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Invest in Cardano in 2022

Last updated 18th Jun 2022
Disclosure

Cardano was developed with the goal of enabling owners who have the native cryptocurrency token, known as the ADA token, to operate the network. They do so by voting on specific changes to the rule of the software.

Developers have since used the Cardano blockchain to run custom programming logic in the form of smart contracts, where they build programs known as decentralized applications (dApps).

The ADA token can also be used for voting on any future software policies. In turn, it gives the holders of the token an incentive to hold on to it for a prolonged period of time and ensure the future of the blockchain and the ADA token.

This guide will give you an in-depth look at how exactly you can invest in the ADA token and what it is all about.

Best Way to Invest in Cardano in 2022

There are many ways in which you can start investing in Cardano (ADA) today. To make things a bit easier for you and to help you determine which option is suitable for you, we have created a list of the best options we have found thus far, so you can get up and invest in ADA today.

1
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What Is Cardano

Cardano was founded by Charles Hoskinson, who was the co-founder of the Ethereum Network. He is also the CEO of IOHK. IOHK is the company that built the Cardano Blockchain.

Cardano is now maintained by three organizations. First, there is the Cardano Foundation, a non-profit that is responsible for supervising and overseeing the development of the Cardano platform in its entirety. Then there’s IOHK, the company that built the Cardano Blockchain and designed Ouroboros, which is the Proof-of-Stake (PoS) consensus algorithm that the Cardano blockchain utilizes for proper network operation. Last but not least, there is Emurgo, which is the company that helps encourage enterprises and other organizations to adapt to Cardano.

That said, Cardano is one of the biggest blockchains to ever successfully implement the Proof-of-Stake (PoS) consensus algorithm. As such, it is a project that ensures each new project or technology which is developed goes through a process of peer-reviewed research. This means that each idea can be challenged before it ends up getting validated and pushed forward.

Additionally, this has the added benefit of ensuring that the blockchain is durable as well as stable and increases the chance that potential pitfalls can be anticipated before they actually occur in practice. The primary use-cases of Cardano allow for transactions to occur in its native cryptocurrency token known as ADA, which enables developers to build secure and scalable applications.

At the time of writing, Cardano had a market cap of $71,523,397,471, with a circulating supply of 32.90 billion ADA tokens.

Pros

The Proof-of-Stake (PoS) consensus is environmentally friendly
Peer-reviewed technology
Fully Scalable
Great development team

Cons

Slow progress

How Does Cardano Work

Cardano’s blockchain works in two layers. First, there’s the Cardano Settlement Layer, also known as CSL, which is used to transfer ADA tokens between accounts and record the transactions. Then there’s the Cardano Computation Layer or CCL, which contains the smart contract logic developers use to move funds programmatically.

Additionally, the computers which run the Cardano software can join as one of three nodes. There are the mCore nodes, which can stake Ada tokens and participate in the governance of the blockchain. Then there are relay nodes that can send data between mCore nodes as well as the public internet. Last but not least, there are the Edge Nodes which essentially create the cryptocurrency transactions.

Then there’s the aforementioned Ouroboros, which is the Proof-of-Stake (PoS) consensus algorithm used by the computers that run the Cardano software to secure the network and validate the transactions. In return for doing so, they get rewarded newly minted ADA tokens.

Time here is divided into epochs and slots. The epochs are the overarching time frames, while the slots are the twenty-second increments within epochs.

Through this consensus algorithm, there are two types of blocks that can be added to the blockchain network. First, there is the Genesis block, which includes the list of all of the slot leaders associated with the epoch, and then there are the main blocks that have all of the transaction information and the proposals for software updates. They even include a list of the votes on these updates.

Ways to Buy Cardano

There are multiple ways through which you can buy Cardano (ADA) online. We have hand-picked some of the best ways through which you can do so, and you’ll be up and running with ADA tokens on your cryptocurrency wallet in no time.

