What is ADA

Cardano is a blockchain-based network whose native cryptocurrency is called ADA. This network can be used to make digital transactions, create smart contracts, and run decentralized applications. It can be said that Cardano is a rival to smart-contract-supporting blockchains like Ethereum, EOS, Polkadot, and so on. In this article, we are going to cover everything about Cardano and its coin, ADA. Stay with us.

What is Cardano?

Cardano is a popular blockchain that, like Ethereum, supports creating and running smart contracts. The big difference between Cardano and Ethereum is that Cardano is more scalable. Cardano calls itself “the third-generation blockchain”, and its security is provided through multi-layer design. Cardano claims that it’s much more efficient than older blockchains in terms of speed and security. It also claims to be the first blockchain that is developed after a long period of academic research and calls itself a blockchain based on a “scientific philosophy”.

As we mentioned earlier, Cardano supports smart contracts. This means that developers can use Cardano to run unstoppable decentralized applications. Another important feature of Cardano is its attention to regulatory issues. Cardano has tried to create a kind of balance between users’ privacy and regulatory issues. Because most of Cardano’s early developers and investors are Japanese and because of its similarities to Ethereum, Cardano is called the Japanese Ethereum.

Who created Cardano?

Cardano’s founder is Charles Hoskinson who was one of the early developers of Ethereum. He started working on Cardano in 2015 and spent two years researching Ethereum’s problems and blockchains’ challenges. Like many others, he found “the scalability issue” to be Ethereum’s main issue. Therefore, he thought of new processes for validating the transactions and creating the blocks. He differentiates his blockchain from Bitcoin as the first-generation blockchain and Ethereum as the second-generation blockchain. At the time of writing, 3 foundations and companies are working on the development of Cardano:

  • The Cardano Foundation
  • IOHK
  • Emurgo

Besides, tens of teams are working independently on Cardano’s open-source code to create decentralized applications. After two years of research, Cardano was officially launched on September 28, 2017. Its native coin called ADA was also released, and the Bittrex exchange was the first cryptocurrency exchange that listed it.

How does Cardano work?

We repeatedly mentioned that Cardano claims to be more scalable than older blockchains like Ethereum. But, where does this scalability come from? Cardano’s scalability lies in its unique proof-of-stake consensus algorithm called “Ouroboros”. This consensus algorithm divides time into smaller units called “Slot”. Each Slot is then divided into smaller parts called “Epoch”. Each Slot has a leader called “Slot Leader” or SL. This SL is chosen by ADA holders. Slot Leaders are responsible for validating the transactions recently added to the blockchain. Each Slot Leader can only create one block. If the Slot Leaders who are responsible for creating a block can’t do their responsibility correctly (for example because they are not online), they will lose the reward. One or more than one Slot can be free of transactions, but at least 50% of the transactions must be validated within each Epoch. Transactions validated by the Slot Leaders are then confirmed by the Input Endorsers. Input Endorses are ADA holders responsible for the execution of the protocol. Input Endorsers’ voting right is determined by the amount of ADA they hold.

Cardano is also equipped with a unique technology called “RINA” to provide scalability. RINA’s focus is on privacy, transparency, and scalability. It assures that by increasing the number of transactions to even thousands of transactions per second, the scalability remains unchanged. For achieving this goal, Cardano uses a two-layer foundation: Cardano Settlement Layer (CSL) and Cardano Computation Layer (CCL).

CSL is Cardano’s first layer and its aim is to use a proof-of-stake consensus algorithm for validating the transactions and creating the blocks. CCL is Cardano’s second layer and includes some data about the transactions. Although CSL and CCL work independently, developers can use CCL to set some rules that get executed on CSL. For example, they can CCL to create a ledger that excludes suspicious or unknown transactions.

The price history of ADA

ADA is a cryptocurrency with a hard cap of 45 million units. As we previously mentioned, it was first listed on the Bittrex exchange. At that time, the price of each ADA equaled 0.02 dollars. At the time of writing, each ADA is being traded at $0.49. ADA’s all-time high goes back to January 2018 when its price reached $1.22. This cryptocurrency has always been among the world’s most popular cryptocurrencies. At the time of writing, Cardano is the world’s seventh-largest cryptocurrency by market cap.

ADA’s wallets

Like all other cryptocurrencies, you need digital wallets to store ADA. Despite ADA’s popularity, the number of digital wallets supporting it is limited. ADA’s official wallet is Daedalus which can only be installed on personal computers. This wallet is secure and decentralized and is supported by Windows, MAC, and Linux. To use this wallet, you need to download the whole Cardano blockchain. You can download it from Cardano’s official website. There are some other wallets that can be used for storing ADA, including:

  • Ledger (hardware)
  • Trezor Model T (hardware)
  • Yoroi
  • Atomic

Conclusion

In this article, we tried to cover everything about Cardano, its aims, its technical details, its native cryptocurrency, its price history, and its wallets. You have figured out now that Cardano’s main goal is scalability. Scalability is exactly the issue considered Ethereum’s weak point. There is no doubt about Cardano’s popularity, but can it surpass Ethereum in popularity? Only time can tell.