How To Buy Cardano (ADA) in Canada: Everything You Need to Know
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With 7 new coins added to Bitbuy’s platform last month, it is the perfect time for investors to learn more before getting in on the action. One of the most talked about coin among the top cryptocurrencies in 2021 is Cardano, whose native token (ADA) will be available to all Bitbuy users in the coming weeks. In this article, we will talk about how Cardano’s Proof-of-Stake blockchain advanced and changed the crypto industry forever, go over everything you need to know about the project and the coin, as well as how you can buy ADA in Canada.
Proof-of-Stake: The new and improved method of verifying transactions
Before cryptocurrencies like ADA were born, all crypto blockchains used the Proof-of-Work method to verify transactions. When the idea of decentralized digital currency was proposed to the world with Bitcoin, the founder and creator Satoshi Nakamoto, had to find a way for transactions to get verified without the use of an intermediary party like banks or FinTech’s (Ex. PayPal). This problem brought us something called a “consensus mechanism,” which is a system that connects all computers (nodes) in a crypto network to agree on which transactions are legitimate. For a decentralized currency to work, Nakamoto had to make sure that the possibility of fraud and spending the same money twice was out of the picture. The first consensus mechanism, Proof-of-Work, was created and adopted by Bitcoin at the dawn of cryptocurrency and was used by many others in years to follow.
Put in simple form, The Proof-of-Work method is a competitive race by miners who own nodes (powerful computers that run on the specific blockchain) to verify and add new blocks by solving complex mathematical problems the fastest. The miner whose node answers a mathematics puzzle the fastest will create a cryptographic link between the current block (most recent transactions) and previous blocks to earn some of the network's native currency. In Bitcoins case, successful miners will earn BTC. To avoid tampering, the ledger is constantly distributed, allowing all nodes on the network to reject any altered versions instantly by making sure that there are no identical mathematical solutions.
The Proof-of-Work method had some very powerful advantages for the very first cryptocurrencies but as the industry continues to grow in popularity and usage, certain limitations have started to come to our attention. The first limitation is the number of transactions a PoW blockchain can process at a time. For example, the Bitcoin blockchain can process 7 transactions per second while VISA can process almost 2000 per second. Another disadvantage is the energy-intensive process it takes to mine which is not only very bad for the environment but also costs thousands of dollars a day to run. The most notable problem with PoW is that is provides an unfair advantage to individuals or corporations with the largest amount of running nodes. As a result, the Proof-of-Stake method was created to provide a fairer mining system as well as a lesser energy-intensive process.
Instead of having a competitive race to try and mine every single new block, the Proof-of-Stake method introduced a system where miners nodes are elected by an algorithm instead. Therefore, nodes only need to use power when a block is assigned to it instead of running all day trying to be first. Proof-of-Stake blockchains employ a group of ‘validators’ who are individuals and corporations that stake their own crypto in exchange for a chance of using their nodes to validate new transactions, update the blockchain, and earn rewards. The network’s algorithm chooses validator's nodes based on the amount of crypto they have added to the pool and the length of time they’ve had it in there. Instead of being rewarded in freshly minted crypto like seen with PoW, validators on a PoS network are rewarded in transaction fees that users pay on every transaction. Similar to PoW, the block is then distributed, allowing all other nodes to instantly reject any altered versions by making sure that there are no existing identical cryptographic solutions.
What is Cardano (ADA)?
In 2015, Ethereum’s co-founder, Charles Hoskinson, saw the limitations listed above take a toll on current PoW blockchains and began developing a scalable, interoperable, and sustainable PoS system called Cardano. Cardano was created as an alternate to Ethereum and aims to be a decentralized application (DApp) development platform with a multi-asset ledger and verifiable smart contracts. This means that on top of being a tradable digital currency (ADA), Cardano also has other utilities for their users like smart contracts.
The Cardano platform runs on their very own Ouroboros consensus mechanism which proved to be the first fully secure PoS system. This consensus mechanism allows users to stake ADA for the chance to mine new blocks. As explained in the section above, the more you have staked, the better chance your nodes have of being selected to mine. Miners on the Cardano blockchain are paid in transaction fees that transactors pay with each trade. Different from PoW systems, Ouroboros requires a small number of ADA holders to be online to maintain good network connectivity. On top of that, Ouroboros cuts down more on energy consumption by containing stake pools, which is a system where ADA holders organize themselves into a pool and elect a few to represent the group during protocol execution. This ensures block creation is always running even if some of them are offline.
Not only did Cardano create a cheaper, lesser energy-intensive process, and a fairer mining system, they also brought extra utility to their coin with smart contracts. A smart contract is an automated digital agreement, written in code, that tracks, verifies, and executes the binding transactions of a contract between various parties. The transactions of the contract are automatically executed by the smart contract code when predetermined conditions are met. For example, a contract can be programmed to release a payment once the buyer confirms the receipt of delivered goods. It could also be programmed to release funds for someone’s birthday each year. The possibilities of smart contracts are endless. Since PoW blockchains like Bitcoin have no utility other than being a tradable decentralized currency with value, smart contracts make Cardano a very prized and valued asset in the crypto industry.
How to Buy ADA in Canada?
Both complete beginners and experienced veterans can find trading options for themselves here:
- For beginner traders: Bitbuy Express Trade is an option allowing you to set up your trade quickly and is meant for market orders—in other words, buying assets at the market price.
- For experienced traders: if you want more options than what Express Trade allows, Pro Trade has got you covered: here, you will get detailed widgets that provide an advanced trading interface. You can place both maker and taker orders this way, follow charts and statistics, as well as everything else you may need for advanced trading.
If you reside in Canada and if you don’t already have a Bitbuy account, you can register here to start trading ADA and receive CAD 20 once depositing CAD 250+. Here are the steps on how to claim your bonus:
- Follow this link and register with the exchange.
- Make a deposit of at least CAD 250 (but you’re always free to add more!)
- A deposit bonus of CAD 20 will be automatically added to your account.
- Happy trading!