Cardano was founded in September 2017 and is a decentralised public blockchain with the ADA cryptocurrency at its core. The project involves the development of smart contract platforms and aims to compete with Ethereum with which it has several similarities (smart contracts, decentralised applications, etc. …).
Cardano’s goal is to improve the critical aspects of Ethereum, such as scalability.
Ethereum is a key part of Cardano’s project because the CEO of the company that created it, namely Input Output HK, is none other than Charles Hoskinson, a co-founder of Ethereum. The project is supported and developed by three companies: The Cardano Foundation, InputOutput Hong Kong (IOHK) and Emurgo.
Cardano is based on Proof of Stake (PoS), which is a consensus algorithm that doesn’t require miners, unlike Bitcoin, for example, which uses Proof of Work (PoW).
The cryptocurrency at the core of the project, ADA can be described as eco-sustainable because it does not require huge amounts of electricity to be used, an issue that undermines the sustainability of PoW-based cryptocurrencies. It currently fluctuates between the 10th and 15th position on CoinMarketCap with a capitalisation of about 2 billion dollars.
These are the team’s words on the choice of PoS:
“The most important thing about picking a Proof of Stake (PoS) algorithm over a Proof of Work (PoW) algorithm (as adopted by Bitcoin), is the energy consumption considerations. Running the bitcoin protocol is a very expensive endeavor which uses large amounts of energy. It is estimated that 3.8 American households can be powered for a day by the energy that is spent to generate one bitcoin transaction”.
Charles Hoskinson called Cardano a “third-generation blockchain”. He believes that the cryptocurrencies used for the mere transfer of money are first-generation blockchains, an example is Bitcoin.
Ouroboros, the protocol at the base of Cardano
Ouroboros is the protocol that powers the Cardano blockchain and has the great advantage of being designed from the inception as a mechanism for a PoS blockchain. It attempts to solve the problem of scalability but also the issue concerning the low number of transactions per second and data storage.
The latter problem should not be underestimated. With an increase in the use of the network, the blockchain starts to be heavy. Transaction data must be propagated to all participating nodes.
The Cardano roadmap: Shelley coming soon
The developers of Cardano (ADA) are almost ready to launch Shelley. Shelley will be a very important release that, among other things, will mark the transition from the current protocol, Ouroboros, to Ouroboros BFT. Ouroboros BFT will improve the current implementation in several respects and will bring Cardano to a PoS (Proof of Stake) model. The new protocol will require a hard fork to become operational and this will be enabled in the future.
Researchers and engineers in the team
Instead of simply presenting a basic whitepaper like all other cryptocurrencies, the developers presented a series of academic articles. The team behind Cardano’s development is a global collective of researchers and engineers. The team philosophy sees technology as something flexible, scalable and secure and it is only through serious and methodical research that this can be achieved. For this reason, the team placed the emphasis on scientific rigour in the development of Cardano and the ADA cryptocurrency.
As such, Cardano should introduce a new type of regulated computing that allows for better financial integration through its open access.
The official website of Cardano is very well done and includes a section that contains weekly technical updates, allowing all investors to follow closely the project.