Cardano (ADA)

Author: Kaloyan Roussev
Date: 12 January 2018

Do not make investment decisions based on this article – read the disclaimer before you proceed and leave the website if you disagree with it.

It is 12 January. This review takes into consideration investing in ADA at its current price at $0.83

How do I rate an investment in this project at the current price? (TL:DR)

Long time since I last posted. I am sickened by the world of crypto trading. For the past months it is nothing short of hordes of sheep being swayed one way or the other by greed, stupidity, FOMO, old antivirus guy pump and dumps and gambling. All logic and fundamental analysis were thrown out the window. Coins with billions upon billions of worthless tokens trading for $1-5 – looking at you, XVG, XRP, IOTA (trillions of it). Nobody cares. Antivirus dumbass tweets and price shoots up. Ripple goes to $4 with thousands of percents of gain in one year. Let me ask the market this: has Ripple’s utility and value risen correspondingly along with the price, is ripple now thousands of times more useful? No, its still a centralized, 80% pre-owned digit in a ledger that does nothing. Bitcoin went straight up all of a sudden, around ridiculous forks, futures news, and the mass moron joining the market. Another problem is that clearly good projects get lost in the sea of people looking for this month’s big thing to speculate on. So if a good project doesn’t rise up to a very visible place in the market, and do so quickly, it will be forgotten because next month there will be something new that’s interesting that people will sell all to get into. After all a human’s cognitive attention can somewhat comprehend about 7 things at most. With 1000 altcoins, we feel like kids in a candy store, at Christmas.

So I gave up on trying to invest by any kind of fundamental/value analysis or logic. It is a pure gamble now, and I hate gambling and I can’t rely on gambling and sheeple to determine my outcomes. There is only one reliable way to kinda trade not purely by luck or accident – crowd (hype) analysis.

Since I am the administrator of a large FB group for cryptocurrencies and I approve all posts there, and I am also a member of more than 20 huge FB groups for cryptocurrencies, all I see when I scroll down my feed, is crypto-related posts. And I kept seeing Cardano show up. And then I saw UK investor Siam Kidd talk about it – and right then and there, I decided to invest in it – bought between $1.00 and $0.80, without doing any analysis other than look at the chart and notice a bullish trend. Screw fundamentals. Screw the fact that this is another coin emitted in the billions. The market doesn’t care, and the market will take us even further. I’m basically subscribing to the greater fool theory for the time being.

So now that I’ve bought, I am curious what the fuss is about, and in a “fire, then aim” kinda way, I am going to write a report on Cardano.

Edit: researching Cardano makes me feel good about my decision to buy it, and has convinced me to hold on to it for as long as I can.

Project/token summary

Cardano seems to be among the projects (along with Ethereum Classic) of this high-end company with a very expensive website and a very  large team of impressive white coats –https://iohk.io/ On Cardano’s website, it basically says that it is the best and the most advanced crypto with all the bells and whistles, however, I was lost in a sea of generic technical jargon and couldn’t figure out what exactly does it do. Their Proof-of-Stake-Mining (wtf) algorithm claims to be the top of the line, most secure algorithm. I’ve used their wallet, its a good wallet, too. Reading further, it seems that after all, Cardano is a high-quality general purpose smart-contract cryptocurrency that takes into consideration Bitcoin and Satoshi’s principles and improves over Ethereum. Very late into the game, as Bitcoin and Ethereum’s momentum is almost impossible to stop, but it seems that my decision to buy (I am backward rationalizing here) was a good one, as this is just the beginning of Cardano and who knows what the price will be by year-end, provided that the whole crypto market doesn’t come crashing down, which in my pessimistic view, is more likely than not. I am even surprised how it hasn’t happened yet.

The roadmap is huge and filled with all kinds of events and updates, ranging from the implementation of very generic cryptocurrency features to large-scale ambitions like debit cards, and partnerships with big companies. Will give the upcoming year and the market many excuses for price surges.

