Cardano is a decentralized proof-of-stake (PoS) blockchain platform and has the token – ADA as its crypto token. It is based on scientific philosophy and a research-first driven approach. In PoS, the blocks are verified by the machines of coin owners where the owners keep their coins as collateral to validate blocks.
Cardano’s ecosystem has been developed by highly qualified engineers and academic experts experienced with cryptography and blockchain. Major motivation of this ecosystem is sustainability, scalability, and transparency. It was started as an open source project with an aim to deliver an inclusive and fair infrastructure for financial and social applications on a global scale.
Cardano has been written in Haskell programming language, which makes it easier for components to be tested in isolation, and makes sure that the code is correct in terms of implementation and simulations. Cardano is planning to develop a smart contract platform with an aim to deliver more advanced features than any protocol previously developed and will serve as a stable and secure platform for the development of enterprise-level DApps.
Cardano platform also wishes to use a decentralised governance system that allows the project to evolve over time, and fund itself in a sustainable way through a visionary treasury system.
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Cardano was founded by technologists Charles Hoskinson and his co-founder, Jerry Wood in 2015. It is overseen by a Switzerland based non-profit organization called Cardano Foundation and for-profit organizations called IOHK and Emurgo. Cardano is referred to as a “third-generation” protocol, improving on Bitcoin and Ethereum as first and second generation protocols respectively.
The first version of Cardano network went live in September 2017. Investors were able to convert their Cardano placeholder tokens to ADA tokens issued on the new Cardano mainnet. This iteration allowed users to buy and sell ADA tokens on a federated network running the Ouroboros consensus protocol.
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Like any sophisticated and well-thought of blockchain technology, even Cardano has a dedicated roadmap which is broken down into five phases.
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It is the largest cryptocurrency to use a proof-of-stake blockchain, which is seen as a greener alternative to proof-of-work protocols. One of the most distinctive features of Cardano Project is its “research first” approach to design.
It does not have a whitepaper unlike most of the blockchains, instead it uses design principles which are peer reviewed in Conferences by scientists around the world. Most of its codebase is written in Haskell Language which is a highly secure, purely functional language.
Like other blockchains, it also uses a consensus mechanism to choose the block creator. The consensus mechanism used is called OUROBOROS, and is based on proof of stake, in which the block creator is chosen from stakeholders using a provably random process. One of the key features of this protocol is very high transaction speed.
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Ouroboros processes transaction blocks by dividing chains into epochs, which are further divided into time slots. A slot leader is elected for each time slot and is responsible for adding a block to the chain. This protocol is guaranteed to be secure as long as 51% of the stakers are honest.
Cardano has two layers:
The native token of Cardano is ADA. The maximum supply of Cardano in the crypto market is 45 billion. The current token supply in circulation is 33.5 billion. Cardano promises an annual return rate of approximately 5% – 6%. The monetary expansion rate is currently set at 0.3% per epoch and has no bounding period.
The ADA token is primarily used for:
Cardano has a wide array of advantages. Some of them are:
Cardano faces a tough competition in the cryptocurrency industry. Its competitors being:
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Since its inception, Cardano has been nicknamed as the “Ethereum Killer” and is currently the 8th largest crypto in terms of Total market Cap as on 13 July, 2022. One of its biggest features is that it is built on peer reviewed research and hence can avoid the pitfalls of its predecessors and prevent glitches down the road.
However, the crypto market is extremely unpredictable and it is generally seen that coins that compete with the big two (Bitcoin and Ethereum) , generally end up plummeting in value.
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Disclaimer: User Generated Content – Original Content created by a member of BITS Pilani, under the consultation of Dr. Amit Dua, Assistant Professor, Computer Science Department, BITS Pilani, Pilani Campus in association with CoinDCX. The views and opinions expressed within this post belong solely to the author.
Author: Saatvik Mittal, Abhishek Das