Cardano In Crypto and Blockchain: Everthing you should know about ADA Cardano

Cardano in Crypto

Crypto Rishi

1 month ago|6 min read

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1.  Ethereum

Familiar with Crypto, it’s likely, you know the name Vitalik Buterin in 2015 Buterin and a team of co-founders launched a little tiny project called Ethereum now known as the second-largest Cryptocurrency with incredible potential, Ethereum had a few other important founding members. One of these members was Charles Hoskinson, just a couple of years later, Hoskinson found himself at the center of a brand new project launching “Cardano” named after the Italian mathematician Derolamo Cardano.

2. Cardano

Cardano is simply just a proof of stake Cryptocurrency, now to really explain what it means and to summarize, why it’s not just some random altcoin. Basically, Hoskinson saw that Cryptocurrencies would suffer from three main problems. These problems are scalability, interoperability, and sustainability. Let’s go through each of these issues to understand the intentions behind the project.

3.  Block Size

Number one is scalability, fans of Bitcoin know this problem all too well because of Bitcoin’s block size. The network can only confirm around five to seven transactions per second now. This is not even comparable to the visa behemoth that can do tens of thousands of transactions per second, the block size debate in Bitcoin raged on for years, but at least one question remains for basically any Cryptocurrency. How can this project scale now? As Hoskinson said, we actually want things to speed up as more users use a system not to slow down as many of them do. If the network is being used, it needs to speed up in order to be consistent for its users.

4.  Epochs

What he meant was that a Blockchain’s capability should scale linearly with its usage. Cardano solves this by using what are called epochs, which basically divide up, who validates certain blocks in the Blockchain to be even more precise. They use slots and any of the nodes which are just computers from people or organizations that are running the Blockchain.

5.  Ouroboros

They can be nominated to be a slot leader. These terms, don’t really mean much, but they are what allows Cardano’s proof of stake to scale. Cardano calls this system “Ouroboros”, but Ouroboros could warrant its own article due to its complexity. The important thing here is that slots can be divided up further, which lets the network scale.

6.  Wireless

Moving on the second problem is interoperability, so this is a very old technological problem. Let’s think about this using an example of early wireless networking, if you’ve ever wanted to set up a wireless network in your house, you know you have to connect your devices with a router so that the signal can reach your device.

7.  Bridges and Protocols

But what, if your apple iPhone only connected to apple routers, it wouldn’t be very useful if everybody had to get all the same hardware for everything from the ground up and from the same brand, and in fact that would probably be considered a monopoly by the united states government. So how does Cardano make sure that Crypto doesn’t suffer from the same problem, well, it allows for people to easily bridge Cardano and other Cryptocurrencies that use other Blockchains by using something called the “KMZ Sidechains” protocol. This is basically the Crypto version of being able to easily exchange US Dollars for Canadian dollars or Euros or some other currency. Now, unlike other Cryptocurrencies, Cardano knows it won’t be the only Cryptocurrency and because of this it proactively works on an interoperability solution using bridges.

8.  Sustainability

The third problem is sustainability. Now, if Cardano or any other Cryptocurrency is going to host much of our financial lives, obviously we would need a way to guarantee that the system stays functioning. So when we say sustainable, we don’t necessarily mean environmentally sustainable.

9.  Environmentally Sustainable

Although many say that Cardano, because of its proof of stake, instead of proof-of-work mechanism, is environmentally sustainable, there is a huge debate about environmentalism in the Crypto world, Regardless of what we are talking about is the network’s ability to keep the lights on, continuing to make improvements and have a healthy development. Community Cardano solves this by establishing a treasury that collects fees and pays them to those who make contributions to the network.

