Cardano (ADA) Wants To Fix Bitcoin (BTC) And Ethereum (ETH) Cryptocurrency Problems
The cryptocurrency community has always lent itself to constant improvement and change. Because of the decentralized nature of cryptos like Bitcoin and Ethereum, it has become more important than ever that developers from all around the world work to contribute to a better system for all to enjoy.
In the beginning days of cryptocurrency, much of the innovation was based on the creation of new concepts for the original Bitcoin blockchain. But as developers got more daring and sought more revolutionary changes, the creation of new cryptocurrencies became the norm.
Cardano is one perfect example of a cryptocurrency created in an attempt to reform existing digital assets. Cardano, at its core, was coined out of a desire from developers to renovate some of the problems associated with existing cryptocurrencies, particularly Bitcoin and Ethereum, the most popular coins currently in the crypto markets.
It may not seem important at first, but investors and market participants need to understand the history of Cardano (ADA) in order to begin to conceptualize how the asset could change the face of the community. Especially for those users who want to invest in a cryptocurrency with significant technical prowess, the historical context that bred Cardano is a big piece of the puzzle.
One of the many co-founders of the Ethereum platform actually came forward with the creation of the Cardano cryptocurrency. Charles Hoskinson had a philosophical issue with PoW, or Proof-of-Work. PoW is one of several potential methods of consensus verification, a process essential to the functionality of any blockchain. Under PoW, consensus is achieved by the process of mining blocks, whereas the mining process requires significant computing power and energy.
Hoskinson argued that the PoW system was problematic and not as effective as it could have been. Along with other prominent voices in the cryptocurrency community, he felt that the idea of PoW required far too much energy consumption and was too inaccessible to the general cryptocurrency community.
Proof Of Stake
As an alternative, PoS, or Proof-of-Stake systems allow for less energy consumption, as well as what is generally considered to be a more effective and secure method of verifying transactions and generating consensus. PoS allows consumers on the blockchain to stake cryptocurrencies in the system in exchange for certain powers in the mining and masternode verification process.
New Smart Contracts
Additionally, the Cardano system implements a new language for the specific Cardano domain called DSL. The language is specifically created to execute financial contracts, an important process in the modern blockchain technological sphere. Smart contracts, of course, were brokered and initially developed by the Ethereum blockchain, to significant success.
But as the tech developed, Cardano decided to implement their own new system for smart contract verification. For Cardano, the use of smart contracts is an incredibly important part of the blockchain. It allows the network to execute a significant amount of transactions without the need for outside verification of a third party.