Cardano is a decentralized blockchain developed in layers that aims to provide advanced features that have never been seen before. This so-called “third generation” environment incorporates contract functionalities and has its own cryptocurrency for exchanges: ADA.
Cardano (ADA): the essentials to know
1 – What is Cardano crypto (ADA)?
- Basic principle : Cardano is a decentralized blockchain project developed in layers that aims to provide advanced features never before seen. This environment has the particularity of emanating from a very large collective of engineers and researchers ensuring the improvement and updating of the blockchain easily using soft forks.
- Use : Cardano has its own “ADA” token, allowing in particular to operate asset transfers. The environment also has other integrated uses (smart contract, applications, etc.) that will be activated as the ecosystem evolves.
2 – The project and the blockchain behind Cardano
- Project : Cardano intends to address the scalability issue that traditional blockchains face (like Ethereum and its ever-increasing gas fees). To do so, and through the use of cutting-edge mathematics and new technologies, Cardano aims to create a new form of so-called “third generation” blockchain infrastructure.
- Blockchain: To achieve this, five main steps have been defined. Each participates in the interweaving of the network, ultimately resulting in obtaining a fully decentralized network.
- Phase 1 “Byron”: commissioning of the network with basic functionalities such as ADA token transfer.
- Phase 2 “Shelley”: implementation of a decentralization with nodes managed by the community.
- Phase 3 “Goguen”: activation of smart contracts on the network.
- Phase 4 “Basho”: in order to improve the scalability and interoperability of the network, Sidechains (side chains) are introduced.
- Phase 5 “Voltaire”: Completion of the decentralization of the network with the addition of governance and self-financing.
3 – Analysis and opinion on Cardano (ADA)
- This “third generation” blockchain solves the scaling issues typically associated with generation one (Bitcoin) and generation two (Ethereum). Concretely, the transactions per second are more numerous and make it possible to reduce costs thanks to its proof of stack protocol called Ouroboros.
- This ecosystem uses a Proof of Participation (PoS) consensus that is much less energy intensive than the Proof of Work (PoW) algorithm found on other decentralized networks (up to 4 times more energy efficient than Bitcoin).
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- The operation of its blockchain system is particularly complex, which penalizes the implementation of the various desired functionalities. As such, the launch of phase 3 “Goguen” allowing developers to create and feed smart contracts and decentralize applications (dApps) has experienced some hiccups.
4 – How to earn or mine Cardano (ADA)?
When it comes to mining, Cardano relies on a Proof of Stake consensus protocol to verify and validate transactions. Thus, participants who put their ADA in the Cardano blockchain will be able to enjoy additional token rewards.
Besides, Cardano is one of the most staked cryptos on the market. More than 2000 pools present within the blockchain are dedicated to staking. This is because the Cardano network is fully decentralized and fully owned by its community of holders.