The most important and impressive thing about it is the large raving optimistic community around it. Just look at the youtube videos about it (and their titles)

Branding/Positioning

They need a motto, an elevator pitch, something to tell us what Cardano stands for, what does it do, and how is it positioned in the crypto sphere. Currently it doesn’t become abundantly clear, even after a more thorough research. As a general purpose crypto, even with a supposedly better product (this hardly ever works in a mature market with clear leaders), they will have a hard time to become a significant player in the market, however, the price or the mass investor shouldn’t care about that, because there is speculative money to be made. The name is very open and sounds good.

Token utility

This is not a token, it is a classic cryptocurrency (with smart contracts)

Upcoming bullish events

According to roadmap, next big update is in 23 days.

Red flags

There are too many cardanos on the market – 2o-30 billion or something. I used to say that anything that is emitted in such large numbers will be lucky to stay above 100 satoshi. However, the market has proved me wrong especially in the past few months (the mass Verge or Ripple buyer, following McAffee tweets and FOMO, doesn’t even know how to open coinmarketcap and what these numbers represent). After all the intrinsic value (this elusive concept) doesn’t mean anything other than what the market’s perception for it, is. There were rumors about it being vaporware, but they are completely wrong. In fact, its the largest, most involved team with the biggest most dynamic github project I’ve come across so far.

Website: https://www.cardanohub.org/en/home/
Coinmarketcap: https://coinmarketcap.com/currencies/cardano/
Exchange: https://www.binance.com/trade.html?symbol=ADA_BTC

General

  • Website: does it look good/presentable – Cardano’s own website looks simple and generic, but all the effort went into its developing company’s website which is marvelous.
  • Roadmap – roadmap is huge and very elaborate, there’s a lot of stuff going on, with many people simultaneously working on many things, with progress tracked, teammembers and github links attached to every milestone https://cardanoroadmap.com/
  • Whitepaper – initially there was no white paper per se, as they admit here https://www.cardanohub.org/en/philosophy/ but you can see a nice list of principles that they set out to adhere to. However, I was irritated to find out that they have written a bunch of very large whitepapers on the technologies behind Cardano, and I will be damned if I read all those (first one is 54 pages long) – https://www.cardanohub.org/en/academic-papers/
  • What is their progress according to the roadmap –on schedule, moving fast in several directions, 23 days until next big milestone
  • Website: Is it a quick wordpress template, a 2-hour html job or a custom design with lots of work, money and thought thrown at it – like I said, the website of the company behind Cardano is extremely nicely done and very expensive.
  • What new does this cryptocurrency bring to the world, what problem does it solve, what does it stand for– high-quality high-end cryptocurrency. So many monkeys on that branch.
  • How does the cryptocurrency name sound (does it sound legit and like a good brand name) – the word “cardan” stands for “drive shaft” in my native language. Dunno where Cardano’s name comes from, but it has nicely distributed vowels along it and it is easy to pronounce in most languages, it is open and sounds good. People underestimate how important a good name is. Also, reminds many of us to Grant Cardone, the prominent real estate tycoon and internet marketer, which is also a positive association.
  • How does the logo look – generic as fuck.
  • Is it a PoW, PoS or PoW/PoS coin, what is the mining difficulty or APR, does it suffer from inflation – something called proof of stake mining. Don’t know about the difficulty. The circulating supply is about 60% from the max supply, so there’s potentially 40% more coins to flood the market at some point.
  • Who is behind the cryptocurrency – are they shady figures, or have they placed their names and pictures on the website; what is their track record and reputation; do a quick google/github research on them – both founders have been part of Ethereum. Joining them is this massive horde of professionals – https://iohk.io/team/ – everyone’s faces, names, linkedin and twitter profiles, and mid-sized bios are there. Looking trustworthy and inspiring.
  • What is the limit on supply of coins in circulation – circulating 25 billion, total – 32 billion, max – 45 billion. Does someone know what the difference is between total and max supply?
  • Is there a link to the source code – https://github.com/input-output-hk/cardano-sl
  • When was the last commit made, and how frequent are commits – 3 hours ago, constant commits, 13 thousand commits – what a huge, fast developing project. I’m impressed.
  • How many developers participate in the coding – 51 contributors
  • What the project survival relies on – this project is big enough with large enough team that the company/team risk is distributed among many people, looks agile enough to withstand many adversities.
  • Will this project survive a cryptocurrency bubble burst and does/will it have enough of a following that needs it every day – don’t know – it is in the toughest of all niches – general purpose crypto – goes head on with Bitcoin and Ethereum
  • Competition –  almost everyone

Exchanges and trading

  • Which exchanges (and how reputable they are) is the coin traded on – basically binance and bittrex, the rest are some stupid and unpopular exchanges, I wouldn’t dare put my money in. By the way, Binance wallet has been in maintenance for a week (or more) now. People can’t withdraw. People might be scared, which may have caused the dip we are in right now. However, a video came out from one of the founders, that explains that there’s nothing to worry about and the problems are being worked on.

