Cardano [ADA] is slowly elbowing its way in the smart contract space, which has been dominated by Ethereum [ETH] so far. With the former Ethereum CEO, Charles Hoskinson steering the Cardano revolution, it looks like this new entrant is all set to become the next big player.
Beginner’s Guide to Cardano [ADA] – Information, Review and How to Buy
Gone are the days when just a handful of major players dominated the cryptocurrency marketspace. Today, it’s all about altcoins, and one of these is Cardano and its coin – [ADA].
The technology behind Cardano is brand new, and here, in today’s article, you can find all about the technology, the team behind it, the mission and other tips on how to buy and store [ADA]. Additionally, you can also check out the lists of pros and cons of Cardano [ADA] below. So, we hope by the time you finish reading this article, you would have decided whether to invest in the project or not. Let’s get started without further delay.
What is Cardano [ADA]?
The Cardano project was started in 2015 by Input Output Hong Kong (IOHK). Charles Hoskinson, the co-founder of both Ethereum and BitShares is in the CEO of IOHK.
The idea of Cardano was to build a blockchain that overcomes the disadvantages of older blockchains like Bitcoin, Ethereum, and others. It aims to make transactions – cheaper, faster and more in number. According to Hoskinson, Cardano is the third-gen of blockchains, with the Bitcoin and Ethereum being the first and second gen respectively.
So, instead of making use of existing code, the Cardano blockchain has been rewritten from scratch. Very often, people assume that Cardano and ADA refer to the same entities. However, there’s a massive difference between the two.
Cardano is the name of the blockchain, which allows people to trade, send and receive funds. Whereas, ADA refers to the name of the cryptocurrency. This is similar to Ripple, where Ripple refers to the underlying blockchain, and XRP denotes the currency.
Cardano uses a smart blockchain, on which you can use smart contracts, just like with Ehtereum. Smart contracts let two or more people enter into an agreement, without needing a third-party for verification. In a smart contract, once the pre-defined conditions are reached, the rest of the process becomes automated.
According to CoinMarketCap.com, here’s the Overview:
Network – Cardano
Currency – ADA
Founded – 2015
Who is behind Cardano
There are three primary organizations behind Cardano. This includes
The Cardano Foundation – based in Switzerland, it’s an independent body that is designed to support Cardano users with all regulatory and commercial matters.
The IOHK – a leader in cryptocurrency research and development, this team is in charge of developing the platform until 2020.
Emurgo – This body invests in emerging startups and helps to build commercial solutions based on the Cardano blockchain.
How Much is Cardano Worth?
Market Cap – $4,169,384,067 USD
Volume (24h) – $36,511,800 USD
Circulating Supply – 25,927,070,538 ADA
Overall Supply – 45,000,000,000 ADA
Current Price – around USD 0.16
Peak Price – 1.28 USD on 4th January, 2018
How does Cardano Work?
The Cardano blockchain can be divided into two distinct layers.
Settlement Layer – This layer allows users to trade send or receive ADA coins from one wallet to another. This is similar to how users transfer other digital currencies like ETH.
Computation Layer – This layer is responsible for creating and helping users enter into smart contracts with others.
Generally, blockchains have only one layer. This dual-layer is what distinguishes Cardano from other digital currencies.
Here are a few potential benefits of this dual-layer setup.
The computational layer is highly adaptable. It makes easy to make different changes for various categories of end users. For instance, different nations have their own regulations, when it comes to cryptocurrencies. Cardano can change how data is stored and accessed in accordance with various local laws. This ensures users remain private while being compliant with local regulations.
Additionally, the computational layer makes it easy for soft forks, without disturbing the blockchain. This is something that wasn’t possible with older blockchains.
Ouroboros, the Proof of Stake Algorithm – Cardano
Cardano is decentralized. Meaning, no single central authority has control over the network. Just like BTC, ETH and XRP the network is operated by peers. However, Cardano uses a different proof-of-stake algorithm called as “Ouroboros.”
Before, you take a look at the advantages of Ouroboros, let’s have a quick glance at the “Proof-of-Work” algorithm used by BTC and several others.
