Cardano(ADA)

Cardano is an open source blockchain platform powered by the ADA cryptocurrency token that is widely used to host decentralized systems and applications worldwide. The Cardano ecosystem was founded in 2015 by Charles Hoskinson, one of the founding members of Ethereum.

Unlike Bitcoin’s (BTC) origin story, Cardano lacks an authoritative white paper to predetermine its place in crypto finance. Instead, Hoskinson envisions building a system layer that solves problems present in other crypto ecosystems. With this goal in mind, Hoskinson founded three entities – the Cardano Foundation, Input Output (IOHK) and EMURGO – to develop a blockchain ecosystem based on a proof-of-stake consensus protocol.

History of Cardano

The Cardano ecosystem is built as a third-generation blockchain platform that consists of two layers: the Settlement Layer (CSL) and the Computational Layer (CCL), which are the fundamental building blocks of every transaction.

Settlement Layer (CSL)

Cardano’s developers wanted to build a system that separated the value of a transaction from its computational data. The Cardano settlement layer is designed to manage the movement of value (or currency) between senders and receivers. In other words, the settlement layer is the routing layer for all control layers and systems. CSL uses two specialized scripting languages - Plutus and Marlowe - to move value and enhance coverage of network protocols. 

Computational Layer (CCL)

The computing layer helps Cardano replicate the Bitcoin (BTC) ecosystem’s smart contract platform Rootstock (RSK Blockchain). The reasoning behind the implementation of CCL is its ability to help expand professional protocols over the years. As technology advances, this involves adding hardware security modules (HSMs) to existing protocol stacks. The Cardano blockchain’s two layers allow the ecosystem to proactively implement changes to support faster, more secure transactions while eliminating any user metadata that proves irrelevant to the process.

How Does Cardano Work?

Considered a "third generation" blockchain, Cardano was essentially designed to solve the scaling issues typically associated with the first (Bitcoin) and second (Ethereum) generations, and it has proven to be a constant The source of innovation.

While previous generation blockchains were prone to high transaction fees and low TPS (transactions per second) due to certain limitations in their design, Cardano is being built from the ground up to provide truly decentralized, low-fee, high-TPS security. Proof of Stake (PoS) network solution.

Cardano aims to increase the speed and overall capabilities of its network in a number of ways. First up is its own proof-of-stake (PoS) consensus protocol called Ouroboros. Not only was it designed with efficiency in mind, Ouroboros also significantly reduces the energy costs of the network without sacrificing security—especially when compared to proof-of-work (PoW) mechanisms.

The Cardano project’s upcoming layer 2 solution is called Hydra. Hydra is designed for theoretically unlimited scalability, allowing throughput to increase with each new node joining the network.

Cardano also boasts another unique feature – a hard fork combiner. Essentially, this innovation allows the network to undergo a hard fork without actually disrupting the blockchain.

Uses of Adacoin

Cardano’s native token, Cardano, can be used as a transfer of value, similar to how cash is currently used. While many cryptocurrencies share this feature, Cardano has other uses as well.

A core feature of the Cardano project is its Proof-of-Stake (PoS) consensus protocol, in which Cardano coins are staked on the Cardano blockchain to validate transactions. Those who stake ADA into the blockchain are rewarded for their participation – in the form of more ADA. This staking protocol ensures active participation and uptime, while also helping to maintain the security of the entire blockchain.

Another use for ADA on the Cardano network is voting and governance. Unlike other blockchain projects, Cardano does not have miners deciding its future direction, and that responsibility falls on Cardano stakeholders. When new changes or enhancements to network functionality are proposed, Cardano holders use their tokens to vote on these proposals. This will ultimately make Cardano a fully decentralized project governed by those who invest in it.

With the launch of Phase 3 – Goguen, Cardano will also be used to power various smart contracts that will be enabled on the Cardano blockchain. Developers will leverage ADA to create and support these smart contracts and decentralized applications (dApps).

How to Mine Cardano?

Most cryptocurrencies are mined using proof-of-work, which means people have to solve increasingly complex calculations to obtain them. This consumes a lot of very expensive electricity, increases carbon emissions, and has a great impact on the environment. Proof-of-stake, on the other hand, allows investors to mine based on the number of tokens or coins they already hold. This makes it easier, cheaper and more environmentally friendly.

The algorithm used for ADA mining is called Ouroboros, named after the mythical "snake that eats its own tail." It works by dividing time into two measurements, epochs and slots. Epochs are the most significant periods, which can last up to five days, and slots consist of 20-second blocks within these epochs. There is someone responsible for each slot, chosen randomly, and they put blocks into the Cardano blockchain. At the end of each epoch, the slot leader of the previous epoch votes to decide who should become the slot leader of the next epoch. 

Future of Cardano

The Cardano Foundation is backed by a strong developer community led by Hoskinson and backed by investors around the world. The community is focused on building real-world financial tools that can help ADA achieve price growth based on use case-driven adoption. Cardano sidechains provide developers with the option to build applications based on other frameworks and consensus that are not native to the Cardano ecosystem. Currently, ADA manages to overshadow most cryptocurrencies in terms of price performance and market capitalization.