The Cardano project and its associated cryptocurrency ADA have been the subject of much discussion in the community ever since it was launched in 2015. Because of the academic rigor used in its development, Cardano is somewhat of a unique cryptocurrency.
Cardano is a blockchain platform created by the efforts of Input Output Hong Kong and Charles Hoskinson. Charles Hoskinson was used to be a programmer at Ethereum and contributed to the development of Bitshares (specifically, the Invictus Innovations project).
In this piece, we'll look at Cardano and its Ada token and compare it to BTC and other key cryptocurrencies.
What is Cardano (ADA)?
Cardano is a decentralized, open-source blockchain platform based on the Proof-Of-Stake consensus mechanism. The goal of the project is to create an energy-efficient and environmentally friendly platform for smart contracts, which can become an alternative to Bitcoin and Ethereum. And while BTC mining consumes a huge amount of electricity without actually producing anything in return, Ethereum blockchain is famous for its commissions.
Ada, Cardano's own currency, is used to perform transactions on the Cardano blockchain.
A feature of Cardano is the division of the blockchain into several layers. The first layer, called CSL (Cardano Settlement Layer), is responsible for the blockchain's user balances and its overall economy. The second layer is CCL (Cardano Control Level), which contains all the regulatory tools and all the functionality of smart contracts.
What is the Cardano (ADA) roadmap?
According to the developers' idea, the development of the project will take place in five stages. Each of them is called an "epoch", and each epoch is named after a prominent cultural or scientific figure.
Includes the development of the initial components and the preparation of the calculation level for decentralization. Named after the poet Lord Byron, father of Ada Lovelace
There is disagreement about the origin of the name: either in honor of Percy B. Shelley, or in honor of his wife Mary Shelley. Well, the technical side of this era is a full transition to decentralization and the emergence of staking pools
It is characterized by the implementation of native tokens, the use of which does not require the creation and execution of smart contracts. T It is named after the famous American mathematician Joseph Goguen
This is also the era of optimization and scalability
Should mark a complete transition to democratization and make the Cardano system fully self-sufficient
Cardano is being developed as a "third generation" blockchain, designed to solve the scalability problems of the earliest generations e.g., Bitcoin and Ethereum.
Proponents of this classification believe that previous generation blockchains suffer from bottlenecks that significantly limit the throughput they can handle.
This makes them an inefficient choice for mass use worldwide.
As evidence of this problem, we can look at the fluctuating transaction times of BTC and ETH.
Cardano aims to increase throughput in several ways.
One of the most significant pillars of this goal is the Proof of Stake (PoS) consensus mechanism called Ouroboros.
Ouroboros reduces energy costs compared to Proof of Work (PoW) by giving proven security guarantees.
Cardano's second-layer solution for further scaling is Hydra, named after the mythical creature having the same name. The idea is that throughput increases as each new node is added to the network.
The hard fork combinator is also a key feature of Cardano, which enables hard forks without interrupting or restarting the blockchain. The success of the Shelley update testifies to the effectiveness of this approach.
Cardano (ADA) key features
- Eco-friendliness. In his interview with Forbes magazine on April 26, 2021, it is claimed that this project is 1.6 million times more environmentally friendly than Bitcoin;
- Transaction speed. As we wrote above, it is much faster than ETH and Bitcoin;
- Cardano's strong points are the academic and scientific philosophy behind it.
What is the ADA token?
ADA – Cardano's token is the name of the English mathematician Ada Lovelace. Although this lady lived in the 19th century, she is considered the world's first programmer. She was honored for writing the first program for a computer designed by her husband.
The place of the coin in the rating and its current price you can always find out here.
The token is both a digital currency and a way to make transactions on the Cardano network (similar to how Ethereum requires ether to make transactions). ADA holders also have a stake in the Cardano network, which can be used in stake pools to earn staking rewards
How can you use ADA?
1. Participate in project management:
The more coins you have, the more your voting rights are enhanced. For example, you can vote in the Project Catalyst fund;
2. To stake ADA;
3. Buy, sell, exchange, transfer tokens;
4. Participate in the development of the company's DeFi projects, such as SundaeSwap and MELD.
How to store Cardano (ADA)
The project has its own official wallet. It is called Deadalus. To use it, you will need to download a full copy of the Cardano blockchain.
Lightweight wallets that do not require a full blockchain download are Yoroi Wallet and AdaLite. ADA can also be stored on cold storage hardware wallets such as Ledger and Trezor through Daedalus, Yoroi Wallet and AdaLite.
It is not possible to mine a coin in the usual "miner's" way. Instead, the ecosystem uses forging, which is based on the Proof-Of-Stake algorithm. You don't need computing power to make money in this ecosystem. You won't need to spend money on electricity either: you just have coins in your wallet - and your share of ownership will gradually grow. Of course, the more coins in your wallet, the faster your share of ownership grows. But no one has ever canceled the risk of a drop in the exchange rate.
Cardano is an ambitious project that aims to create a blockchain infrastructure in the crypto ecosystem. Although the project is progressing more slowly than some expect, it also has high goals.
To summarize all of the above, when making a decision to purchase ADA should take into account the risks and, of course, do not forget to conduct your own research.