Can Cardano’s [ADA] new proof of stake protocol reverse downtrend? 18253
Jessica Kuruthukulangara
Jul 12, 2018 at 5:51 PM

Charles Hoskinson, CEO of blockchain firm IOHK behind Cardano [ADA], seems to believe that his company’s new algorithm to verify transactions is secure enough to safeguard investments.

Ouroboros Genesis is a new proof of stake algorithm to secure transactions on its blockchain, but it addresses previous concerns of security. According to a research conducted by IOHK, the security shown by Ouroboros Genesis is comparable to that of Bitcoin’s blockchain, which has not been compromised to date.

“Proof of stake is solved,” Hoskinson posted on social media platform Reddit in April.

Ouroboros Genesis could soon back ADA, which currently has a total value of about $3.3 billion.

Cardano [ADA] price performance so far

However, these developments haven’t really lifted investors' sentiment. The crypto has faced a bearish market, losing over 40 percent of its value in the last three months. As of 1130 GMT, the coin was trading 4.5 percent lower against the U.S. dollar at about $0.13.

ADA can be a bad, high-risk one year investment option and could possibly crash, according to WalletInvestor.

See also: Buying Cardano [ADA]? Read this first

Smartereum has forecast that ADA’s price could reach $2.5 in one year, while the five-year prediction is at $10.

Why is proof of stake better?

Within the proof of stake concept, a user can either mine or validate transactions in the blockchain depending on how many coins the person holds. In this case, the user would be randomly selected to form the next block based on the number of altcoins he/she owns.

On the other hand, the proof of work concept requires miners to solve a mathematical puzzle in order to verify transactions after which they would get a reward in return.

Proof of stake has been touted as a better way to validate transactions since proof of work requires a lot more electricity. According to VICE Motherboard, the electricity used for one Bitcoin transaction could power 1.5 American homes for a day.

Proof of stake is increasingly becoming popular in the cryptoverse. The developers behind Ethereum, the second most valuable virtual currency, said in April that the network would soon migrate to the proof of stake algorithm.

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