Cardano is one of the most well-known blockchains to have successfully introduced a proof-of-stake consensus process, which is less energy-intensive than Bitcoin’s proof-of-work algorithm. While Ethereum, which is much bigger, will upgrade to PoS, this will be a gradual process. Cardano’s cryptocurrency is called Ada, which can be used to send and receive digital funds. According to coinmarketcap, Cardano’s Ada is the fifth most valuable cryptocurrency by market capitalization. So, what exactly is Cardano, and why could it be the future of smart contracts?
What is Cardano?
Cardano was created by Charles Hoskinson and Jeremy Wood in 2017. Hoskinson is famous for being one of the co-founders of Etheruem (ETH). Cardano is maintained by three separate independent organizations.
- The Cardano Foundation which is based in Switzerland and is supervising and overseeing the development of the Cardano blockchain.
- IOHK built and designed Ouroboros, the proof -of-stake algorithm Cardano uses in their system.
- Emuro, the company charged with encouraging other enterprises and organizations to adopt the Cardano technology.
What makes it special, as well as the technical aspects of it?
Cardano wants to solve 3 problems in the current generation of cryptocurrency, Interoperability, Scalability and Sustainability.
Interoperability: Many Banks don’t trust crypto as of now, what Cardano wants to do is to be the ”Internet of blockchains”, a blockchain that understands what happens in other blockchains.
Banks: Banks don’t trust transactions that are made in the crypto world because they don’t have any metadata, banks would like to know who made the transaction and for what reason. Cardano wants to allow people to add metadata to the transaction if they want to.
Sustainability: Cardano wants to make a Treasury , the idea is that the treasury will receive a small percentage of all transactions that happens on the network, it’s a special wallet that isn’t controlled by anyone. It’s a smart contract that can release a part of the funds to the developers that wish to improve the Cardano protocol.
Scalability: Transaction / per second, Network bandwidth and Data Storage. In order for a crypto to be a payment system you need to be able to handle transactions per second, Cardano uses Ouroborus for proof-of-stake instead of proof-of-stake which Bitcoins use.
Network bandwidth : What Cardano wants to do here is to make it easy to do transactions with the help of RINA ( Recursive InterNetwork Architecture) where it works like a TCIP protocol that has different nodes that talk to each other if needed.
Storage: By implementing Running , Compression and Partitioning
The potential of Cardano
Hoskinson has sculpted Cardano in a way that is meaningful, ensuring that it’s one of the best smart contract blockchain in the cryptosphere. Cardano is based on peer reviewed research and academic journals. Many have criticized the project as taking too long. This is because they are very meticulous about every detail, making sure that everything is perfect before progressing, believing that they think they build work for the people they build them for. Hoskinson says : ”I Am insulted that people message me now – not because of the great technology we have created, but because the price has gone up”.
Pros and cons
First we start with the pros :
Cardano is under a great development team and they have a lot of scalability potential which makes it easy for normal consumers to make quick and cheap transactions using the ADA cryptocurrency on their own network.
And then we have the cons:
Cardano’s drawback is that the blockchain is still under development and improves the scalability issues where they can’t make more than 275 transactions per second (TPS).
The future of Cardano
Greyscale is a trusted authority on digital currency investing. Right now Cardano does not have a trust, but it is said that in the future the price of Cardano will skyrocket and the investors will most likely get their money worth all the investment that they have done during the years, and Greyscale might add a Cardano trust. There is a lot of exciting news for Cardano coming up the next months, in which the network will be completely turned over to SPO control taking Cardano into the Goguen Era and even more exciting more announcements yet to be made.
Image: Pete Linforth
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