  • Daily trading volume – $243 million
  • Market cap$21 billion – NUMBER 5 IN TOTAL MARKET CAPITALIZATION.
  • Are there buy (support) or sell (resistance) walls – a couple of sell walls and no solid support
  • How does the price chart look – looks like a long-term bullish trend with several peaks and dips. Short term might go down some more.

Social

  • Is there a Bitcointalk forum Announcement thread – no but there is a reddit https://www.reddit.com/r/cardano/ and their own forum linked to on their website
  • History of the coin according to the forum and general public impression of the coin throughout –almost all posts on reddit and their forum are positive and optimistic.
  • Do they have a blog, anything interesting on it? – this is the company’s blog https://iohk.io/blog/ – I see a very technical video/article on their PoS algorithm, some news on one of the most famous Spanish hotels accepting ADA as payment (very good), some reflections on 2017 and hopeful and enthusiastic expectations for 2018, a link to a series of whiteboard videos under the cardano name (https://www.youtube.com/playlist?list=PLnPTB0CuBOBxDBrD4-ZflYF6y3L3jMUOs) (btw many comments below the blog articles, and also there were so many comments in the forum posts, too – looks like a very large and active community), a very thorough explanation of their software development process (this is a very real project, despite the ridiculous rumors about it being vaporware) and a lot of other good stuff for the hardcore fans to delve into.
  • Is there a chat channel –rocket chat https://chat.cardanohub.org/
  • How many members on slack– 4k  in the general chat
  • Impressions from the conversations on slack– conversations mostly dominated by people asking questions about wallet problems.
  • Is there a Twitter profile for the project and does it post regular updates, how many followers  https://twitter.com/cardanocom  68k likes, among the most likes I’ve seen for a crypto Twitter account (but lets not forget I’ve reviewed a total of 2 projects for the last 3 months, things have changed) – posts several times per day. I learned from their Twitter feed that there is an upcoming fix for the Binance wallet, so yay. Development updates from Charles. Communication seems to be very proactive on their side.
  • Is there a Facebook page for the project and does it post regular updates, how many likes – a huge community of 17k members – https://www.facebook.com/groups/CardanoCommunity/about/

Popularity and perception

  • What does a quick google search tell us about the project – there is even a section with “Top News” about it, which only appears for highly discussed topics. I found this website, it might be related to them, it has tons of info on the project – https://whycardano.com/ – There is also this website https://cardanofoundation.org/ – (by the way, noticed on their tweeter, a tweet about a fake tweeter account and a fake website being reported to them, so beware, one of these might be fake/malicious). The most interesting thing is that there are two pages of results solely comprised of articles from different websites about “how to buy cardano”! Here is a Google Trends on it:

    Some guy in my FB group on Crypto had noticed that the price closely follows google trends with some delay, so when google trends show a spike in the searches for a particular crypto, one can be most certain that the price will go up soon enough.
  • Are there youtube videos about the coin – there are many videos on youtube about cardano, and look at their names “why I bought 30k cardano, best coin explained”, “bull run cardano”, “cardano best altcoin”, “best altcoin” (again), “ethereum killer”, “will cardano hit $10” etc. We don’t even need to watch these, it was enough looking at so many bullish videos to feel the market’s pulse. I think currently crowd/hype analysis and trend following is the game in town for crypto.
  • Is the coin associated with illegal/criminal activity or the dark web – no

I am sure I might’ve made some mistakes in this post or in my research. Please, forgive me, if I have, and contact me to tell me where I went wrong. It takes about 4-5 hours of my time to do a full research on a cryptocurrency, and I try to do at least 4 per week.

 


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