What is Cardano (ADA) Coin & How Does It Work?
Cardano Network and ADA coin review. Learn about tech details, history, and the future of Cardano.
|Consensus Mechanism:||Proof-of-Stake (PoS)|
Table of Contents
- What Is Cardano?
- Cardano History
- How Cardano Works
- ADA vs BTC: Is Cardano Better Than Bitcoin?
- Where Can I Buy Cardano?
- Where to Store ADA?
- Can I stake Cardano?
- How to Mine Cardano?
- ADA Future (Roadmap)
What Is Cardano?
It is a locomotive of the third (and by far the last) generation blockchain. It has gained quite an impressive success in market capitalization. So far ADA has reached the #3 spot among the crypto coins with a market cap of over 80 billion dollars (by Aug 2021), having an average daily trading volume of over four billion dollars.
Cardano coin is based on open-source decentralized Proof-of-Stake blockchain. The network is claimed to be based on mathematical academic research. This is aimed to guarantee an incredible proven level of security to the whole system.
Cardano was released four years ago, in 2017.
As Cardano Foundation states, the project was founded to improve scalability, interoperability, and sustainability of current blockchains by that time. By the project, we mean both Cardano blockchain and ADA coin.
The currency has finished its first development stage. The second and the third stages are now in progress. There are five stages in the development plan. After they are delivered, the whole new project evolution paradigm is going to take place. This paradigm is all about community-driven decisions.
The concept is that ADA stakers decide on the coin’s future. To be honest, we have not seen anything similar in any project of this scale.
What does Cardano HardFork mean?
The next Cardano Hardfork will introduce smart contracts to the ecosystem. The hardfork is called Alonzo. It was announced this August and is going to take place on September 12, 2021.
Smart contract languages like Plutus (native), Marlowe (for finance), and Glow (for DApps) will soon be integrated with the Cardano stack.
We will keep you updated with more details on this subject.
How Cardano Works
Cardano is the third generation blockchain. It means that its creators learned from the two previous blockchain generations to provide us with an expanded blockchain experience.
Blockchain generations in brief:
|2||ETH and ETH-based tokens|
|3||Improvement of scalability, transaction price, and transaction speed||ADA, DOT, ETH 2.0 (in development)|
So far, the third generation is top-notch. There are no fourth-generation blockchains yet. The rumor is that there are going to be some fourth-generation blockchain projects, but they all are in the early development phase at best. No worries, we will keep you updated on any remarkable developments in this direction!
ADA vs BTC: Is Cardano Better Than Bitcoin?
It depends on what aspect we are talking about. At some points, ADA takes over Bitcoin, but there are also situations when BTC might suit you more. Let’s take a closer look.
BTC pros: adoption state, volatility.
ADA pros: transaction speed, transaction fee, smart contract support in the future.
It is a good question to decide which coin to use. Sometimes using both of them is the answer. But there is no question where to store them. The answer is always Guarda Wallet.
Where Can I Buy Cardano?
You can use any major exchange or try Guarda Wallet to buy Cardano crypto. See the instructions below. It is easier to start staking ADA when you buy Cardano right in Guarda — fewer clicks and a shorter time period between buying and staking.
How to Buy ADA Using Guarda?
Follow these steps to buy ADA with Guarda:
- Log in or register in the wallet
- Click on “Buy” in the top menu
- Find Cardano in the list of currencies.
- Type the amount of fiat you want to spend on ADA
- In the opened window type in your card details and proceed with the purchase
Where to Store ADA?
Like any other crypto, Cardano can be stored in few ways:
- Cold (offline) wallet
- Hot (online) wallet
The difference is that cold wallets are not connected to the internet, hot wallets are connected to the Internet. That is why cold wallets are thought to be more secure though less comfortable to use. Hot wallets are easier to use when you think about buying Cardano crypto. If you decide to store crypto with Guarda, you have plenty of options to choose from:
Can I stake Cardano?
Yes, this is why it has a Proof-of-Stake mechanism under the hood. Try staking ADA with Guarda The details:
- Start from just 10 ADA
- Manually claim rewards
- You do not pay validator costs
- 100% uptime
- Your coins are not locked
- You get a reward every five days
What is a Cardano Staking Pool?
As Cardano Foundation calls it, it is a Cardano network node with a public address that other users can delegate to, and receive rewards. Nodes are what make cryptocurrency so efficient and secure. More nodes - faster transactions. You can delegate coins to stake pools if you want to take part in the project and get rewards.
Staking helps all PoS coins stay effective. Participation in staking is always volunteer. Remember, that staking is one of a few ways to earn ADA as long as it can not be mined.
Is Staking Cardano Worth It?
It is for you to decide because Guarda cannot give you any financial advice. Right now you can stake ADA on our own validator and earn around +5% APY.
How to Mine Cardano?
It is not possible by design. As a Proof-of-Stake project, ADA can only be bought, transferred, or staked. You can do all of it with Guarda on any platform. Read more about staking above.
ADA Future (Roadmap)
The Cardano Foundation roadmap consists of five directions. Each of them has its codename and covers certain development subjects. These directions are called ‘eras’ within the Foundation. Each era is named after a culture or science celebrity.
Here are the eras:
- Byron (foundation). The very first steps of establishing the project, creating a community, and making people notice it. A few products were launched during this era:
- ADA coin
- Ouroborus consensus protocol
- Daedalus wallet launch
- Shelley (decentralization). Its official motto is to make Cardano more useful, rewarding, and valuable for both old and new users.
The network growth and development with decentralization as a main target of the era. More nodes started to be run by Cardano community members, thus making the whole system less centralized and less vulnerable.
Such an evolutionary step made it possible for users to stake their coins in stake pools. Stake pools have increased the attractiveness of staking and increased staking rewards. Actually, this is a good example of a positive feedback loop
- Goguen (smart contracts). By adding a smart contract function to the blockchain, it will be then possible to build and run dApps upon it. It’s also planned to execute smart contracts in such a way, so they will be easily maintained even by people without a technical background or specific knowledge. In simple words: more dApps - more ADA-based tokens - more users - more profit for everyone.
They also plan to implement a multi-currency ledger into the blockchain. This will help create more diversified dApps, natively-supported tokens, and cryptocurrencies.
The Smart Contracts era will increase ADA’s adoption by creating a new network usage purpose. It will become easier to integrate side smart contracts and dApps that use multiple cryptocurrencies.
- Basho (scaling). Focus on the network performance. Ongoing plans to introduce sidechains that are designed to be compatible with the main Cardano Network. This will increase the main network capacity and will not affect its security.
Cardano developers want to add more goals to be reached for this era, but network performance is all we know so far.
- Voltaire (governance). Here comes some sort of democracy ambitions. Voting and treasury mechanisms are promised to be released. This will help stakers choose where the whole project will go. They say that by the end of the Voltaire era you and other Cardano community members will solely decide the coin’s future.
Voting will be based on the amount of coins that you are staking. The exact procedure and the list of topics that you can vote for are yet to be announced.
Treasury option means that a tiny part of all transaction fees is put to a special fund. This fund is then used to support the development of project features assigned after the voting is complete. The exact percentage of all transaction fees to be added into that fund and other conditions are yet to be determined and published by the foundation.
The Byron era is now complete. Shelley and Goguen are in progress. Basho and Voltaire are to be announced.