With every passing day, Cardano coin is gaining greater popularity. Not every virtual currency is able to grow as much as Cardano cryptocurrency, which has earned a spot in the list of top ten currencies by market capitalization. Cardano is certainly one of the most promising cryptocurrency projects currently out there. It aims to change the face of the cryptocurrency world by allowing fast, direct, and extremely secure transfers of ADA that are based on high-end cryptography. However, Cardano not just another regular cryptocurrency. It hosts a technological platform which when fully developed, aims to run financial applications that which big enterprises, governments, and individuals use on a regular basis.
This article is written with the sole purpose of providing a detailed introduction of Cardano crypto and the way it works.
What is Cardano?
From time to time, Cardano cryptocurrency (ADA) has been referred as the first ever blockchain platform that relies upon a scientific philosophy. It is a cryptocurrency project which aims to sell new-age features never seen before in other cryptocurrencies.
One of the most distinctive features of Cardano’s technological platform is that it is being developed in the form of layers, which adds a lot of flexibility for maintenance and upgrades. A distinct computing layer follows the settlement layer that runs the ADA. The computing layer is built with the primary purpose of handling smart contracts and legal agreements. This does not end here though. Cardano is also capable of running decentralized applications (applications that operate on a blockchain spread across a network of computers).
One of the unique features of Cardano is that it is the first blockchain project ever to be found with a scientific philosophy. This is because its development team consists of leading computer scientists and engineers.
It would not be wrong to say that Cardano could have a bright future in the blockchain industry, for the amount of thought and scientific effort that is put into this project.
Cardano is being developed by three organizations:
1. The Cardano Foundation:
It is an independent organization with headquarters located in Switzerland. Its prime focus is on providing support to the Cardano user community and to interact with authorities for commercial purposes.
It is a major organization that revolves around cryptocurrency research and development, holding the contract for the development of the platform until 2020. Professor Aggelos Kiayias who is the IOHK chief scientist is the one responsible for the Ouroboros system’s design. It was accepted in the Crypto 2017 conference and became the first protocol to have undergone peer review. Crypto conference is a major cryptography conference where brilliant minds come together from all over the globe.
It is the third business partner, which provides assistance to commercial businesses with regard to growing on Cardano Blockchain.
The algorithm on which the Cardano coin is based on is known as Ouroboros. This algorithm basically determines the way each individual node reaches a consensus. There are plenty of blockchain scaling difficulties that are normally faced by users, and this algorithm might be a step forward towards removing them. For instance, the Ouroboros algorithm has discarded the requirement of the proof of work protocol which eats up massive amounts of energy. Furthermore, it also stands out as being more secure, which is mathematically proven.
ADA makes use of a unique programming language called Haskell, which has been built from scratch. This programming language carries a lot of differences as compared to those that were used for DASH and IOTA for instance. Haskell, the programming language, carries a lot of fault tolerance. This is because it was created with the prime aim of allowing greater flexibility, and to keep a margin of error.
For storing the ADA coin, one needs to have a special wallet. This wallet is named as Daedalus and it is said to be capable of running decentralized blockchain applications. In order to protect the currency’s users from malware, the private keys are secured by encryption.
Before making a Cardano investment, you might want to consider the major differences between the Cardano coin and Bitcoin, along with the specifics of how it works. Continue reading for more information!
Major Differences Between Cardano and Bitcoin.
There are plenty of similarities between the Cardano coin and the Bitcoin, given that both fall under the domain of cryptocurrencies. However, still, there are a couple of differences between them both.
- Firstly, Cardano stands out as being far more secure as compared to Bitcoin
- Cardano brings proof of stake (PoS) into play while Bitcoin is a proof of work type cryptocurrency.
- Unlike Bitcoin, Cardano is based on a research-driven methodology.
- Cardano ADA also has a technological platform, unlike Bitcoin that can run a wide range of financial applications for commercial businesses and governments.
The Unique Features of Cardano
A research-driven approach:
If you would compare Cardano with other blockchain technologies out there, it would be apparent that Cardano has been born solely out of a research-driven approach. Its advent and growth are deeply rooted in the scientific philosophy which could shape the face of blockchain technologies in years to come. There are a series of academic papers published, that which investors can take a look at.
Highly adaptable and flexible:
The team that is working behind the scenes, realizes that a blockchain technology must be adaptable to the needs of the investors, scalable, and highly secure especially if a big number of individuals are to make a Cardano investment. This is the prime reason why it has been developed as an open source project. It is apparent that a lot of scientific care has been put into its development since the very beginning.
