Introduction to Cardano Cryptocurrency
Since the conception of the Bitcoin cryptocurrency back in 2009, the virtual currency industry has witnessed unprecedented growth currently exhibiting nearly 1,400 cryptocurrencies. One of the newest players on the blockchain bandwagon is Cardano, which is considered a third-generation cryptocurrency.
Cardano, despite being on the market for less than a year, has quickly established itself among the top crypto traders. It currently has a market cap of $19.7 Billion. Herein is a comprehensive intro to the Cardano cryptocurrency and everything you need to know about it.
THE HISTORY OF CARDANO
Cardano is the result of a project that began back in 2015 that sought to reform the way cryptocurrencies are designed and developed. Charles Hoskinson is the man behind the project. For those who are unfamiliar to him, he is one of the co-founders and former CEO of the Ethereum project.
In 2014, Hoskinson left the Ethereum project before it launched and formed the blockchain development firm, Input-Output Hong Kong (IOHK), with his colleague Jeremy Wood. In 2015, a group of Japanese investors (Emurgo) approached IOHK with the aim of developing a blockchain that would serve as a cryptocurrency as well as a smart contract platform. This marked the birth of the Cardano project.
WHAT EXACTLY IS CARDANO?
Cardano is an open source and decentralized public blockchain that is powered by the ADA token. Cardano is a full blockchain, developed from scratch using the functional programming language Haskell. Charles Hoskinson recruited Philip Wadler to work on the project. Wadler is a principal designer of the Haskell language.
The Haskell language's approach to programming is very similar to mathematics thus, the code can be written precisely and can be mathematically verified. This means that Cardano is based on a secure and reliable protocol, which is its main selling point. The Cardano Settlement Layer (CSL) protocol has undergone rigorous peer review and has been widely accepted.
Cardano’s token of value is ADA. With this token, a holder can send a value to another holder, deposit funds on exchanges and pay for goods and services. ADA is the native token that is used in all application built on Cardano settlement layer.
Holders store the cryptocurrency in a wallet known as Daedalus. Daedalus was developed specifically for Cardano blockchain and has advanced security functions. This wallet will not only support ADA in future but also Bitcoin and other cryptocurrencies.
WHAT MAKES CARDANO STAND OUT?
Cardano was built to solve the problems associated with the first and second-generation cryptocurrencies. These problems include lack of contracts, scalability, security, sustainability, interoperability and lack of proper developer experience.
One challenge that cryptocurrencies face is increasing data sizes. Cardano employed the Ouroboros concept to solve sustainability problems. Ouroboros is a proof-of-stake consensus algorithm. Bitcoin and many other cryptocurrencies use a proof-of-work algorithm, whereby miners resolve the cryptographic puzzle to reach a consensus on the public ledger state.
In a proof-of-stake system, a consensus is reached through a coin-holder vote. This allows for the creation of multiple blockchains at a given time that run parallel. As a result, it can handle a large number of transactions.
For this reason, the proof-of-stake system is more energy efficient, and coin holders can decide on how the protocol evolves. In addition, Ouroboros exhibits rigorous security standards meaning that future capabilities will also be secure.
The basic idea behind interoperability is that no one coin can rule the world. Cryptocurrencies exist along with traditional banks (Legacy systems). Since there is no canonical method for these systems to understand each other, intermediaries such as bittrex and Coinbase exist to control value movement between them. These exchanges are fragile and are open to hackers or regulatory policies.
Cardano seeks to make cross chain transfers secure and reliable while eliminating the need for a trusted third party. This can be possible through a sidechain whereby data in a blockchain is structured to identify a legitimate transaction. This notion can also protect against the double spending problem.
Sustainability involves a system being able to cater to its own bills. Sustainability has two traditional approaches, Patronage and Initial Coin Offering (ICO). Patronage involves established companies providing the funding but comes at the cost of protocol influence, the exact opposite of decentralization.
Most cryptocurrencies including Cardano have gone the ICO way, which involves token sales to pre-allocated investors. The ICO method is not continuous, and the funds will always run out. Cardano seeks sustainability by creating a decentralized treasury where funds from the blockchain will go. This treasury will be funded through inflation. All financial proposals will be handled via a democratic voting mechanism.
Cardano is 3rd generation cryptocurrency developed with peer review, employs high assurance application standards and is designed to be scalable, sustainable and interoperable. Cardano is still in its early stages, and the bulk of it is yet to be developed. Nonetheless, it provides a solid base for a very competitive cryptocurrency.
Thanks @yaya91 and welcome to the forum.
Going to buy some Cardano?
@joes I'm hodling with ripple :)
@yaya91 I'm a big Ripple fan too! Its just gone up to $1.05 :)
Crypto "Experts" said Cardano is going to hit $20 by the end of 2018. They made this prediction in December 2017 when the pump was over the roof.
Let's see if the predictions are going to be true
My only issue is that buying/storing ADA is a slight ballache since you need to first purchase it at an Exchange and then transfer it to the Daedalus wallet.
It would be nice if I could store them in my Exodus wallet along with all my other crypto.