What is Cardano? ADA Explained
The first decade of cryptocurrency, the 2010s, was primarily dominated by Bitcoin and Ethereum. There are, however, more ambitious options, such as Cardano (ADA).
What is Cardano?
Cardano is a peer-to-peer cryptocurrency that was established as an open-source, decentralized blockchain project. It features a layered design that makes smart contracts possible, allowing for an adaptable and expandable platform without sacrificing security.
Engineers, academics, and an Ethereum co-founder make up the Cardano team. Together, they are focused on ensuring that Cardano achieves its original goal of operating a digital platform devoid of financial intermediaries that is more inclusive and long-term than other blockchain platforms.
The infrastructure load of rising prices, energy usage, and sluggish transaction times limit scalability, interoperability, and sustainability for PoW networks like Ethereum.
Charles Hoskinson, the co-founder of the proof-of-work (PoW) blockchain Ethereum, recognized the relevance of these difficulties to the blockchain network, so he began creating Cardano and its principal cryptocurrency, ADA, in 2015 and launched the platform the ADA token in 2017.
After whom is Cardano (ADA) named?
The platform of Cardano is named after Gerolamo Cardano, an Italian polymath, and mathematician. But, surprisingly, its native asset ADA is called after Ada King, Countess of Lovelace, and the only child of famed poet Lord Byron.
Ada Lovelace was a talented mathematician, writer, and one of the world’s earliest computer programmers. Lovelace realized the mathematical promise of computers early on, publishing the first algorithm that a computer could perform in 1843. It is said that computers, as we know them now, would not exist if Lovelace’s work had not been done.
Vision of Cardano:
Cardano’s primary use case enables transactions in its native cryptocurrency, ADA, and allows developers to construct secure decentralized apps.
On the other hand, Cardano stands out from other blockchain projects by stressing a research-driven approach to design to achieve intellectual standards to accelerate the adoption of its platform.
While Cardano does not guarantee any new ground-breaking features, consumers and developers may discover that its coin provides enticing improvements based on scientific study and formal verification, a mathematical technique for verifying its code.
Cardano is developed in five stages as a decentralized application development platform with a multi-asset ledger and verified smart contracts. Each of the five stages is referred to as an era and is named after a significant historical figure. The five periods, or stages, are as follows:
- Byron era: Establishes the network’s fundamental design and verifies its first functionality to ensure its correct operation.
- Shelley era: The Cardano mainnet is launched, and the blockchain network’s decentralization starts.
- Goguen era: Creates a smart contract platform that enables the creation of decentralized apps.
- Basho era: Scaling solutions would be introduced, allowing for blockchain optimization and performance improvement.
- Voltaire era: Creates an independent network by introducing treasury and voting mechanisms.
Cardano has completed the Shelley step and is now working on the second half of the five phases. Thus, even though there are five different phases, many aspects of each operate simultaneously.
Before being incorporated into Cardano, each phase passes through a series of steps. Each phase of the procedure has been based on extensive academic study. In addition, each piece of open source code must be carefully verified to satisfy predefined technical standards before being implemented; thus, prototyping is a crucial element of the process.
Launch of Cardano
Three different and independent groups maintain Cardano.
The Cardano Foundation, a non-profit corporation, is the legal custodian of the Cardano brand and is responsible for its primary management and control. In addition, the foundation raises the protocol’s exposure worldwide, develops use-case opportunities, and establishes connections with politicians, regulators, and academics.
IOHK, a research and development firm formed in 2015 by Charles Hoskinson and Jeremy Wood, assisted in the design and engineering of the Cardano blockchain.
Emurgo is a for-profit branch of the Cardano network that is promoting its commercial adoption. Emurgo is one of the network’s creators. It aids with the adoption of Cardano’s technology by companies and bigger organizations.
Approximately 31 billion ADA were generated at its introduction, roughly 26 billion of which were sold on the market by a Japan-based business appointed to handle the sale. In addition, participants may buy vouchers that could be traded for ADA when the program is released.
Cardano utilizes Ouroboros to protect its network, a consensus method akin to Proof of Stake (PoS) that allows users to validate transactions and earn additional ADA.
Cardano’s Ouroboros protocol was the first PoS system that was not only shown to be safe but was also the first to be informed by sophisticated academic study. The research-based framework anchors each development phase, or era, in the Cardano roadmap, incorporating peer-reviewed insights with evidence-based methods to progress toward and achieve milestones related to the future directions of the blockchain network and the ADA token’s use applications.
This is how the Ouroboros process works:
- The network chooses a few nodes at random to have the opportunity to mine new blocks. Slot leaders are the nodes that control the flow of data.
- The blockchain is divided into slots, and each is referred to as an epoch.
- Slot leaders have the power to mine their epoch or a subset of an epoch. Anyone who assists in mining an era or a portion of an epoch is rewarded for their efforts.
- An era can be partitioned an unlimited number of times. As a result, the Cardano blockchain is theoretically indefinitely scalable, allowing it to process as many transactions as needed without experiencing a bottleneck.
Is Cardano truly better than Ethereum?
Cardano and Ethereum have similar aims and ambitions to become the world’s leading decentralized blockchain platform for developing new tools and protocols. When Hoskinson left Ethereum, he saw the need for a new type of blockchain that could be scalable and safe right now, two things he felt Ethereum would never be. Ethereum is now experiencing scalability difficulties and is currently improving scaling through its second iteration of the Ethereum blockchain. While Ethereum’s market capitalization is around ten times Cardano’s, the project has had a substantial head start.