You can use cryptocurrency exchanges, CFD brokers, P2P marketplaces, or in-person trading.

CFD Brokers:

  • This is a broker that is the intermediary between you and the cryptocurrency market, specifically the ADA tokens you want to purchase. It provides you with a trading platform where you get access to services, such as ones that conduct the trading process for you.

Cryptocurrency Exchanges:

  • Cryptocurrency exchanges are businesses that allow you to trade the Cardano (ADA) cryptocurrency token and give you access to charting tools and other features that you might need while purchasing the ADA token.

P2P Marketplaces:

  • P2P cryptocurrency marketplaces provide you with the opportunity to buy or sell directly with another user. This means that you can just post that you are selling ADA and connect with someone who wants to purchase ADA directly from you.

In-Person Trading:

  • This is a process where you meet the person you are selling the cryptocurrencies to directly and sell ADA to them in person.

Buying Cardano (ADA):

Step 1: Create and verify your account
Step 2: Fund your account
Step 3: Buy ADA

How to Invest in Cardano

There are multiple ways through which you can invest in the Cardano (ADA) token. You can either outright purchase the token and hold onto it for a prolonged period of time for a potential profit when you sell it long-term.

If you do not want to purchase the Cardano (ADA) tokens directly, there is another way through which you can get them. Through the process of ADA trading, you can essentially speculate if the price of the token will go up or down without actually owning it yourself.

It is important that you utilize short-term as well as long-term strategies efficiently and take advantage of margin and leverage trading as much as you can. Fully exploring what your options are before making a drastic decision is recommended.

That said, the method you end up picking for the process of trading Cardano (ADA) needs to provide you with entry orders, stop losses, profit-limit orders, and risk-management methods.

Below are the different options you can pick from:

Brokerages:

  • There are cryptocurrency brokerages that will fill the role as your bridge to the cryptocurrency market. Here, all you will be required to do is create an account, potentially complete KYC and AML documentation procedures, and find the ADA token in the search bar to purchase it.

Exchanges:

  • Cryptocurrency exchanges connect you to the market directly, which means that the market sets the price of the ADA token, and you can purchase it or trade it with ease. Note that you might be required to have your own cryptocurrency wallet on some exchanges.

ETFs:

  • You can invest in ADA through a TF fund, which gives you access to a diversified portfolio of cryptocurrency tokens.

Index Funds:

  • Through index funds, you can buy a share of the ADA cryptocurrency token instead of buying the token instantly.

Mutual Funds:

  • You can also invest in Cardano (ADA) through a mutual fund if you do not want to own the token directly, and it provides you with an additional way of interacting with the market.

Trusts:

  • There are even trusts out there that will hold ADA tokens for you and where you can trade your shares through a brokerage or a cryptocurrency exchange.

Debit Cards:

  • You can also use your Debit Card directly to purchase Cardano (ADA) tokens in some specific apps or locations that support it.

Apps:

  • Each exchange or brokerage will typically have its own app. However, there are apps specifically developed to help you easily get Cardano (ADA) tokens on your cryptocurrency wallet by purchasing them.

Is It Safe to Invest in Cardano Right Now?

Investing in Cardano (ADA) might not be as safe as you might think. This is due to the fact that, just as with any investment, it has the potential to either climb or fall in value.

Specifically, within the cryptocurrency industry, these cryptocurrency tokens such as ADA tend to have a high level of volatility. This means that the price can swing in any direction tremendously, day by day.

That said, make sure you purchase Cardano (ADA) from reputable exchanges and regulated brokerages. You will at least have a higher level of security in terms of where you are trading and how well your cryptocurrency wallet is stored.

Khashayar Abbasi

Khashayar Abbasi

Khashayar discovered Bitcoin back in 2014 and has since spent countless hours researching the different use cases of cryptocurrencies. He has a bachelor's degree in International Relations and has been a writer in the financial services industry for nearly half a decade. In his spare time, Khashayar enjoys photography, cycling, and ice skating.