What is Cardano (ADA) : Has the time of ADA cryptocurrency come?
Cardano is a decentralized, fully open-source blockchain network with ADA as its cryptocurrency. It has made to the top 10 charts recently, becoming the 6th largest cryptocurrency on market cap (followed by Bitcoin, Ethereum, Bitcoin Cash, Ripple, and Litecoin). Also known as “the Ethereum of Japan”, its value jumped from $0.02 to $0.52 only in a month.
Built by a team of scientific and crypto experts, Cardano has a ton of engineering marvels and innovations in store. The company is working on a smart contract platform with the aim to “deliver more advanced features than any protocol previously developed.” It is one of the first blockchains to be built in the highly secure Haskell programming language, and the first digital currency to be using Ouroboros, the pioneering platform that provides secure proof of stake.
Cardano is the first cryptocurrency that will strike a balance between both protecting the privacy rights of users as well as taking regulators’ need into account. It is programmed in a manner that it can upgrade into soft forks, allowing it to evolve according to changing conditions. It is a completely open-source and patent-free blockchain platform, with the spirit of collaboration and efficiency. It has an “airtight governance model” that prevents the blockchain from being controlled or power to be vested. It allows the community to democratically take clear decisions.
Currently, Daedalus is the only wallet that supports Cardano ADA cryptocurrency.
Cardano is one of the first cryptocurrencies to have evolved out of a more advanced scientific philosophy. This digital currency entered the market in 2015 and was established by Charles Hoskinson, a co-founder of Ethereum. His vision was to revolutionize digital currencies in their true sense.
Cardano is developed by collaborating with IOHK (which consists of Forbes, Bloomberg, Business Insider, etc). IOHK has a leading team of scientists, engineers, researchers and academicians who are experts in the understanding of digital currencies. With their collaboration, they worked on Cardano from the roots again. Their aim was to completely unravel the core of crypto and built a new cryptocurrency layer by layer again. Cardano is constructed as “the most precisely engineered cryptocurrency yet.” This is the reason why this “research-based approach” to Cardano has led to many innovations by the company. It is the first to be using Haskell programming language, Ouroboros for proof of stake, Daedalus, etc.
Proof of Stake
Opposed to proof of work, as commonly used by other cryptocurrencies, Cardano will rely on proof of stake.
Proof of work is basically related to mining on the blockchain, which is how cryptocurrencies work. To generate a proof of work, a computer has to solve a problem. Upon cracking the problem, the solution is verified and published along with the transaction. The owner of the computer collects transaction fees and rewards for mining.
However, the whole process of mining consumes too much energy. In fact, the amount of energy required increases as difficulty level in mining increases. Whereas, proof of stake is the new approach to the blockchain.
The core concept of proof of stake is to minimise wastage of electricity in mining. For this proof, a new algorithm called Ouroboros has been developed which is also utilized by Cardano. In this, “a node is selected to mint a new block, with a probability proportional to the number of coins the node has.” The working of Cardano’s proof of stake algorithm is further explained in the whitepaper published by the company.
Though proof of stake algorithm is not the first to be used by Cardano, it is the first to provide security for this algorithm. While other platforms did initiate it, they usually failed due to their inability to ensure security. Cardano provides security-guarantees that are mathematically proven. The efficiency of Ouroboros is the reason why it was accepted at the global conference ‘Crypto 2017’ after a strict peer review.
Cardano has a multi-layer advanced protocol that performs advanced functions. It has two layers, control layer and settlement layer that are well linked with each other. The settlement layer is responsible for having a unit of account of the ADA. While the control layer deals with other work on blockchain – running smart contracts, recognizing identity, assisting compliance, etc.
Privacy and regulation
Cardano is the first cryptocurrency that will strike a balance between both protecting the privacy rights of users as well as taking regulators’ need into account. To have privacy outside government’s regulations, Bitcoin was built. The vision was to provide complete anonymity for transactions in order to ensure financial privacy. But too much privacy has its own drawbacks. Therefore, the aim of Cardano is to “square the circle” and balance the need for both individual privacy protection and provision for regulatory control.
With its innumerable innovations, Cardano has already captured the attention of the blockchain community. A few days back, its prices soared by 117% and are very likely to reach a very high market cap. Seems like the time to invest in Cardano is around!