Cardano Blockchain and ADA Cryptocurrency Explained
In 2015, two influential minds, Charles Hoskinson and Jeremy Wood established Input-Output Hong Kong (IOHK) company, which aimed to create a new round in blockchain technology. Cardano platform works toward becoming a blockchain that can perform better than any others. It focuses on the scalability to make transactions with its native cryptocurrency, ADA, cheaper, and faster.
Cardano is a blockchain-based ecosystem for smart contracts. It’s obviously a competitor to Ethereum. However, Cardano developers claim it to have emerged with academic research and scientific approach. Now, let’s dive into the world of Cardano blockchain and ADA cryptocurrency and find out all the details.
Cardano Development History & Roadmap
Cardano was established in 2014. Charles Hoskinson, the famous programmer, one of the first developers of Ethereum, became the inspirer of the currency. Back then, the project was a mixture of revolutionary ideas and concepts, the fruit of joint research and collaboration. Its creators set themselves a goal of overcoming the limitations of the existing blockchains.
Hoskinson managed to assemble a whole team of professionals from around the world. The work on the project was immediately divided into three parts: technical, commercial, and ideological. Three organizations are managing Cardano:
Cardano Foundation is capable of protection and Cardano protocol compliance, public relations (partnerships), government agencies, and financial regulators.
IOHK is engaged in ecosystem development and service.
Emurgo is a commercial organization that is funding and supporting the applications.
There are three steps of Cardano development and platform launch.
Testnet (September 2015 – January 2017). During this period, the users participated in the beta-testing of the network. This era includes the ADA ICO conducting, during which the ⅔ of all ADA coins were sold.
When Cardano was launched, the token’s value was about 10 cents, and the market capitalization level was barely more than $19 million. Just four days after launch, capitalization reached $500 million, and the price of the coin increased by two times.
Bootstrap. This era started when all nodes were under IOHK and partners’ control. There was no support for smart contract operations. The network is centralized, and all transactions go to the testnet. In December 2019, 500 staking pools were launched.
Reward. At this time, the network should be fully functional. Holders of ADA cryptocurrency will be able to receive staking rewards, and holders will be able to manage staking pools. The source of the reward comes from transaction fees.
Moreover, there are five eras of Cardano development. Let’s focus on them.
Byron Era is named after the poet Byron, father of Ada Lovelace. This is the initial phase (started in September 2017), where the key components were developed.
Shelley Era is named after Mary Shelley, the author of “Frankenstein or, The Modern Prometheus.” At this stage, the platform will be fully transferred to a decentralized mode. The system will have staking pools to allow any user to delegate ADA coins to them and receive dividends.
Goguen Era is named after Joseph Goguen, the Oxford professor working on algebraic semantics and formal verification. At this stage, native tokens will be implemented. They will be more secure and less resource-intensive than Ethereum’s ERC-20 tokens. Their use will not require smart contract creation and execution.
Basho Era is named after the poet Matsuo Bashō. This era will be marked by optimizations and increased scalability of the network. At the same time, the developers plan to introduce sidechains to increase the efficiency of the network.
Voltaire Era is named after a famous French writer. During the last phase, decentralized on-chain governance and treasury systems will be established.
On July 30th, 2020, developers activated the Shelly update. After the hard fork, users got the opportunity to manage the pool and delegate coins.
Cardano Blockchain Explained
Cardano is an innovative platform created to implement a cryptocurrency economy and the democratization of money circulation in emerging markets. It will enable you to work with decentralized applications based on smart contracts in an affordable, reliable, and scalable way.
Cardano developers have divided the blockchain into two separate technical layers. The first is a settlement layer, which allows us to send and receive ADA coins. This makes ADA more adaptable because the system adjusts to any user. Cardano can change how data can be stored and accessed depending on any government’s law.
The second layer is a computation layer. It creates and enters smart contracts. As a result, transactions are faster, and the system’s security level has increased several times.
Unlike most other cryptocurrencies, the Cardano code is written using Haskell, a modular functional language. Today it is the most secure programming language, the use of which minimizes the likelihood of cyber attacks and errors in the system.
In the conditions of heightened interest of the state in cryptocurrencies, Cardano developers chose the most successful promotion strategy. They establish contacts with government agencies, providing their coin the status of an official means of payment.
The platform consists of two levels: a register of account balances and a separate level at which funds are transferred from one account to another. This division allows you to create flexible smart contracts on the platform: unique, private, and ideally corresponding to a specific use case.