Bitcoin works on a consensus model named “Proof-of-Work.” To authenticate a transaction, miners use their computing power to solve a complicated puzzle. This puzzle is a highly complex mathematical equation that cannot be computed manually.
The miner who cracks the puzzle first is awarded bitcoins. The major problem with PoW is that as the puzzle gets more and more complex, miners have to spend a huge computing power on it to crack it.
According to a report by GreenTechMedia in December 2017, Bitcoin miners used more electricity than the entire country of Ireland! That doesn’t seem very economical, right?
Ouroboros Proof of Stake Algorithm of Cardano
The Cardano blockchain uses a consensus mechanism that runs on Proof-of-Stake. Here’s how it works:
People who validate transactions are known as “validators” and not miners.
Validators freeze a part of their ADA coin stash. This is known as the Stake.
Once validators verify a transaction, they receive additional coins as a reward.
The higher the stake, the better are the chances of the validator winning the reward.
The amount of coins in the reward is proportional to the value of the stake.
The Ouroboros is more efficient and eco-friendly that PoW. It requires much less electricity for operation, and the transaction fees are also kept low. The Ouroboros protocol ensures that everyone on the network has a fair chance of earning the reward.
What makes Cardano [ADA] blockchain Unique?
Here are a few Cardano features that make it stand out from other digital currencies.
Haskell is a computer language mainly used for conveying complicated mathematical sums as coding. With Haskell, Cardano ensures quick development times using shorter lines of code and the vast expanse of available code libraries.
Governance by ADA Owners
The development process of the blockchain is extremely crucial in determining its future functionality. Sadly, most cryptocurrencies entrust the development process to a handful of individuals. This means the end user has no say in the proceedings.
This is what makes the Cardano blockchain unique. Token holders can take part in the governance of the network. If any token holder proposes an upgrade or change to the system, it’s put for a vote. If the proposal wins a majority, the appropriate updates and modifications are made to the system.
It’s a highly secure wallet that uses advanced cryptography to store your ADA coins. The wallet is quite easy to use and allows for easy management of funds.
However, members of the cryptocurrency community have reported various usage issues with the Daedalus wallet like the inability to sync blocks, lack of connection with the network and the transactions not reaching the network.
Cardano recently released a beta version of the Daedalus wallet, and the Linux version is in the works. Check out the Cardano official roadmap to know the progress.
Cardano offers both a Cryptocurrency and a Technological Platform
In addition to the ADA coin, Cardano provides a technological platform, which can run decentralized apps (Dapps) for governments, individuals, and other organizations.
Moving on to the,
Pros and Cons of the Cardano [ADA] Cryptocurrency
Has a strong development team. The founder has experience collaborating on other successful projects like Ethereum and BitShares.
The first blockchain to have more than one layer (settlement and computational layer).
No limit to scalability. The blockchain has the ability to process any number of transactions.
Cheap and fast transactions.
The consensus mechanism of Cardano is more eco-friendly and less expensive, as well as fairer compared to older blockchains.
The claims made by the Cardano blockchain have not yet been proved as some parts of the network are still under development.
Ongoing problems with Daedalus, the official wallet.
How to Buy and Trade Cardano [ADA]?
Currently, you can buy and sell Cardano at one of the several cryptocurrency exchanges available online. There are plans to make it available on a few ATMs in Japan and also a Cardano debit card. The debit card will let you use ADA just like any other currency, and you can check your balance using a connected app.
Right now, you cannot purchase ADA with fiat currencies. The easiest way to buy ADA is to first convert your fiat currency (USD, Euro, Yen, etc.) into bitcoin or Ethereum using Coinbase or other exchanges. Then, you can convert BTC or ETH to ADA at cryptocurrency exchanges like Binance.
Should you invest in Cardano [ADA]
Cardano seems like a reliable blockchain platform and is backed by scientific procedures of development. The two main things that Cardano has going for it are a sound, development team with scientific researches and advisors and its open-sourceness.
However, there’s still a long way to go before the Cardano project can be successfully completed. And, if it does so, then it could become the ultimate altcoin for Ethereum.