What is Cardano?
Cardano is a public blockchain platform that was released in 2017 with the aim of changing the way cryptocurrencies are designed, developed and operated. With decentralization as one of its primary goals, Cardano uses a groundbreaking proof-of-stake blockchain network that is also being developed into a DApp (decentralized application) development platform.
Cardano, which is home to the Ada cryptocurrency is being developed and maintained by a decentralized community of developers, engineers and researchers. Since its inception, Cardano is pioneering a new approach with a lot of emphasis on science and research. Cardano’s long-term vision is to deliver a robust financial service to the masses and enable economic empowerment. But instead of attempting to overhaul the entire banking and financial system, they aim to make the current systems more efficient and cheaper. Cardano is a blockchain and a smart contracts platform, with the potential to change the world for good.
What Is Special About Cardano?
Cardano, which had a revolutionary approach to its development claims to be the “first blockchain platform that evolved out of scientific philosophy and a research-first driven approach”. Cardano’s completely research-driven approach aims to build a resilient and sustainable blockchain to achieve security, scalability, and interoperability that is required for a real-world application platform. Cardano is being developed to be that platform of choice that hosts DApps which is expected to explode in significance in the future.
While most cryptocurrencies in the market struggle to find that balance between security, speed, and decentralization, Cardano has always strived to be that exception. Since it was designed as a proof-of-stake system it is more efficient than proof-of-work systems like Bitcoin or Ethereum. The proof-of-stake system has helped Cardano avoid any scalability issues and that is being done without sacrificing security or freedom (decentralization). And the fact that it manages to balance security and scalability without sacrificing decentralization distinguishes it from other blockchain platforms.
One of the primary goals of Cardano is to deliver reliable and secure financial services to the masses. For this to happen, it had to build an inclusive, fair and resilient infrastructure that has the potential to scale on par with legacy financial systems. Interoperability, the ability to interact or operate with other systems, has also been one of the main focuses for Cardano. Cardano is also designed to actively work against economic incentives that would be detrimental towards the goal of keeping the platform decentralized. This was achieved by making it less attractive for a stake pool to become too big and by avoiding large pools from dominating the system.
Openness and transparency have always been important in the development of Cardano, and they have publicly published all research and technical specifications, and all development activity is made publicly available. The vision behind Cardano was a world without intermediaries, where the power lies with the empowered many and not by an accountable few. The control over data and how it interacts and transacts has to rest with the individuals. Businesses could grow independent of the bureaucratic power structures that weigh them down and avoid monopolistic tendencies. And societies could emphasize self-governing, fairness, and accountability which would help them pursue true democracy.
How Does Cardano Work?
Cardano was designed from scratch and has been verified by a community of top engineers, researchers and academic experts. The platform was designed as a 2-layer platform that separates the accounting ledger, Cardano Settlement Layer (CSL) where all the crypto transactions are processed, from the reason why these transactions occur. The second layer, Cardano Computational Layer (CCL) shows the reason as well the condition behind the transaction.
The separation of these layers allows for more flexibility in the design, use, privacy and execution of smart contracts. The same contract can be written in a way that it can be adopted according to the financial and monetary regulations of different countries. The layered approach also allows the coders and engineers to maintain and upgrade the blockchain with soft forks without causing disruptions to the settlement layer or Ada. Cardano uses Ouroboros, an innovative algorithm that uses proof-of-stake (PoS) protocol, which defines how a consensus about the network is reached between individual nodes.
Cardano Foundation is the legal custodian of the Cardano brand and they work with IOHK and EMURGO. While the development of the technology is being led by IOHK, the Cardano Foundation is responsible for promoting Cardano and supervising its development and EMURGO drives the commercial adoption.
How To Earn Cardano?
Can Cardano Be Mined?
The answer to the question is NO. Since Cardano is not part of the proof-of-work consensus, Cardano mining is impossible.
Although Cardano cannot be mined, Cardano can be staked.
The heart of any blockchain is the algorithm that is being used to create new blocks and validate transactions. In the case of Cardano, it uses a proof-of-stake protocol to create the blocks. The protocol was designed to reduce energy expenditure to a minimum during block production. Unlike the proof-of-work protocol which uses brute computing force, or hash power, the proof-of-stake protocol achieves this by eliminating the need for this massive need of computing power.
Therefore, to stake Cardano, all that needs to be done is to keep the Cardano in a Cardano wallet online, and in turn, receive a portion of your already owned Ada coins as a reward. This process of “Cardano mining” does not involve any cloud, GPU or CPU mining and requires no investment in costly mining equipment, and electricity.
The more Ada/Cardano coins are owned and staked, the more will be the rewards. But this will lead to the creation of stake pools and provide them with the economic incentive to grow and become too big which would defeat the goal of decentralization. To avoid this, Cardano stake pools are designed in a way that even the people that are part of smaller pools receive greater rewards. And to be secure, the Cardano network requires a large number of stakeholders/nodes to be online and be connected at all times. Thus, having a large number of small pools works to the benefit of both the network and the stakeholders.
Besides staking, another way of acquiring more Ada/Cardano is through a cryptocurrency exchange. A cryptocurrency exchange is an online platform that can act as an intermediary between buyers and sellers of a cryptocurrency. Some of the cryptocurrency exchanges are:
- Binance – Best overall and low fees
- Kraken – Best customer service
- Coinbase – Best for beginners
- Crypto.com – Best all-in-one platform
While a crypto exchange makes it possible to trade cryptocurrencies, a crypto wallet is used to store those currencies. A wallet can be a hardware device or software. One of the safest ways to store Ada is through one of these wallets:
- Daedalus Wallet
- Yoroi Wallet
- Atomic Wallet
Cardano which debuted with a market cap of $600 million in 2017 has since grown to become one of the top ten cryptos with a market cap of more than $50 billion. And a growing number of investors are increasingly bullish about the future of Cardano.
Though it was launched only in 2017 and the blockchain is still is in its infancy, there is a lot to like about this crypto. Cardano is quickly evolving and growing among the crowded crypto space. Today, there are more than 9000 altcoins and Cardano has managed to make a name for itself and has distinguished itself by taking a radical new scientific approach. This approach has provided it with an air of legitimacy that a lot of other cryptos lack. Investors feel confident that the technology underlying the blockchain network has been rigorously scrutinized. Cardano has a lot of potential. And the future of Cardano is bright.