For transaction validation, Cardano uses the Proof of Stake algorithm and validators. This decision makes the process of getting ADA cryptocurrency more convenient and eco-friendly. Moreover, developers have built the Ouroboros protocol on top of typical PoS systems. Cardano Ouroboros algorithm was created to eliminate difficulties with low network speed and high commission due to increased transaction volumes.
Ouroboros divides time into epochs. Each epoch consists of N slots (each slot is equal to one second). In any slot, block-producing nodes might be nominated to be a slot leader. How does the node choose the leader? This process is based on stake and lottery. The number, generated during the calculations of stakeholder in a previous epoch, determines the leader of every slot.
Slot chances to win are proportional to the sum of its stake, the percentage of the coins, which it controls directly or through the delegates.
Cardano vs. Bitcoin: Scalability Problem
One of Cardano developers’ main goals is to make Cardano blockchain more scalable than Bitcoin or Ethereum so that it can become a simple payment system. Scalability means how many transactions can proceed with a blockchain in a specific time frame.
Bitcoin and Ethereum can process fewer transactions in a time slot. While verifying the transaction, the Bitcoin blockchain gets bigger and bigger by keeping a copy of every transaction in the ledger. This process causes the scalability problem.
Let’s look at the example of Cardano transaction and its implementation in the blockchain. When Alice sends to Bob 10 ADA, they are the only people who are involved in this process. The validators of the network help to confirm the movement of funds. So the blockchain keeps the small piece of data, not an entire blockchain. This makes Cardano one step higher than older blockchains.
What Is ADA and Where to Store It?
The blockchain Cardano was named after Gerolamo Cardano, a famous Italian mathematician, physicist, biologist, chemist, writer (and more) of the 16th century.
ADA is a native cryptocurrency of the Cardano ecosystem. It is named after Ada Lovelace, who was a mathematician and a daughter of Lord Byron. She became the first computer programmer in the 19th century.
To keep the coins safe and sound, the developers have created their crypto wallet with high security and extensive functionality, named Daedalus. With it, you can encrypt keys, make payments, and even earn new coins. However, the wallet has some disadvantages, according to the users and the overall community.
The functionality of the Cardano crypto wallet is not limited to the storage of coins. The developers have registered several additional functions: encryption of private keys, obtaining paper certificates, tracking transactions, and even launching decentralized Cardano-based applications.
Besides, the developers promise to add the ability to store BTC and ETH. That means Daedalus Wallet promises to be a real multi-currency crypto wallet.
Moreover, the developers plan to add the function of the so-called equity financing. Holders of the ADA will be able to participate in the generation of blocks directly from the account of their crypto wallet. And, accordingly, receive a reward on it.
Initially, the Cardano development team declared its intention to create a project aimed at caring for the interests and convenience of the end user and taking into account the position of regulators. The developers sought to find a middle ground between the need for regulation, privacy, and decentralization principles, which are crucial to blockchain technology, on the other.
Where to Trade ADA Cryptocurrency?
There are a wide range of cryptocurrency trading platforms where ADA can be traded. We’ve compiled a list of the most famous exchanges and supported pairs.
According to the chart, the token price is not too high, so it can be good to get some ADA coins. By the way, let’s consider Cardano’s promising roadmap – if developers continue to improve the platform step-by-step, the coin rate will go up.
There are several ways to buy Cardano for fiat money, including cash, banking card, or any other payment of your choice. They differ in velocity, the simplicity of purchase procedure, and the level of anonymity.
The Changelly platform offers you a way to buy Cardano with your banking card, safely and swiftly, and with minimal authentication. The fiat payment process is powered by our partner Indacoin and takes just a few simple steps to take.
Cardano is unique in many ways. A set of scientific articles replaces a standard white paper addressed to potential investors. The development team includes numerous experts, researchers, and engineers from around the world. Cardano is widely accepted in Japan and other Asian countries that declared cryptocurrency the official means of payment.
Cardano was not conceived as a regular cryptocurrency for quick fundraising, but a long-running cryptocurrency project adapted for new economic conditions. According to experts, it combined the blockchain manufacturability, security of Ethereum smart contracts, and ordinary money’s legality.
Developers are not caught in connections with the darknet and money laundering, due to which their reputation today is much higher than that of the developers of many other popular cryptocurrencies.