Cardano
Contents
Cardano is a technological blockchain-based platform aiming to running financial applications used every day by individuals, organizations, and governments globally. Founded in 2015 by Ethereum co-founder Charles Hoskinson, has become famous for its strong connections to research and collaborations with universities, and for its commitment to scalability and sustainability.
Cardano, and its native token, the cryptocurrency ADA, have emerged as one of the most discussed topics in the realm of cryptocurrencies, gaining momentum in the digital finance scene. Designed as a decentralized, open-source platform, Cardano offers a unique approach to the use of blockchain technology. Cardano’s development is purposefully designed to be peer-reviewed, adhering to a collection of design principles, best practices, and avenues for exploration, including the use of a modular, flexible layer architecture.
In this guide, we will delve into the nitty-gritty of this network and the ADA cryptocurrency, understanding its conception, functionalities, and why some analysts see ADA as a promising choice for digital investment.
The Foundation of Cardano and ADA
The development of Cardano started in 2015, with Charles Hoskinson and Jeremy Wood being the two main driving forces. They had both left Ethereum the previous year, as the Ethereum co-founder Hoskinson wanted to turn the organization into a company and bring in venture capital, while Ethereum co-founder Vitalik Buterin wanted Ethereum to remain a non-profit.
After leaving Ethereum, Hoskinson and Woods founded the Input Output Hong Kong (IOHK) company to develop blockchains for use by governments, educational institutions, and corporations.
The Cardano network was launched on September 27, 2017. ADA became the largest cryptocurrency by market cap to use Proof-of-Stake.
Short Facts About Cardano and ADA
Initial release: September 2017
Developers: Cardano Foundation, IOKH, EMURGO
Original authors: Charles Hoskinson and Jeremy Wood
White paper: Cardano whitepaper
Code repository: Cardanoupdates.com
Source model: Free and open-source software
Written in: Haskell
Operating system: Cross-platform
License: Apache
Timestamping scheme: Proof-of-stake
Block time: 20 seconds
Native token: ADA
ADA
The cryptocurrency ADA is the native token of the Cardano platform. It was named after the 19th-century matematician Ada Lovelace.
ADA fulfills two main roles in the Cardano network: They are used to perform transactions and users can stake ADA to participate in the consensus and earn rewards.
Symbol: ₳
Subunits: 1 ADA equals 1 million lovelaces
Supply limit: 45 billion ADA
Cardano’s Unique Approach
Cardano’s Two Layers
Unlike many other cryptocurrencies that were built with a single-layer architecture, Cardano stands out with a two-layer structure- the Cardano Settlement Layer (CSL) and the Cardano Computational Layer (CCL). This dual architecture ensures that the ADA tokens’ transfer is separated from the information and terms of the transfer, thereby enhancing security and flexibility.
1. Cardano Settlement Layer (CSL): The CSL, the first layer, operates by tracking and verifying the transaction of ADA tokens. It leverages a unique consensus protocol known as Ouroboros, which uses a Proof-of-Stake (PoS) model to generate new blocks and confirm transactions.
2. Cardano Computational Layer (CCL): The CCL, the second layer, is responsible for the computational needs of the network. It allows developers to create decentralized applications (dApps) and smart contracts, which are self-executing contracts with the terms of agreement directly written into code.
Ourobos PoS instead of PoW
The use of a Proof-of-Stake (PoS) mechanism is more energy-efficient than the Proof-of-Work (PoW) model used by Bitcoin and many other cryptocurrencies. The specific Proof-of-Stake algorithm utilized by Cardano is named Ouroboros and the development of this protocol was spearheaded by Aggelos Kiayias. Ouroboros determines how individual nodes reach consensus about the Cardano network. In addition to being more energy-efficient, it is also beneficial when it comes to scalability, thereby making it easier for the network to handle really large transaction volumes.
Research-driven Developent
Cardano is the first blockchain platform to evolve out of a research-first driven approach. It has a strong development team and the backing of academic institutions, which not only lends it credibility but also positions it at the forefront of pioneering research in blockchain technology. Cardano is commited to peer-reviewed research and collaborates with universities. Before an upgrade is put into effect, it goes through a process of academic scrutiny, and this has helped make the Cardano platform more reliable and stable.
Governance
Cardano is governed by three entities – The Cardano Foundation, the IOHK, and Emurgo. The Cardano Foundation, which is based in Switzerland, oversees and supervises Cardano and has a strong focus on standardizing and promoting the Cardano ecosystem. The IOHK is focused on engineering and is building and maintaining the Cardano blockchain. Finally, Emurgo was established to handle the commercial side of Cardano, including vairous commercial applications.
Examples of notable milestones for Cardano and ADA
2015: The development of Cardano started in 2015.
2017: Cardano was launched on September 27, 2017.
2017: ADA became the largest cryptocurrency by market cap to use the Proof-of-Stake consensus mechanism.
2017: IOHK formed a partnership with the University of Edinburgh to launch the Blockchain Technology Laboratory.
2019: The shoe manufactorer New Balance launched a pilot program to permit the tracking of OMN1S Kawhi Leonard basketball shoes on the Cardano blockchain.
2020: The Cardano network was upgraded, resulting in two address formats: Byron (legacy) addresses and Shelley (new) addresses.
2021: Cardano began offering and supporting broad decentralized finance (DeFi) services, including smart contracts and DApps.
2022: World Mobile Token, a project built on Cardano, was offering remote mobile network access from around 150 nodes in East Africa.
2022: The musician Snoop Dogg released several thousand non-fungible tokens (NFTs) for the Cardano chain.
2023: Sidechains were introduced. Within the Cardano ecosystem, they are called Partner Chains, and they are utilized for off-chain computations (smart contracts) that rely on the Cardano network for settlements. The inagrual Partner Chain was the Midnight chain for the Polkadot cryptocurrency.
2023: Cardano was mentioned as one of several enteties in complaints filed by the U.S. Securities and Exchange Commission (SEC) against the cryptocurrency exchanges Kraken and Binance. SEC alleged that Kraken and Binance were offering unregistered securities, including ADA.
The Future of Cardano
Cardano and its native cryptocurrency, ADA, represent a significant shift in the way digital currencies and blockchain technology are being developed. Its scientific approach, two-layer structure, and focus on security and scalability make it a promising platform for future blockchain applications. While still in its early stages, Cardano’s potential for growth and development is immense, and something to keep a close watch on.
Cardano has a publicly available roadmap, which lays out its future plans, and Cardano’s future as well as ADA´s is largely tied to the successful implementation of this roadmap. The roadmap is divided into five phases: Byron, Shelley, Goguen, Basho, and Voltaire. Each phase focuses on strengthening and improving the network in various ways.