Summary
Cardano is a proof-of-stake blockchain project whose potential has yet to be fully realized. It is a "third generation" blockchain that strives to solve the scalability issues inherent in second generation blockchains, similar to the highly anticipated Ethereum 2.0.
Cardano’s development combines a scientific philosophy with a lot of academic research. With the release of Shelley in 2020, Cardano is one step closer to its goal.
Introduction
Since its inception in 2015, the Cardano project and its associated cryptocurrency ADA have attracted widespread attention from the community. Cardano was developed with a serious and rigorous academic attitude, which makes it somewhat unique in the field of cryptocurrency.
The Cardano project is mainly developed by Input Output Hong Kong (IOHK), a technology company founded by Charles Hoskinson. Hoskinson also participated in the early development of Ethereum.
What exactly is Cardano? What features are planned in its long roadmap? Let’s find out.
What is Cardano (ADA)?
Cardano is a universal blockchain based on a peer review mechanism in the academic research field. Its multidisciplinary development team is composed of engineers, mathematicians, scientists and business elites.
The projects being developed on the platform all adopt a scientific approach. The founder said that the core design principles of Cardano are security, scalability and interoperability.
ADA is the native currency of Cardano and is used to perform operations in the Cardano blockchain. The relationship between the two is similar to that between Ether (ETH) and Ethereum.
The development tasks of Cardano are completed by the collaboration of multiple business departments: IOHK develops the Cardano protocol, the Cardano Foundation oversees the project, and EMURGO is responsible for business development and increasing application rate. IOHK also participated in the development of Ethereum Classic (ETC).
What is the Cardano (ADA) roadmap?
The Cardano roadmap consists of five phases: Byron, Shelley, Goguen, Basho, and Voltaire. The first phase is Byron, the main task of which is to release the network and launch basic functions such as ADA transfers. In 2020, the Shelley hard fork was implemented to deepen the level of decentralization. Currently, the nodes are operated by the Cardano community and the staking pool is managed by ADA holders.
As of December 2020, functional smart contracts cannot yet be deployed on the blockchain platform. As part of the roadmap, the Gugan upgrade will complete the above functions. After Gugen is the Basho stage, which focuses on scalability and interoperability optimization. The final Voltaire phase will introduce a treasury system to solve governance issues.
How does Cardano (ADA) work?
As a "third generation" blockchain, Cardano aims to solve the scalability issues of the first generation (such as Bitcoin) and the second generation (such as Ethereum).
Supporters of the generational theory believe that previous generations of blockchains have encountered bottlenecks and are fundamentally limited in the throughput they can handle. This makes them incapable of efficient global application. The fluctuations in Bitcoin and Ethereum transaction times reflect this problem.
Cardano cited VISA’s computing power as a comparison in its official documentation:
The network reported an average of 1,736 transactions per second (TPS), with a maximum throughput of 24,000 TPS.
Cardano hopes to increase throughput in a variety of ways. One of the core methods is its Proof of Stake (PoS) consensus mechanism, called Ouroboros. The security guarantee of this mechanism is obvious to all, and the energy consumption is lower than that of Proof of Work (PoW).
To further improve scalability, Cardano launched a Layer 2 solution called Hydra, taken from the mythical creature of the same name. In the Hydra solution, as new nodes continue to be added, network throughput will continue to increase.
Another key feature of Cardano is the hard fork coordinator. With its support, there is no need to interrupt or restart the blockchain during a hard fork. The success of the Shelley upgrade demonstrates the effectiveness of this approach.
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Key Features of Cardano(ADA)
As mentioned earlier, Cardano’s advantage lies in the academic and scientific concepts behind it. Currently, Cardano’s development team has published more than 90 white papers covering the underlying technology. The project has a clearly defined roadmap, and the network wants to be inherently secure, scalable and interoperable.
Although not yet operational, the Cardano blockchain will support scalable smart contract functionality in the future. Cardano sees VISA as a competitor, with hardware limitations as a theoretical target. It has access to all the necessary building blocks to become a strong fintech disruptor.
Similar to Ethereum, Cardano has many potential use cases, but it only hopes to become a base layer for building applications.
Like other projects in the cryptocurrency space besides Bitcoin, Cardano has made big promises but has yet to fully deliver. Cardano has ambitious infrastructure plans but has been relatively slow to develop.
What is the ADA coin?
ADA is the token of Cardano, named after the 19th century mathematician Ada Lovelace. 57.6% of the ADA supply was issued through the Initial Coin Offering (ICO). During this period, Cardano raised a total of $62.2 million.
This token is not only a digital currency, but also a medium of transaction in the Cardano network (similar to Ether in Ethereum transactions).
ADA holders own a share of the Cardano network and can use ADA in the equity staking pool and receive staking rewards. Binance Money also supports Cardano staking.
How to store Cardano (ADA)
Daedalus, an open source desktop software wallet developed by IOHK, can be used to store ADA. It is a full node wallet, users must download the complete Cardano blockchain, and every transaction should be verified to maximize user security.
Yoroi and AdaLite are light wallets for ADA that can be used without downloading the full blockchain. ADA can also be stored in cold storage hardware wallets such as Ledger and Trezor through Daedalus, Yoroi and AdaLite.
Summarize
The Cardano project is ambitious and aims to create blockchain infrastructure for the cryptocurrency ecosystem. Although the project is progressing slower than expected, its ambitions are high.
Will this third-generation blockchain project eventually grow into a dominant platform for smart contracts? Or will it be surpassed by other projects? Will a fourth-generation blockchain that is better than it emerge? As the Cardano roadmap continues to advance, the answers to these questions will be revealed one by one.
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