What is Cardano (ADA)?
Cardano (ADA) is a third-generation cryptocurrency and blockchain-based on peer-reviewed research
24.05.2021 Editorial GetBlock Magazine
Cardano (ADA) is a third-generation cryptocurrency and blockchain-based on peer-reviewed research, making it known as “the first scientific blockchain in the cryptocurrency world.”
It is not just one of the most interesting projects in the crypto community. It is Cardano!
This project is actually a rich ecosystem whose goal is scalability and security. To achieve these goals, Cardano has applied a number of interesting technological solutions. It has shown that blockchain technology can meet the challenges of today, and it plans to revolutionize the world of finance.
Cardano is an open-source blockchain protocol launched in 2017. The project was named after the Italian scientist Gerolamo Cardano. Cardano's coin, ADA, is named after the English mathematician Ada Lovelace. The references to these two names speak to the research-oriented spirit of the project, as well as its priorities for applying complex mathematical theory in the world of blockchain.
Cardano has a distinctive two-tiered structure. The network uses a refined version of the Proof-of-Stake (PoS) consensus called Ouroboros. ADA is used for smart contracts and for facilitating transactions as well as user participation in Cardano's decentralized management solutions.
Cardano is a social and financial operating system aimed at funding blockchain-centric research, development, and business innovations. It is a platform that stimulates blockchain development, the discovery of new ways of interaction, and the creation of new ways of working.
Current and potential uses of this high-performance blockchain include transactions, smart contracts, IoT, DeFi, inventory tracking, NFT, and decentralized applications.
How did it all start?
The Cardano project was launched in 2015 by Charles Hoskinson, one of the co-founders of Ethereum. The goal of the project was to develop a next-generation blockchain, increase throughput, implement smart contracts, move away from the energy-consuming POW, and much more. In 2017, the project raised more than $60 million during the ICO.
Cardano is often referred to as the “Japanese Ethereum” because it is funded mostly by investors from Japan. There is also an organization based in Japan that is engaged in the implementation of Cardano - EMURGO.
There are five stages (or “eras,” as the developers call them) planned for the full deployment of the Cardano blockchain: Byron, Shelley, Goguen, Basho, and Voltaire. With each stage, a new set of functions will be implemented in the blockchain. For example, the recently introduced Shelley phase will include a staking reward system and the ability to delegate the ADA cryptocurrency.
Cardano is developed and managed by three separate organizations:
- The Swiss Cardano Foundation is responsible for the creation and development of the culture of the crypto project.
- Blockchain and tools for its implementation are being developed by Input Output Hong Kong (IOHK), which is responsible for the meticulous upgrading of the Cardano code base, managing and promoting the goals of the roadmap.
- EMURGO is a commercial organization that promotes Cardano industrial software.
You may ask: what about Ethereum? After all, it is Ethereum that predicts the future of blockchain technology?
Ethereum vs Cardano
Ethereum (ETH) and Cardano (ADA) are two smart contract platforms poised for significant growth and a battle for supremacy during this year.
Ethereum now has the largest developer community among other cryptocurrencies, with a market capitalization of $212 trillion. It ranks No.2 on CoinMarketRate. More than a dozen stablecoins, digital art trading platforms, decentralized lending platforms, exchanges, and more are based on the Ethereum blockchain.
A significant factor increasing the value of Ethereum today is the growth of DeFi platforms and the ETH 2.0 upgrade. The project is evolving, not standing still. A transition to PoS (similar to Cardano) is planned, and this process is broken down into large stages, the first of which has already been launched.
But, could Cardano be the future aspect of the global blockchain-based digital economy?
Unlike Ethereum, Cardano develops blockchain in stages. The first was the implementation of a staking mechanism. The next stage is smart contracts, followed by scaling solutions. This strategic approach ensures the stable development of the Cardano network.
In addition, an important feature that allows Cardano to have an advantage over Ethereum and Bitcoin is its Proof-of-Stake (PoS) algorithm, which Ethereum is so eager to switch to. This allows for a significant reduction in energy costs. Cardano also has its unique Ouroboros Proof-of-Stake (PoS) algorithm, which has ushered in a new era of energy efficiency for blockchain verification.
An important feature that can encourage users to create smart contracts on the Cardano network is the Marlowe programming language. This is a very simplified programming language that will allow even people with zero experience to create a smart contract. If this functionality works properly, Cardano will attract millions of users.
Unlike Ethereum, Cardano uses a two-tier architecture that reduces latency and increases throughput. This also solves the problem of the scalability of first-generation cryptocurrencies. After all, Cardano is a Blockchain 3.0 crypto project for a reason.
The Cardano growth factors
Cardano aims to facilitate the mass adoption of blockchain technology by encouraging governments, companies, universities, and other groups to take advantage of Cardano's broad functionality, security, and high throughput.
EMURGO has partnered with many companies, and offers various options for the practical application of Cardano:
- Tamper-proof document verification
- Internet of Things (IoT)
- Decentralized finance (DeFi)
- Anti-counterfeiting solutions for retail
- The future of the Cardano crypto project
Cardano has identified three key components and tasks that are crucial in the long run.
Firstly, the Cardano blockchain will pay great attention to exploring new ways of representing staking and delegating cryptocurrencies.
Secondly, the Cardano Foundation and IOHK have stated that they will look for ways to enable more decentralized governance, such as online voting and governance-as-a-service (GaaS) capabilities.
Finally, the most important long-term vision of the Cardano blockchain is to provide economic identity to billions of people around the world, especially in developing countries. A huge number of people on Earth do not have access to financial infrastructure, and Cardano enables millions of people to use cryptocurrencies for financial independence.
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