What is Cardano?
Cardano (ADA) is a decentralized, blockchain-based platform like Ethereum. It features smart contracts and decentralized app functionality. Furthermore, Cardano claims to be the third generation of cryptocurrencies and itis built around peer-reviewed papers. A group of experienced scientists and developers inspects and develops the blockchain.
Cardano launched in September 2017 after two years of development. It is a blockchain-based platform with ADA being the native currency of the blockchain. Three institutions are currently developing Cardano: IOHK (Input Output Hong Kong), the swiss Cardano foundation and Emurgo, a Japanese cryptocurrency investment and consulting firm.
IOHK, founded by former Ethereum co-founder Charles Hoskinson, is responsible for the development and maintenance of the Cardano protocol. The swiss Cardano foundation grows the community of users and developers and also works with regulators. Emurgo invests in ventures for possible cooperations with Cardano. They also search for talented dAPP and smart contract developers.
How does Cardano work?
Cardano wants to improve three major problems with current blockchains: scalability, interoperability and sustainability.
Scalability is a big problem with cryptocurrencies like Bitcoin or Ethereum. Because those cryptocurrencies use proof of work they can only handle a small number of transactions per second (7-13). This leads to slow transactions and expensive transaction costs for consumers. Cardano uses Ouroboros, a proof of stake mechanism. The blockchain divides the time into epochs. One epoch is split in slots. So a slot is a short period of time in which exactly one block can be created. The network then elects a slot leader out of the stakeholders for each slot. Most importantly, the slot leader is the only person that can verify the transaction and put it in a block. If a slot leader doesn’t verify the transaction in time, he loses the right to verify transactions. Cardano can run multiple epochs in parallel, which makes it highly scalable.
Cardano also aims to be the “internet of blockchains”. There are many different cryptocurrencies and many experts believe that many of them will exist side by side. Cardano aims to be an intermediate between blockchains. This makes moving assets much easier. Another problem with cryptocurrencies is that banks don’t believe in them. Cardano wants to improve this problem by adding metadata to transactions. Banks like to know who made the transaction and for what reason. That’s why Cardano wants to allow users to add that information to their transactions.
To stay sustainable, the Cardano developer team opened a treasury. This treasury is a wallet, which receives a small percentage of every transaction on the Cardano blockchain. Nobody has access to the treasury. However, a small amount of the fund goes to developers who improve the Cardano protocol via a smart contract.
What does Cardano want to achieve?
Cardano is a currency of the future. The development team is ambitious and has high goals. The team predicts the project to be finished no later than 2020. However, Cardano aims to reach both single consumers and big enterprises like banks. Cardano is built around scientific research. This helps the project to avoid mistakes or problems of other cryptocurrencies.