely store credentials and identifying documents on their blockchain, you could reduce the friction and the amount of time that it takes to carry out simple processes like opening a new bank account.

- Investment
  
  But what if you’re not someone who works in these fields or is looking to setup suck processes, could you still be involved with Cardano and Ada. The answer is: Definitely. For the rest of us not involved in financial regulation and product counterfeiting prevention, Ada works as a store of value. Similar to Bitcoin and all the other cryptocurrency tokens, you could invest in Cardano by purchasing Ada and potentially reap the benefits were it to grow in value.

How do I buy Cardano in Australia?

There are two ways to buy Cardano in Australia today::

Buy Cardano (Ada) from a cryptocurrency exchange in Australian dollars

Cryptocurrency exchanges provide you with the service to exchange your dollars for cryptocurrency tokens for a price. So, in this case, if you’re looking to buy Cardano in Australia, you would need to follow these steps:

Find the cryptocurrency exchange that’s right for you. There are dozens of cryptocurrency exchanges that operate in Australia and globally that you choose from. Each has their own merits and demerits.
Register for an account with an official ID
Navigate to the page or the part of the site that lets you trade Ada and select the amount.
Select the payment method – Most cryptocurrency exchanges offer the ability to buy using debit card and credit cards, while some allow you to use Australian payment services like BPay.
Review the order details and click ‘Buy’.

Buy Cardano as a cryptocurrency portfolio investment

When you buy Cardano from an exchange, you would need to decide the amount of the currency to buy and the price that you want to buy it at. Cryptocurrency pricing is usually quite volatile so it is usually quite challenging to find “the right price.”

Once you’ve decided on these numbers, you would then need to consider how many other coins to buy and what ratio your Cardano should be at compared to the rest of the portfolio. Then you’d need to repeat this process over and over every time you make a new investment in Cardano.

Instead, you can create a portfolio of 10 cryptocurrencies using Chillur and invest in these currencies on an ongoing basis. This way, Cardano would be part of your portfolio and you would regularly invest small amounts of money into Cardano (Ada) without worrying about timing, price and amount – Chillur would do all that for you – using the spare change from your bank account or recurring investments in the amount of your choice.

How do I invest in Cardano Ada?

There are two ways to invest in Cardano Ada – directly, as we described in the previous section or by investing in Cardano Ada as part of an index portfolio.

Index portfolio with Cardano

The more hassle-free option is to invest in Cardano is to buy Ada as part of an index portfolio. An index portfolio spreads out your investment across several cryptocurrencies ensuring that you are not risking everything by investing in just one – remember that thing about eggs and the same basket? At the time of writing this, there are well over 2,000 different cryptocurrencies, of which Ada by Cardano is just one. An index portfolio with Cardano allows you to invest in Ada alongside nine of the other selected top 10 cryptocurrencies.

Chillur offers an index portfolio of selected top 10 cryptocurrencies by market capitalisation. This means that every $1 that you invest through Chillur is spread across the 10 cryptocurrencies (which includes Ada, the cryptocurrency associated with Cardano) based on their value in the market at the time. What Chillur also does is invest small amounts more regularly instead of a one-time amount in one shot. This way, you ensure that you are always investing in cryptocurrency regularly.

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Where do I store my Cardano?

All cryptocurrencies are stored in cryptocurrency wallets. Cryptocurrency wallets are physical devices as well as mobile phone apps that are either specially designed to hold just one kind of cryptocurrency or you can store multiple cryptocurrencies in the same wallet. In addition, Cardano also offers its own wallet called Daedalus. So if you were looking to store your Cardano Ada individually from the other cryptocurrencies that you own, you would need to store them in the Daedalus wallet. The third way to store Cardano Ada is to leave it in the wallet on the cryptocurrency exchange that you purchased it from.

What next for Cardano?

Cardano has outlined a five stage development roadmap for their future, named Byron, Shelley, Goguen, Basho and Voltaire.

The first stage, Byron, is completed and allowed users to buy Ada when it first launched and store them on their own Daedalus wallet. This phase was their initial growth phase that took Ada international and made them the one of the top most popular cryptocurrencies world wide.

Cardano is now working on the Shelley and Goguen phases of the roadmap in parallel. The shelley stage introduced new features such as a reward system to grow community adoption and encourage more people to participate in the network. The work on this era will ensure the decentralisation of the blockchain but will ensure that it remains, by their own claim, upto 100 times more decentralised than any other network.

The Goguen phase, which is currently also in production, introduces smart contracts onto the Cardano blockchain. This will see the introduction of a brand new smart contract development language and execution platform. Cardano also has plans to allow the creation of new cryptocurrencies on its network and has the ultimate vision of bringing all kinds of people onto its platform to make use of its apps.

The final stage of the Cardano roadmap, known as Voltaire, will see the network become completely self-sustaining and independent. It’s safe to say that this phase of Cardano’s roadmap is going to take a good few years before it even begins. Which is a more round-about way of saying that the only way to know how successful and mainstream cardano will be is to join them on their journey. And that’s precisely what countless Ada investors are doing.