What is Cardano?
Cardano is the first decentralized blockchain protocol based on peer-reviewed research that uses a scientific approach and evidence-based methods. It was founded in 2015 by Charles Hoskinson, a co-founder of the Ethereum blockchain platform. Hoskinson was removed from Ethereum by Vitalik Buterin after a dispute about whether the project should be commercial (Hoskinson’s opinion) or a nonprofit (Buterin’s opinion) in 2014. So, he moved on to his next big project - Cardano. Hoskinson and Jeremy Wood are the core Cardano team.
The goal of the projects is to “redistribute power from unaccountable structures to the margins.” In other words, the team wants to bring positive change and progress to the individuals. Interestingly, Hoskinson didn’t pursue venture capital to protect the inherent principles of democratization in the blockchain.
Another way to protect the decentralized governance is SundaeSwap, which is about to become the first DEX (decentralized exchange) on the Cardano testnet. SundaeSwap leverages a transaction aggregation mechanism for exchanging Cardano-native tokens with one another. This hints that DeFi on the network may be around the corner.
ADA is priced fairly low (which some people view as a positive) but can also boast an impressive market cap of over $41 billion. Another impressive metric is the ROI - the approximate return if you bought ADA at the time of launch - 5,591.25%.
How Is the Cardano Network Secured?
The decentralized nature of the Cardano blockchain makes it secure, and the multi-level architecture provides scalability. But let’s elaborate and look at the important details.
The blockchain network is secured through a custom-built PoS (Proof-of-Stake) protocol called Ouroboros. Ouroboros defines the parameters based on a unique combination of mathematically-verified mechanisms, behavioral psychology, and economic philosophy. We will spare you the technical details and simply point out that it is provably secure and energy-efficient.
ADA stands for more price transparency. But despite the need for a transparent development process, they also want to protect developers’ freedom of expression. To balance it all about, the founders appointed the Cardano Foundation as an auditor of IOHK’s work. The auditor’s duties involve:
- Regularly reviewing the source code contained on Github
- Reviewing documentation
- Verifying claims produced by the scientists
- Submitting regular and timely reports
Cardano is one of the first projects to accept that development oversight from a trusted third party can be a powerful tool. IOHK will also develop a reference DAO model for entities interfacing with Cardano. This way, discussions on security and accountability will be moved to a decentralized entity.
What Makes Cardano Unique?
ADA stands out from other cryptocurrencies due to:
- Layered architecture - The blockchain has two main elements - the Cardano Settlement Layer (carries out all transactions) and the Cardano Computational Layer (deploys smart contracts).
- Cheap gas fees - ADA processes 250+ transactions per second, compared to Ethereum’s 15 and Bitcoin’s 5.
- Eco-friendliness - One of the main public concerns about crypto is PoW blockchains. But ADA’s PoS mechanism consumes 99% less electricity than either BTC or ETH.
- Strong values - Right from the beginning, the team strived to provide a more balanced and sustainable ecosystem for a positive global change. They are working with all sorts of entities towards this goal, such as the Lancaster University, where researchers are developing a “reference treasury model”.
There are also two hard forks that we should explore:
- Mary hard fork – The protocol upgrade introduced native token and multi-asset support on Cardano, along with large liquidity pools. Now, the ledger’s accounting infrastructure processes not only ADA transactions but also several asset types simultaneously. This ultimately removes extra complexity and the risk of manual errors.
- Alonzo hard fork – This one introduced smart contract support. The upgrade brought a versatile platform to create smart contracts and decentralized applications (DApps). Alonzo positioned itself as a strong competitor to Ethereum, which also opened up opportunities for businesses and developers.
All in all, these technical characteristics of the Cardano native token make it a unique coin with good potential.