Cardano is a platform for developing decentralized applications (dAPPs) using smart contractsGet Wallet
What is Cardano ADA?
Cardano is a platform for developing decentralized applications (dAPPs) using smart contracts. Cardano cryptocurrency uses Blockchain ver.3.0. Its main advantages compared to Bitcoin (Blockchain 1.0) and Ethereum cryptocurrency (Blockchain 2.0) are the expanded capabilities of using a decentralized platform, high scalability, and enhanced security. The Cardano blockchain ecosystem is an effective network for launching financial applications.
Ethereum programmer Charles Hoskins left the Ethereum project in 2014 to found “IOHK” with his partner, Jeremy Wood. ICO went on two years from 2015 to 2017. As a result, the project team raised $ 63,000,000. After launching the project, Cardano's market capitalization increased to $ 500,000,000 in a single week.
About 95% of all tokens were bought by Japanese investors, leading Cardano to be unofficially called “the Japanese Ethereum.”
Scientists from leading world universities such as The University of Connecticut, The University of Edinburgh, and the National Kapodistrian University of Athens, worked on the technical base of the Cardano ADA cryptocurrency.
Cardano (ADA) has its own unique ecosystem. The mission of the Cardano ecosystem is to improve the positive aspects of previous blockchain ecosystems and eliminate their shortcomings, beginning with solving the problems of scaling and energy consumption.
In the Ethereum network, writing to the blockchain and launching a smart contract are performed in the same transaction, increasing the size of the required gas. The Ethereum blockchain does not allow you to store these types of data separately from each other. This Ethereum flaw became the basis for the development of Cardano (ADA).
The Cardano network has a two-layer structure:
The First Layer
The Cardano Settlement Layer (CSL) is responsible for the economy of tokens and user account balances. Users can make ADA transactions, with the information written as follows: 10 ADA sent from wallet A to wallet B. In simple terms, the CSL layer consists of code responsible for the implementation of ADA and user accounts in the Cardano system. It’s very flexible, easily customizable and can be used as a standardized transaction protocol.
The Second Layer
The Cardano Control Layer (CCL) is responsible for launching smart contracts. It supports some regulatory functions; for example, digital identification of network users. Advantages of using a two-layer system:
- Increased transaction privacy. Payment information does not include much of the data that is required when sending Ethereum and NEO transactions.
- Higher security level for blockchain updates - there are two independent layers in the ecosystem. Changes in any of the layers are safe for another layer. For example, you can make changes to the code level of smart contracts. However, the correct display of user balances will not be affected. Also, it will not affect the process of sending and verifying transactions.
The Cardano project continues to develop. The “Goguen era” update (smart contracts) adds the ability to build multi-functional DApps on the Cardano blockchain. Goguen's task was to launch “Plutus”: a purpose-built smart contract development language and execution platform, using the functional programming language “Haskell”. “Goguen era” also made Cardano available to a wide audience through “Marlowe”. It allows financial and business experts with no technical knowledge to create smart contracts.
The “Basho era” update was designed to increase scalability. “Basho era” is improving the underlying performance of the Cardano network, makes support growth better, and adoption for dAPPs with high transaction volume.
Cardano Cryptocurrency (ADA) uses the Proof-of-Stake (PoS) consensus method, based on the special Ouroboros protocol, which was developed by scientists from universities in Edinburgh, Connecticut, IOHK, and the Tokyo Institute of Technology. According to the creators of Ouroboros, this is the first and only protocol with mathematically-proven security.
Cardano uses the Haskell (hæskəl) programming language, one of the most perfectly and safe languages. The enhanced Proof-of-Stake (PoS) Ouroboros protocol provides voting for all ADA token holders, similar to the Casper Ethereum protocol except Ouroboros is the first consensus algorithm that can be proved using mathematics. Blocks formation and verification of Cardano transactions.
The work of the blockchain is divided into “eras” (the lifetime of each “era” is 10 minutes,). Each “era” has slots. These slots are blocks that will be created. Using a special algorithm, one of the token holders is randomly selected to “close” each slot. They act as a consensus node aka a slot leader. Token holders can also “vote” for nodes using their ADA (the more coins you have, the more significant your vote is), thus increasing their chances of being "chosen". The slot leader confirms the slot, proceeding to confirm the next randomly selected slot. After the end of the “era”, rewards for closed slots are distributed among slot leaders.
After the end of one “era”, the next begins, and the whole process is repeated (i.e. slot leaders are re-selected).
A part of the award (25%) is allocated to the Project Fund. Thanks to these funds, various projects can be financed for the development of the Cardano cryptocurrency.
The “Shelley era” update helped to establish this scheme, designed to provide a smooth transition with low risk, without interruptions in service. Shelley includes critical steps to optimize decentralization processes.
Cardano cryptocurrency is not just the project of one developer but three: IOHK, The Cardano Foundation, and Emurgo. IOHK (Input Output Hong Kong) was created by Charles Hoskins and Jeremy Wood in 2014. The company is involved in:
- Development of Cardano’s Blockchain technology
- Creating a special wallet
- Improvement of Cardano protocol
IOHK isn’t only responsible for creating engineering solutions in the field of blockchain technologies. The team has its own research base, represented by 17 professionals, which supports other cryptocurrency projects, for example, Ethereum Classic.
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