10.  ADA

In short, Cardano is a self-sustainable Cryptocurrency that has intentions of improving itself in the future, and it is developed with that in mind. Now you’ll notice that Cardano seems to be designed with one thing in mind: solving problems very rationally and logically, this is a project created and run by a man who used to be a mathematician now this shows up in several ways, namely the fact that it was named after an Italian mathematician, the token which actually carries value and is used on the network is called ADA, so Cardano is the Blockchain and ADA is the coin. Now, this is not the Americans with Disabilities Act, but it comes from the name of a woman who is now considered to be the first-ever computer programmer Ada Lovelace.

11. Branding

Beyond naming conventions Charles Hoskinson clearly has shown ambition for tackling big challenges through methodical, reasoned, and problem-Solving within the Cardano project, there is tons of research being done, papers being written and even peer reviews to get third party feedback. Some may say Charles even has a cult-like following, but he does do often live stream update logs to update his audience despite Cardano’s, unique style and branding.

12.  A Comparison

You might just ask yourself: how exactly is it different from Ethereum well lucky for you we’re going to cover it now, we’re not going to speculate about individual conflicts or personalities, but the story goes that Hoskinson thought Ethereum should be a for-profit entity, whereas Buterin wanted Ethereum To stay as a non-profit, both of their wishes ended up coming true in a way, Buterin stayed with Ethereum and Hoskinson took a sabbatical shortly, followed by a proposition fellow co-founder of Ethereum Jeremy Wood approached Hoskinson about creating a for-profit entity that would create Blockchain projects for Companies, governments, and even other organizations, this company became known as IOHK or Input Output Hong Kong and it’s an homage to the engineering term and to the place that it was incorporated. So what does this have to do with Cardano you ask, IOHK’s main project is what we now know as Cardano. Although Ethereum and Cardano are both smart contract platforms, they do differ in several ways.

13.  Proof of Stake

The first is that Cardano has been a proof-of-stake Blockchain from the beginning. This means that instead of Bitcoin’s method of doing really hard math problems to mine coins, they validate transactions according to how many tokens the validators stake. So, for example, if you own a lot of ADA, you can stake that ADA and have more power in the network than those who have little ADA. Ethereum, however, started as a proof of work chain but is now migrating to become a proof of stake chain. Another thing that’s important is that like Bitcoin, Cardano is deflationary, this basically means there is a fixed amount and in the case of ADA 45 billion total ADA coins will be minted as opposed to Ethereum, which mints more and more Ethereum every year. From an economic perspective, that would generally mean that all other things being equal ADA should increase in value or appreciate more than Ethereum.

14. Partnerships

However, that is as close to price speculation, as we will get to today with the future in mind, though, let’s take a look at where Cardano is being used in the real world and where it might be used in the future. Despite the ICO craze of 2017, which was known for a lot of shady scams, Cardano actually started off with an ICO where it differs, though, is from that point on Cardano showed it should be taken seriously through its commitment to rigorously researching and testing its solutions. IOHK helped both the University of Edinburgh and the University of Wyoming support their Blockchain initiatives, and from there has launched into several real-world partnerships, we can see the breadth and depth of Cardano’s potential when we look to its partnership with the government of Georgia, the Country, not the state, and they have decided to build an ID verification system using both Cardano and IOHK’s enterprise solution Atala.

15. Verification

This is already getting more complicated and a little bit outside of the scope of this article, but they followed this in 2021, with an agreement with the government of Ethiopia to use Cardano for ID verification for students commercially, though, and likely its most impressive partnership is with New balance, I know what you’re thinking that’s right. IOHK has been hired by new balance to use its technology to verify the authenticity of its sneakers very similar to how VChain is used to authenticate supply chains using a Blockchain as a methodical and precise organization. IOHK has released a road map for Cardano’s future, which includes five era’s foundation, decentralization, smart contracts, scaling, and then governance, which you can actually read the roadmap.

Thank you for reading.

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Crypto Rishi

Hi, I am an anonymous crypto guy. I am trying to exchange knowledge and build a community around crypto and blockchain. Find all the informational content about crypto and blockchain on my Feeding Trends blog here. If you like the content follow me to get a regular updates.

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