What Is Cardano Cryptocurrency? | Youth Ki Awaaz
The Cryptocurrency Cardano (ADA) is one of those coins that suddenly appeared in the sand, surprising investors with its rapid growth (at the end of 2017, the coin grew 65 times in 3 weeks).
Cardano is a platform for developing and managing decentralised applications (Dapps) through smart contracts. The developers themselves call the cryptocurrency Cardano Blockchain 3.0, focusing on the expanded opportunities to use a decentralised platform, improved security and scalability compared to Bitcoin (Blockchain 1.0) and the cryptocurrency Ethereum (Blockchain 2.0).
In this article, we will take a closer look at the Cardano cryptocurrency and try to find out why it has become so popular and what its future is.
What is Cardano (ADA)?
Cardano (ADA) is a project that started its history in 2015, although the coin was launched only in 2017. Before presenting their project to the world, the developers studied various cryptocurrencies for a long time, trying to identify their weak points and thinking about how to improve technology.
According to them, Cardano was developed using “scientific philosophy”. Unfortunately, one can only guess what was meant, as there is no detailed explanation at the moment.
Like most cryptocurrencies, the launch of the ADA coin was preceded by the launch of an ICO. It took place in four stages from September 2015 to January 2017. After the initial coin distribution was completed, the team raised $63 million, with approximately 95% of all tokens purchased by Japanese investors. Because of this, the large Cardano coin was unofficially named “Japanese Ethereum”.
A total of 45 billion tokens were issued. The coins were distributed as follows:
- 11.5% — project fund;
- 57.6% — to ICO investors;
- 30.9% — payment of incentives for the generation of blocks and verification of transactions.
The idea of creating the Cardano cryptocurrency belongs to Charles Hoskins, a famous programmer who was involved in the development of Ethereum but left the project even before the ICO was launched. Charles created a strong team of professionals, whose active work allowed Cardano to see the light of day.
However, the Cardano cryptocurrency is not a project of a developer; there are three companies behind that are working on the cryptocurrency development services and promotion of this coin:
IOHK (Input Output Hong Kong) — The company was founded by Charles Hoskins and another famous programmer Jeremy Wood in 2014. His area of responsibility includes developing and improving technology, creating a wallet and making changes to the Cardano protocol.
It should be noted that this company is not only dedicated to the creation of engineering solutions in the field of blockchain technologies but also has its own research base, represented by 17 professionals in this field. IOHK also supports not only Cardano but also other Cryptocurrency development company projects, notably Ethereum Classic.
The Cardano Foundation is a non-profit organisation based in Switzerland. The tasks of the Cardano Foundation include:
- Public relations support and popularisation of the Cardano cryptocurrency;
- Provide information on development, upcoming innovations and changes;
- Monitoring the implementation by the Cardano team of the plan outlined in the Cryptocurrency Roadmap;
- Influence government and regulatory bodies;
- Conclusion of strategic alliances with companies interested in implementing blockchain technologies in their products.
Emurgo is a Japanese venture capital firm that invests in emerging blockchain projects. In the Cardano ecosystem, Emurgo helps companies integrate the cryptocurrency protocol into their business processes. Furthermore, in the future, the company plans to support and assist in the development of companies that will develop their decentralised applications based on the Cardano blockchain.
Cardano is supported by three organisations. Their interaction is very interesting: IOHK is dedicated to creating a scientific and technical foundation and supports the protocol, the Cardano Foundation helps popularise and promote the currency among the masses and Emurgo helps interested companies with the implementation of Cardano.
Technology — Ecosystem
When forming a transaction on the Cardano blockchain, you send a whole series of data, such as: who transferred the coins, to whom, where, how much, what are the transfer conditions, why the transfer was made.
The Bitcoin blockchain allows you to send only a part of this information, the Ethereum blockchain has more advanced capabilities, but it is far from ideal.
In particular, the disadvantage of Ethereum is that writing to the blockchain and launching a smart contract is done in one transaction, which automatically increases the size of the required gas, that is, the Ethereum blockchain does not allow to store this data separately. It is this shortcoming of the popular currency that was taken into account when developing the Cardano ecosystem.
The Cardano cryptocurrency has a two-tier structure:
Settlement level [Cardano Settlement Layer (CSL)] — This level is responsible for the economy of tokens and the balance of user accounts. Through transactions, you can send Cardano’s “mother” currency, which is called ADA. The information is written as follows: 3 ADA from wallet A to wallet B.
Simply put, the CSL level consists of the code that is responsible for the implementation of ADA and user accounts in the Cardano system. This layer is very flexible and easily customisable, so it can be used as a standardised transaction protocol in the future.
Control Layer [Cardano Control Layer (CCL)] — This layer is responsible for launching smart contracts and also supports some regulatory functions, for example, digital user identification.
Advantages And Disadvantages Of Cardano
Advantages of Cardano:
- It is the only currency that uses a mathematically proven security protocol, as well as the Haskell programming language, which allows code to be mathematically correct and protected from potential human error.
- Improved scalability of the Cardano network through the use of a two-tier blockchain.
- The developers plan to implement quantum digital signatures, which would theoretically make the Cardano blockchain safe from being hacked by quantum computers.
- The team clearly follows the established roadmap and regularly publishes progress reports.
- The project has a strong team backed by three major organisations and scientists from the world’s leading universities.
- The ADA token sale has been audited successfully. The results of the verification have been published on the company’s website.
Disadvantages of Cardano:
- The consensus protocol and platform to launch smart contracts are still under development. At the moment, decentralised applications cannot be developed on the Cardano blockchain, which is a very good opportunity for competitors to take their’ place in the sun’.
- The presence of serious competitors against Ethereum (in which the dApps launched by other companies are already running) and NEO.