How does the Cardano blockchain influence the price of ADA?

Hi everyone, I’ve recently joined the Cardano community and invested in ADA and I would really like to know how they are actually related. Let’s say the Cardano blockchain was to become really successful in the future, promoting mass adoption. We would definitely see the price of ADA go up. But why so? That is my question. Buying ADA is not exactly buying a share of the Cardano blockchain per se. How is it that we can be so sure that the price of ADA would go up as Cardano becomes increasingly successful? Would really love a simple, step-by-step explanation as I’m pretty new to the crypto space. These explanations would also help new-comers and/or those that don’t really understand the dynamics between ADA and Cardano a lil’ better in the near future! Appreciate the effort from you guys, thank you in advance!

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This is also something im wondering about.
Is the value of ADA only in investors heads, or is it like fundamentally linked to Cardano success?

My understandin is that everything you do in cardano network is using ADA, fuel is a bad word, but basically Cardano is fueled by ada? So because quantity of ada is maxed and we see increasing use of cardano / ada, that means it will also pump up the ADA price? So in theory even IF (not the case) investing people like me dont value/like ADA at all, the cardano itself will boost ADA price more and more when cardano network is integrated to the world were living?

Am i right or wrong? :slight_smile:

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Hi there @Terry & @J0N1S4 ,

as far as I know, the value of ADA is depending on the market cap and also the total circulating coin at the moment.

More success means more people adopt and use/buy ADA → it brings higher market cap for Cardano.

Maybe other senior member could give some more detail explanation about it.

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First you have to ask what’s the value of fiat currencie, aka “money”, itself.

After that, work your way to the top where the cryptos are establishing themselves.

I’ll leave you 1 thing to consider; is a centralized economic/financing system better than a decentralized one?

I too suggest the works of @arielfavio, which detail all you need to know about crypto-economie and you can just parallel it with the structural economic paradigm we are ATM living in.

cheers

EDIT: It would be delightful if @cassandre has her saying on this topic, since her area of expertise is intrinsic value assets.

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Thank you @jpsrrv

One thing I can tell you for sure in that there had been an increased demand for exotic and finished assets investment these past years. When our parents and grand parents were buying gold and diamonds, we now buy crypto. I think gold and diamonds still have bright days ahead as they have been valuable for centuries, we won’t see yet a big drop of value.

On the other side, they are indeed centralized assets, and I feel that there is a lassitude from our generation to physically possess things. In my opinion locking our assets in a vault belongs to the past. That’s why crypto is a great deal for us.

Nevertheless, I’ve recently heard on Bloomberg that 20% of the current dollars in circulation have been created last year. So I think there might be a general temporary collapse in cryptos after the end of the vaccination campaign in the US, when banks will cut cash. Cryptos would be first to blow up in my opinion. I strongly believe in blockchain technology though and I think we are only at the beginning of a huge revolution so won’t sell my ADA! Would be curious to have your opinion on this too, shall I create a topic for it?

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I think me and the open poster thinks this in a very straightforward way :slight_smile:

My mental problem with this is that i cant connect the Cardano future success to ADA pricing. I totally understand the CARDANO potential, the future and the vision. Great awesome stuff with great effect to the world. This is very interesting project and im sure it (Cardano) will success.

But that all will be Cardano success. Not ADA success. All that good awesome stuff can happen to cardano, without ADA price increase? So thats what i ment that is Cardano success linked to ADA success. Because i dont know how the blockchain world goes.

So what i think, increasing demand and use of cardano, increases ADA price, BECAUSE using cardano/transactions needs ADA to work? And thats why ADA price will increase? Not ONLY because of it, but ALSO because of it?

Sorry for being stupid :smiley:

There was something i wanted to hear, thanks :slight_smile:

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You are right. Cardano is using “proof of stake”, where the Cardano network was supported by several stake pool that runs behind it. And each stake pool requires stakes (in this case ADA from the delegator). If more people use Cardano network, that mean we need more stable stake pool and more delegator staking their ADA on the pools.

More delegators means more people buy and stake their ADA. That means ADA market cap is higher with limited coin in the circulation.

Hope it answers your question @J0N1S4 :beer:

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Sir, that is absolutely beautiful answer for me :slight_smile: - Yeah, im still at this level :smiley: .
Now i know that Cardano and ada ARE linked value-wise, and that means when i 100% believe cardano success, i also believe ADA success. And that is something what makes me investing to ADA. Not just loving the project without ADA.

Thank you all for the technical and meta answers! :slight_smile:

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You’re welcome @cassandre, I’m the one who has to thank for your reply.

Gold and silver are, to date, the most resilient assets to have in terms of counter-inflation.

One thing that crypto provides more affordably and easy-to-handle than gold, for example, is the financing capabilities it opens to the commun person.

Au contrarie, dollar debasement will propel the governments to crypto, IMO. Since it’s the most affordable thing to do; they are just thinking how to centralize it as much as they can… And don’t forget that WEF is already stating digital coins are the future.

I didn’t follow the purpose for what you want to create a topic. Please explain! :slight_smile:

@j0n1s4 if you want to fully understand crypto you gotta do the heavy-lift! :wink:

I’ll elaborate my first reply. What will provide value to Cardano, which is to say high prices of ADA (but not limited to it), is the use cases and the trust in the network.

ADA coin is just the medium to support the network, and yes theoretically the price of ADA is aggregated to the Cardano network.

Again, it’s WAY more intricate than this…

cheers

EDIT: One big thing to have in consideration about the creation of blockchain itself, trust systems.

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Once Quantitative easing stops, and quantitative tightening starts, crypto assets will loose their main tailwind. QE was used to boost growth with no inflation at the horizon; situation is changing fast.

Was just willing to debate on this :slight_smile:

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I’m all for it! :smiley:

It’s going to be up to the retail investors what they will do with the inflow of cash, hence, possibly triggering the biggest bull run to date.

In the actual paradigm we must take in consideration the geo-political events happening in the sector which is IMO one of the most influential ever, energy.

Energy will have a big say to what happens or not, and since btc and eth have gargantuan energy consumptions Cardano will shine like a supernova!

I must take a mea culpa, I have 0 knowledge of what happens in Asia; to say that my opinions are solely based in what I know about the West!

cheers

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I agree with you, it does make perfect sense and I really hope that is what gonna happen. I still think the pandemic has been a particularly prosperous period for crypto and I just try to mentally prepare myself if a small collapse happens once this is all over :wink:

The plandemic is just 1 cog in the severely malfunctioning machine, consisting in this fruitless attempt to deprive us from what we are owed; beacuse yes

We can rewind 1 year with btc trading below 4k a. dollars and cardano below 4 cents.

Point being, it won’t be like that again. It did really backfire for the ones who wanted to break the morale of the troops!

There are things happening this year that will shy most of what happened until now.

Let not be afraid though, it’s all according the plan! :smiley:

Pleasure talking with you @cassandre!

cheers

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Big thank you to those that replied! Clears up my doubt!