Why the ‘dogecoin millionaire’ plans to buy Cardano next
In February, Glauber Contessoto, 33, invested all of his savings in dogecoin, a meme-inspired cryptocurrency that surged in value this year. And about two months later, in April, he says he became a dogecoin millionaire on paper.
Now, Contessoto plans to go “all in” on another cryptocurrency, he tells CNBC Make It. His next choice is the Cardano blockchain and its altcoin ADA, which launched in 2017 and recently became the third-largest cryptocurrency by market value, behind bitcoin and ether.
Although he has no plans to sell his dogecoin, “I’m going to start buying up as much Cardano as humanely possible with every bit of money I start making from now on,” he says.
Contessoto plans to wait until there is a dip in the price of ADA to begin investing, he says, just as he did with dogecoin.
However, many financial experts would advise against going all in on one investment, especially within the crypto space. Cryptocurrency can be a very risky investment in general, and experts say altcoins can be even more so.
“Risk can be measured in a variety of different ways,” Meltem Demirors, CoinShares chief strategy officer, previously told CNBC Make It. But “many of these assets are much more risky than bitcoin and ethereum.”
It’s possible to lose your entire investment regardless of how careful you are.
Nonetheless, Contessoto is still bullish on both dogecoin and Cardano.
Since Contessoto didn’t buy ether, the cryptocurrency native to the Ethereum blockchain, early on, he views Cardano as the “next best bet,” he says. Supporters of Cardano, like Contessoto, see it as a competitor to Ethereum since its creator, Charles Hoskinson, is also a co-founder of Ethereum.
Cardano vs. Ethereum
However, critics of Cardano say it has a long way to go before measuring up to Ethereum.
Currently, Ethereum operates on a proof of work, or PoW, model, where miners must compete to solve complex puzzles in order to validate transactions. But soon, Ethereum plans to migrate to a proof of stake, or PoS, model, where people can mine or validate transactions according to how many coins they hold. Supporters of PoS say it uses less energy.
This migration is part of a much-anticipated upgrade to Ethereum that its developers say will improve the blockchain and its efficiency significantly overall.
However, Cardano already operates on a PoS model. Because of this, the Cardano community sees the blockchain as a more environmentally friendly alternative to Ethereum.
But unlike Ethereum, Cardano is still working on its smart contract capabilities, which it plans to release as part of an upgrade later this year.
This is in part why billionaire investor Mark Cuban, for example, thinks that so far, Cardano’s use cases fall short. “Are you, personally, able to use [Cardano] for anything? If so, what have you used it for? That’s the question I ask about all crypto [before investing],” Cuban tweeted in May. “Do you find yourself using it for anything that you find value in?”
If you’re planning to invest, keep in mind that financial experts recommend being very careful when investing in cryptocurrencies overall due to their volatile and speculative nature.
Some experts warn to be especially cautious when investing in altcoins in particular, since many of them lack the scarcity and technological development that bitcoin has, for example. Investors could get burned, and in turn, should only invest what they can afford to lose.
While Contessoto acknowledges that “it’s still early on” for Cardano, “I’m going to be the biggest Cardano supporter,” he says. “I’m just waiting on a massive dip before buying into it.”
As of 10:50 a.m. EST on Thursday, Cardano’s ADA is trading at around $2.60, according to CoinMarketCap, and dogecoin is trading at around 27 cents.
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