Cardano is a decentralized public blockchain and cryptocurrency project. Find out everything you need to know about this open source platform today in our review.
What is Cardano?
Cardano, found online at CardanoHub.org, is an open source blockchain technology project. Like similar projects, Cardano consists of a platform and a cryptocurrency. Cardano’s cryptocurrency, Ada (ADA), currently sits in the top 15 largest cryptocurrencies by market cap.
Cardano was launched on September 29, 2017, after two years of development.
Cardano’s developers are creating a smart contract platform that seeks to deliver more advanced features than any other protocol previously developed. Ethereum was the first blockchain to feature smart contracts. Today, a number of others have been built with smart contract functionality.
Overall, Cardano claims to be “the first blockchain platform to evolve out of a scientific philosophy and a research-first driven approach.”
Cardano is being actively developed by an international team of engineers and researchers. The project began in 2015. Interestingly, the project is led by former Ethereum CEO and co-founder Charles Hoskinson. Hoskinson left the Ethereum project before the network launched, and eventually went on to found IOHK.
The platform is entirely open source and patent-free.
How Does Cardano Work?
So far, Ethereum has been the lead player in the world of smart contracts. Now, with Cardano, Ethereum has a competitor.
Cardano claims to have more advanced features than any other protocol ever developed. The development team claims that its ADA cryptocurrency is “the most precisely engineered cryptocurrency yet”. The platform incorporates concepts like distributed systems, mechanism design, and cryptography, and the Cardano cryptocurrency is the first to be based in Haskell code, an industrial-strength language.
The blockchain uses a unique proof of stake algorithm called Ouroboros. It also has a foundational settlement layer linked to a control layer in a unique way.
That settlement layer has a unit of account, while the control layer runs on smart contracts. The control layer will be programmed to recognize identity, assist compliance, and allow blacklisting, among other purposes.
One of the immediate distinctions from Cardano is that it’s designed to comply with regulators while still maintaining user privacy. Cardano claims to be the first protocol that balances these requirements. Some believe Cardano is one of the more future-proof platforms for precisely that reason.
Another unique advantage of Cardano is that the system can be upgraded through the use of soft forks.
How Does Cardano’s Proof of Stake Mechanism (Ouroboros) Work?
Ouroboros is a proof of stake algorithm created specifically for Cardano. The algorithm determines how individual nodes reach consensus about the network. The algorithm is the foundational layer of the Ada cryptocurrency.
One of the immediate advantages of Cardano’s proof of stake system is that it eliminates the need for an energy-hungry proof of work protocol. PoW blockchains like bitcoin have been criticized for their energy consumption: computers need to spend energy (“work”) to process transactions on the bitcoin network. Proof of stake algorithms work differently. This was designed to give Cardano better scalability.
A complete explanation of the Ouroboros proof of stake algorithm is outside the realm of this article. However, there’s a good hour long video on the algorithm here.
Basically, like other proof of stake algorithms, Cardano’s Ouroboros refers to stake as the relative value held by addresses on the node, and stakes are chosen at random to ensure the security of the blockchain. The unique aspect of Ouroboros is that it produces randomness using a secure, multi-party implementation of a coin-flipping protocol.
How Does the Daedalus Wallet Work?
Cardano’s wallet is called the Daedalus wallet. It’s a secure, multi-platform, hierarchical deterministic (HD) wallet for the Ada cryptocurrency.
You can install Daedalus on your system to open the application, then get started with the Cardano ecosystem.
With the wallet, you can send and receive Ada, then view a history of the transactions you’ve made. You can also use the Cardano Blockchain Explorer to get a history of previous transactions.
Other Daedalus wallet features include all of the following:
- Encrypted private keys and spending passwords, which together offer protection against security threats like malware
- Wallets can be exported to paper certificates, giving the maximum security option of placing funds in cold storage
- Ada redemption is built directly into Daedalus and supports encrypted/unencrypted redemption certificates
- Configurable transaction assurance level monitoring that allows users to be sure when transactions become irreversible
Future planned features include support for Ethereum Classic and Bitcoin, a mobile wallet for Android and iOS, staking support, and an application store where users can download community-built applications. The wallet also plans to support “virtually any cryptocurrency” in the future.
Who’s Behind Cardano?
Cardano is led by the Cardano Foundation, IOHK, and Emurgo. The Cardano Foundation is registered in Zug, Switzerland. Input Output HK, or IOHK, is a blockchain research and development company founded in 2014. IOHK focuses largely on academic applications for blockchain technology, and is incorporated in Hong Kong. Emurgo is a Tokyo-based blockchain technology development company.
Overall, the platform is in development by a group of experts around the world.
The first layer of Cardano was released on September 29, 2017 (mainnet launch). The development team retains a detailed roadmap you can view online here: https://cardanoroadmap.com/. Cardano is currently in the “Byron” bootstrap phase.
The Cardano ICO
The Cardano ICO took place in four stages between September 2015 and January 2017. All stages of the ICO had heavy KYC requirements – as mentioned above, Cardano makes a big deal out of the fact that it’s the first platform built with KYC verification from the ground up. 95% of the initial investors were Japanese.
A total of 26 billion tokens of the 45 billion total supply were sold during the token sale. Cardano raised a total of $63 million USD through the sale.
As of Early November 2017, Cardano’s Ada (ADA) tokens have a market cap of around $840,000,000, with an average price of $0.032 USD>
Cardano is a blockchain technology that aims to improve and expand on the concept of smart contracts. Launched on September 29, the platform promises to deliver more advanced features than any protocol previously developed. Key features introduced so far have included the Ouroboros proof of stake mechanism, designed to be one of the most scalable consensus algorithms in the community today, and the Daedalus wallet, where users can hold their Ada tokens.
To learn more about Cardano, visit the platform online today at CardanoHub.org.