A technological platform:
Apart from the cryptocurrency, ADA hosts a technological platform of its own. Upon full completion, this technological platform will be fully capable of running complex financial applications that could bring benefit to commercial businesses, individual users, and governments at large. The technological platform is being developed in a layer format, in order to increase the flexibility of upgrades and maintenance. The first layer is the settlement layer, on which ADA runs. Following which the team will be building the computer layer which will be responsible for handling all the smart contracts (digital legal agreements). Furthermore, the technological systems will be capable of running decentralized applications that are operated through blockchains instead of an individual entity controlling it.
The Cardano crypto is based on the Ouroboros algorithm which has eliminated the need for the proof of work and mining protocol. This is because a massive amount of energy gets consumed in that process. This adds in a great level of security, which has mathematically been proven.
Is Cardano Minable?
Cardano mining is not based on the traditional mining process like Bitcoin mining. It follows a rather different approach as compared to the traditional cryptocurrencies such as the Bitcoin. The Ouroboros algorithm on which the Cardano (ADA) crypto is based upon, keeps a check on the way every node comes to a consensus in the blockchain network. In simpler words, the Ouroboros algorithm is dependent on the coin holder’s vote. This is the one feature that makes it highly energy efficient and easy to work with. In comparison to the Cardano coin, most of the other cryptocurrencies including Bitcoin makes use of the proof of work algorithm. This new proof of stake approach could set new standards in the blockchain industry that which many other crypto technologies may follow soon.
Both the proof of work and proof of stake algorithms fall under the general category called consensus algorithms. Simply put, Consensus algorithms work to form new transaction blocks, which updates the ledger’s state. Upon publishing transaction blocks, the person’s node running the currency’s protocol attaches a proof of merit.
Both of these proofs i.e the proof of work and the proof of stake are discussed below:
Proof of Work and Mining.
The proof of work and mining is the most popular consensus algorithm that which most cryptocurrencies including the bitcoin use. This was first developed by the Bitcoin. In order to form a proof of work, the CPU accepts a challenge. This challenge happens to be a problem that involves a great number of computations, hence requiring massive amounts of energy. Nevertheless, the solution to these challenges can easily be verified. When the CPU on the network finds the solution, the solution is published along with information of all the transactions that were observed. The CPU’s owner ultimately receives the price for those transactions, for forming a block. In simpler terms, this entire process is called mining and it consumes a big deal of energy. Not only that, but the required amount of energy for mining is constantly on the rise resulting in a great level of competition.
Proof of Stake and Mining.
The proof of stake is a relatively new approach when it comes to cryptocurrencies. The team of IOHK scientists that was led by Professor Aggelos has been the first one to design a secure proof of stake algorithm known as Ouroboros which has been proven mathematically.
The proof of stake approach may be considered as the first of its kind, not only because it is energy efficient but also because it has been proven as more secure.
The underlying idea behind this method is to avoid the wastage of electricity in order to crack computationally heavy challenges. Instead, a node mints a block carrying a probability that depends on the number of coins the node has. Upon a positive stake (greater than 0), the node is labeled as a stakeholder. This is the only way to mine Cardano.
The Growth of Cardano
Currently, Cardano stands as the fifth cryptocurrency based on the capitalization of the market, having an estimated net worth of $18 billion. The price is currently quite stable, standing at around $0.7.
Ever since its development began, the ADA coin (Cardano) has gained a significant level of support and encouragement from investors all over the globe. Within three to four days of the release, there was an increase in its price from $0.02 to $0.14 dollars which is a quick rise. The prime reason behind this fact is that the Cardano Crypto had been quite transparent with respect to its development. Hence, investors and the developers could easily predict the bright future of this cryptocurrency.
According to the current expectations and market predictions, the Cardano coin could reach up to 45$ billion coins in the near future, while currently there are around $26 billion coins circulating around.
The Cardano Coin is quite an interesting cryptocurrency that has been developed with great care, by a team of highly qualified scientists. Having been developed based on the scientific philosophy, the Cardano coin certainly offers a lot of unique features, hence setting up new trends.
It may certainly not be the perfect cryptocurrency ever, but it does work in a different way which might be appealing to many. Considering the current growth rate, one might conclude that Cardano (ADA) crypto might become the leading cryptocurrency in the near future.
We hope to have provided you all the information regarding Cardano that brought you here in the first.
Please make sure you check out our website and learn more about the world of cryptocurrencies.