With incredible success this year, the cryptocurrency has reached a new all-time high and moved into the top 3 biggest cryptocurrencies based on market cap. Sitting just behind Ethereum, the second biggest crypto, Cardano has amassed an impressive market cap and consistent 24-hour trading volume. As we explore what Cardano is we’ll take a look at what it stands for and what’s behind its striking rise in the ranks.
What Is Cardano (ADA)?
Cardano (ADA) was founded by one of the original Ethereum co-founders, Charles Hoskinson. Soon after leaving Ethereum, Hoskinson announced his plans for the new project, and two years later Cardano officially went live. Welcomed with open arms and wide interest, this open-source, decentralized network launched with a market cap of $600 million which quickly grew to $10 billion in just three months.
Cardano is a blockchain network that allows developers to create and manage their own decentralized applications and smart contracts. Designed for the modern world’s “changemakers, innovators and visionaries,” Cardano is looking to bring about global change through advanced technologies.
Hoskinson describes Cardano as a third-generation blockchain platform, designed to improve on the shortcomings of the first (Bitcoin) and second (Ethereum) generations before it.
The platform is one of the biggest and most successful platforms operating on a proof-of-stake consensus model, a more sustainable and less energy-intensive option when compared to the proof-of-work mechanism (used by Bitcoin and many other cryptocurrencies).
Proof-of-stake, also referred to as PoS, works on a different validation process that relies on the number of coins a validator has staked in the network instead of being the fastest to complete a complex cryptographic puzzle.
Cardano’s particular PoS model is called Ouroboros and claims to be 4x more energy efficient than traditional PoW blockchain platforms, without compromising on security. The platform describes Ouroboros as being a combination of mathematically verified mechanisms, unique technology, economic philosophy and behavioural psychology, with a defining goal to drive sustainable and ethical growth.
What Sets Cardano Apart?
One thing that is unique to Cardano is that the network did not release a whitepaper. Instead, the platform relies on extensive academic research and peer-reviewed papers. Through a systematic approach, the team conducts large-scale blockchain research and development, with all upgrades rigorously reviewed before being implemented.
Another unique feature that Cardano implements is that their roadmap is broken down into “eras”, with each era being worked on at the same time. Typically, a blockchain platform will implement an upgrade, and then start working on the next one (as is the case with ETH 2.0).
Cardano has outlined the five eras on their roadmap ahead, each with their own reference to a historical figure, as the following:
- Byron (implementation of the network's primary architecture and functionality)
- Shelley (implementation of a higher degree of decentralization, delegation and incentivization)
- Goguen (implementation of smart contracts and a multi-currency ledger)
- Basho (centred around increasing scalability and implementing interoperable sidechains)
- Voltaire (the final era that will put the community in full control of the autonomous, decentralized network)
The platform currently has three organisations working on the development of the network. Firstly, the Cardano Foundation is responsible for securing and promoting the Cardano protocol and monitoring the tokenomics of ADA. The second is blockchain research and development firm IOHK (Inside Out Hong Kong, a company founded by Hoskinson and former Ethereum colleague Jerry Wood) and its sister company, Emurgo, a global blockchain solutions platform.
IOHK handles the technological side (“leveraging peer-to-peer innovations to provide financial services”) while Emurgo handles the commercial and venture capital aspect.
All parties are committed and focused on building a secure, scalable and efficient decentralized blockchain network that will pioneer a positive global change.
What Does ADA Do?
The native token to the Cardano platform is ADA. The cryptocurrency holds both internal and external functionalities, with the latter being a digital payment system. The internal operations of ADA include staking, gas fees and holding governance rights. Holders staking ADA can become validators, as per the PoS consensus mechanism.
The maximum supply of ADA is 45 billion, of which over 70% have already entered circulation. 57% of the total supply was distributed to investors during its successful ICO (which consisted of five rounds of public sales from 2015 to 2017) and raised $62 million.
Where Do Cardano And ADA Come From?
With most cryptocurrencies being abbreviations of the network, Cardano and ADA certainly stand out. The platform was named after Gerolamo Cardano, the influential 16th-century Italian polymath who made a large contribution to the foundation of probability. Cardano is credited with being a mathematician, physician, chemist and astrologer, among many other things.
ADA on the other hand is named after Lady Ada Lovelace, an English mathematician from the 19th century who is widely considered to be the world’s first computer programmer. The developmental era Byron (mentioned above) is named after her father Lord Byron, a poet. Interestingly enough, both Lovelace and Cardano are credited with being avid gamblers.
The Future Of Cardano
With incredible success this year, ADA has already increased by over 1,600%, the network has also seen a wide increase in the number of developers flocking to use the platform as Cardano regularly gets compared to Ethereum. Cardano (ADA) is here to stay and is definitely a top altcoin to keep your eye on this year, and potentially the many more ahead.