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What is Cardano(ADA)?

BitForex Editor
Dec 30, 2020

Cardano(ADA) is one name that is common in the crypto world as it has successfully become one of the fastest-growing digital assets in the entire crypto industry. Based on market capitalization, since its release in 2015, ADA has not only garnered significant hype, but it was also listed as one of the top 10 currencies. Its technology continues to advance at rapid speed as it aims to build a massive blockchain ecosystem that can take on the likes of Ethereum.

Cardano(ADA) distinguishes itself from other digital assets by making use of a one of a kind multiplayer architecture and mathematical principles in its consensus mechanisms. Today, a lot of users are of the opinion that cardoon is the next generation of cryptocurrency solutions. However, before going into details about Cardano's technology and why it is regarded as an exciting cryptocurrency, it is first of all necessary to know what Cardano is.

What is Cardano?

Cardano(ADA), like other cryptocurrencies, is a digital coin that can be used to receive and send funds or store value. Cardano is decentralized like most other blockchains, which means that it is not controlled by any single authority. A lot of people assume that ADA and Cardano are the same things, but in a real sense, there is a slight but distinct difference; Cardano is the name given to the blockchain that allows users to receive and send funds, while ADA is the name of the cryptocurrency. The ADA cryptocurrency operates on the Cardano blockchain, which is a first-of-its-kind decentralized network based on mathematical and scientific principles that were designed by professionals in the area of engineering and cryptography.

 The Cardano blockchain serves the purpose of creating decentralized applications and protocols as well as building smart contracts. As earlier implied, the native currency of Cardano is ADA, and it serves the purpose of performing operations on the Cardano blockchain. To add, the Cardano blockchain also allows for the ability to receive and send funds for reduced fees. According to the creators of the platform, the key design principles of Cardano are interoperability, scalability, and security. It is also known as a smart contract platform and third-generation cryptocurrency which aims to improve upon the scaling issues of bitcoin.

Who Created Cardano?

During the earliest days of Ethereum, Charles Hoskinson, one of its co-founders, realized the need for a more standardized as well as scalable blockchain. Hoskinson, who had a solid mathematics background, began considering more scientific means of building a blockchain. During this period, Hoskinson got across to Jeremy Wood, who was a former co-worker at Ethereum. Jeremy was also seeking ways to create a better blockchain and smart contracts platform. In no time, both Hoskinsow and Jeremy began pursuing Cardino to eventually what it exists as today.

Though Jeremy and Hoskinsow are the brains behind the smart contract platform and core principles that make up Cardano, they, however, do not operate or own the Cardano blockchain. In a real sense, there are various stakeholders involved in the project, including the Cardono foundation, Embargo, and IOHK (Input-Output Hong Kong), which was established in 2015 by Jeremy Wood and Charles Hoskinson. IOHK is a development and research company that has aided with the engineering and design of the Cardano Blockchain.

What is The Cardano (ADA) Road map?

The Cardano roadmap revolves around five major phases: Voltaire, Shelley, Basho, Goguen, and Byron. The first phase which signaled the launch of the network alongside other basic functionality like transferring Ada is BYRON. In 2020, the SHELLEY hard fork took place, and it offered further steps towards decentralization. Stake pools were run by ADA holders while the Cardano community operated the nodes.

How Does Cardano (ADA) Work?

Cardano (ADA) was established as a third-generation blockchain, which was aimed at solving the scalability issues associated with generation one and generation two, for example, Bitcoin and Ethereum. Based on the proponents of this classification, past generation blockchains are faced with bottlenecks that limit and reduce the number of throughputs they are capable of handling. This, in turn, makes them an inefficient choice for global mass usage.

One of Cardano's goals is to improve throughput in various ways. Their Proof of Stake (PoS) consensus mechanism known as the "Ouroboros" is one of the most significant pillars of their goal towards improving throughput. Ouroboros doesn't just provide provable security, but it also reduces energy cost as opposed to Proof of Work (POW).

Cardano's layer two solutions in other to provide further scalability is known as 'Hydra," and it is based on the idea that as each new node is added to the network, throughput is increased. Another key feature of Cardano is the hard fork combinator, and it allows hard forking without restarting or interrupting the blockchain. Significant evidence of the effectiveness of this approach can be seen in the success of the Shelley update.

Key Features Of Cardano (ADA)

As earlier stated, the scientific and academic philosophy behind Cardano serves as its strong points. The team responsible for Cardano has published over 90 whitepapers for the underlying technology.  The Cardano project has a good outline roadmap while the network aims to have baked in interoperability, scalability as well as security.

Though it is not fully functional, the Cardano blockchain will in the future provide the opportunity for scalable smart contract functionality. Cardano could also possess all the essential building blocks which could serve as a potent fintech disruptor. Similar to Ethereum, Cardano's use case possibilities are vast. Cardano aims to serve as the base layer for applications to be built on top.

While Cardano has made big promises, it is still yet to deliver as its development is relatively slow.

What is The ADA Token?

As earlier stated, the Cardano token is known as ADA, and it was named after Ada Lovelace, a 19th-century mathematician. An estimated 57.6 percent of the ADA supply was distributed in an ICO or Initial Coin Offering, where Cardano raised a total of 62.2 million dollars. The Token is not only a digital currency, but it is also a means of making transactions on the Cardano network.

There is no doubt that Cardano aims to provide blockchain infrastructure in the crypto ecosystem; however, the project is quite ambitious and aims high even though it progresses slower than some may expect.

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