Introduction to Cardano: A Beginners Guide 0/5
Introduction to Cardano – A Beginners Guide
What is Cardano?
Cardano (ADA) is a decentralized and open-source digital currency that enables a secure, peer-to-peer transfer of funds to anywhere in the world.
Other than a cryptocurrency, Cardano is a smart contract platform that enables the development and deployment of decentralized applications and smart contracts. It is the first blockchain project to evolve out of a scientific philosophy and a research-first driven approach, promising to deliver more advanced features than pre-existing networks.
Cardano aims to build a balanced and sustainable ecosystem for cryptocurrencies by balancing the needs of users with those of regulations and in so doing will bring greater financial inclusion for the entire crypto industry.
The Cardano Team
Cardano is developed by a team of global researchers and engineers through a process of first principles, formal verification and peer reviews.
Founded by Charles Hoskinson, co-founder of ethereum, the Cardano foundation has partnered with a bunch of academic and scientific institutions to research and review all aspects of its blockchain. The core team behind the cardano projects is made up of three organizations;
- The Cardano Foundation
- Input Output Hong Kong (IOHK)
The Cardano foundation is a non-profit organization based in Switzerland which aims to “standardize, protect and protect the Cardano protocol technology”.
IOHK is a cryptocurrency expertise company founded in 2015 by Hockinson and Jeremy wood with a commitment to develop and integrate blockchain technologies into financial services. IOHK is contracted to engineer the cardano network through 2020.
Based in Japan, Emurgo provides supports and a list of services ranging from financial to legal for startups looking to utilize the Cardano blockchain. This three organization work as a team to provides the resources for the growth and maintenance of the Cardano platform.
How does Cardano Work?
The Cardano protocol is built in Haskell code which requires a high degree of fault tolerance. The Haskell programming language enables the formal verification of code which provides a higher level of security for the protocol.
The network is composed of two primary layers; the cardano settlement layer (CSL), which operates accounts and cryptocurrency transaction and the Control layer (CCL) to run smart contracts and dApps.
The separation of accounting and computation into different layers will allow the ease of system upgrade enabling it to adapt to changing needs and evolve quickly.
Cardano Block Explorer
The Cardano block explorer allow users to view detailed information on the cardano testnet ranging from transaction feeds to block production.
The Cardano Testnet is a pilot version of the network which is currently been tested to ensure smooth operation ahead of the launch of the main network.
Ouroboros Proof-of-Stake Algorithm
Cardano adopts a modified Proof-of-Stake (POS) algorithm known as Ouroboros, which determines how individual nodes reach consensus about the network. The protocol determines block producers by random selection, with each user having an opportunity in proportion to the size of their stakes.
In this protocol, the network appoints leaders responsible for verifying and validating transactions from a collection of nodes. They are called slot leaders. Each slot leader is responsible for a designated slot in which they can produce no more than a single block.
In the network, nodes are streamlined into random numbers known as Epochs. Epochs are then subdivided into Slots which are short time periods of around 20 seconds.
Slot leaders perform the same function as miners in bitcoin blockchain, but without the extreme computational demands required in a proof-of-work system. Slot leaders are rewarded with transactional fees from a given epoch.
Features of the Cardano Blockchain
Interoperability: The cardano network is designed to enable interoperability of the blockchain, thus, will allow interactions with multiple public blockchains for different purposes.
Side Chains: Sidechains will enhance the ability to transfer Ada within its multiple layers, enable scalability, and allowing system upgrades without requiring a fork.
Self Sufficient: The network will adopt a treasury model which will ensure the sustainability and self sufficiency of the blockchain and community.
Usability: Users will have access to lots of exciting features for the development of smart contracts, including a private test network to try out code before it is deployed to the mainnet.
MultiSig Transaction: The cardano blockchain is built to support multiple signature schemes to enhance interoperability and secure transfer of funds.
Scalability: Its ownership mechanism will ensure scability of the network in which its capabilities increases with growing adoption.
Cardano (ADA) Cryptocurrency
ADA is the native cryptocurrency of the cardano network. It is part of the Cardano settlement layer and fuels the entire network. The cryptocurrency was officially launched in September 2017 after a lengthy ICO which spanned from September 2015 through January 2017.
Under a short period in the market, ADA has increased in value with a market capitalization of over $7 billion. There are about 31 billion ADA coins currently in supply with just a total of 45 billion ADA coins to ever be created.
ADA can be used to send and receive value in a peer-to-peer system. It can also be staked to perform certain tasks and operations in the Cardano network.
Daedalus ADA Wallet
Daedalus is a digital wallet specially built by the cardano team for the ADA cryptocurrency. To be able to use the ADA cryptocurrency you must download Daedalus as it is currently the only wallet provides ADA storage and accessibility.
Apart from the storage of ADA, Daedalus provides users with many useful features including viewing transactions history and making transfers. The team is currently improving the wallet to provide support for other cryptocurrencies including bitcoin (BTC) and ethereum classic (ETC).
Where and How to buy ADA
ADA is currently listed on a number of cryptocurrency exchanges which allow users to buy or sell ADA for other cryptocurrencies or fiat currencies.
To start trading ADA, you simply need to register with any exchange that provides support for the ADA cryptocurrency, some of which are listed below;
The future of Cardano
Cardano calls itself the third generation blockchain platform that provides solution to scaling and operational issues of previous blockchain generations, Bitcoin and Ethereum.
It is the first blockchain platform to evolve out of a scientific philosophy and has been carefully constructed from the ground up in a provably secure manner. Cardano pioneers new standard for cryptocurrencies by combining privacy and regulations to achieve a greater financial inclusion for the crypto industry.
Still in its development stage, cardano presents a list of groundbreaking innovations which will enable the scaling of thousands of applications on the blockchain, providing security and sustainability for these projects.
Currently, its native currency, ADA, is trading at major exchanges and its user base keeps growing daily. With a market capitalization of over $7 billion, ADA is the top 7th most traded cryptocurrency as at press time. The network has the potential to increase further in value, however, it has only been trading for a short time and it is difficult to predict its price movement giving the highly volatile nature of cryptocurrencies.
And though the Cardano blockchain has a lot of innovative and interesting features to offer, it will be competing with pre-existing blockchains like Ethereum which has gained a mass adoption and is constantly improving. Cardano will also have new competitors to the table as the likes of EOS, NEO and NEM promises similar projects with much greater and advanced features.
Overall, Cardano is an innovative project that is aimed at providing a stable cryptocurrency ecosystem in order to achieve greater financial inclusion.
However, the project is still in its early stage and much depends on the team’s zealousness and the growth of the entire community for the execution of the project.