To explain Cardano we need to cover a few basics. You’ve probably heard about Ethereum.
Ethereum’s core development team was composed of 5 bright minds with the most well known being Vitalik Buterin. At one point, the initial development team broke up and one of the members, Charles Hoskinson, went on to build another project that came to be known as Cardano.
The initial team had a major difference in opinion. On one side you had Vitalik, who wanted Ethereum to remain a non-profit project and on the other, Charles, who had an opposite point of view. Charles wanted Ethereum to begin accepting venture capital, thus turning the project into a for-profit company.
Charles Hoskinson created Cardano with a very simple set of goals. He wanted Cardano to provide a more sustainable and balanced ecosystem. The project was envisioned and built as a Proof-of-Stake cryptocurrency with the native token ADA.
From the beginning, Cardano aimed to differentiate itself from Ethereum and build its on Identity and alto it’s been compared to Litecoin, Ethereum and even Bitcoin, Hoskinson’s Cardano aim at solving 3 major problems of the crypto world: Scalability, Sustainability and Interoperability. Big words that definitely sound more complicated that they have to, but an ambitious goal nonetheless.
Scalability is generally viewed as the biggest problem that all Crypto faces. To simplify it, it references the inability of Blockchain to keep up with the growing user base in the context of speed of transactions. For example, as we’ve underlined before, Cryptocurrency is used for online commerce where it lacks scalability. The main competition for Crypto in the Fiat system is fiat-card-payment systems like Visa. Visa can process up to 1700 transactions per second with very little lag or delay. Ethereum, the second biggest cryptocurrency can achieve no more than 15 transactions per second, so you can clearly see the need for better scalability across the Crypto space.
This is where Cardano comes in. Cardano aims to address and solve this problem. The plan is: the more users transacting over Cardano, the faster the transactions will be. Pretty bold, isn’t it? But how can they achieve it?
Well, as mentioned earlier, Cardano works on a Proof-of-Stake consensus algorithm. The Cardano network has validators, individuals or organizations that confirm transactions occurring on the blockchain but how do they solve scalability with PoS when so many others couldn’t. Well they apply the Ouroboros system. A special system made up of Epochs ( 1 Epoch= 5 days) and slots (1 second intervals). Each sloth has a slot leader, selected out of all the validators. The Ouroboros system allows this process to occur constantly where each leader is collectively chosen to confirm each next transaction on a random basis. We aim to keep it simple so let’s just say this: Oroboros helps Cardano be a much more secure blockchain than your traditional Proof-of-Stake blockchain which in turn allows for a rise in scalability.
Sustainability is lacking in many Crypto projects. They might require too much energy to work or their longevity might be compromised. In terms of Cardano, Sustainability means two things:
How Eco-Friendly a project is?
How likely is it to prosper and maintain its functionality long term?
To tackle Ecology first, Cardano’s Proof-of-Stake consensus algorithm allows it to be very eco-friendly, a lot more than Cryptocurrencies such as Bitcoin or Ethereum. While it is still developing, Cardano is miles ahead of the two coins mentioned above when it comes to energy preservation and ecology concerns.
In terms of Sustainability, the longevity of Cardano’s project looks even better. Cardano has a dedicated treasury that is constantly being filled up by transaction fees and then those fees are paid out in the form of reward to anyone who makes a meaningful impact on the ecosystem. These entities can be scientists, developers or anyone able to make Cardano better. Additionally, Cardano is very invested in science and long-term planning which means that any attempt at introducing change to the Cardano ecosystem will be peer-reviewed and evaluated to the highest standard by other blockchain professionals. Recently Charles Hoskinson partnered with another Ethereum co-founder by the name of Jeremy Wood. They established a new company called IOHK or Input Output Hong Kong that aims to build Blockchain solutions for both private and public sectors on the Cardano blockchain. All of this indicates that Cardano is already a well-established project with many backers, companies supporting it and serious plans for the future. The founder himself, Charles Hoskinson is regularly streaming on his Youtube channel( link to channel) where he addresses the community and answers questions on all things Cardano.
Interoperability is a complicated term that represents an issue that all blockchains today are facing. The issue at hand is communication or the lack thereof. Different blockchains need to communicate with each other if they are to grow together in the same space. If a blockchain lacks Interoperability that means it doesn’t have any cross-chain functionality and it can only interact with its own native apps which in turn limits its growth, longevity and scalability.
Cardano solves this problem by applying another tech solution called KMZ sidechains protocol. It plays the role of a bridge between two different blockchains allowing them to communicate thus allowing ADA to be exchanged for any other cryptocurrency.
Cardano truly is a special project based on what we detailed above but what does the future hold for it, and is it supported by its community?
Cardano’s community is one of the strongest but can also be viewed as a two-edged sword. On one hand, having a lot of loyal community members shows that a project is strong but on the other hand, some critics view Cardano’s community as a cult to Charles Hoskinson's ideas, pointing out the slow roll-out of new updates and the general approach to throwing out big ideas without developing them any further. Whatever the case may be, we believe that Cardano is a strong project with a bright future and a lot of talented developers working on it. It may have some struggles, but that is also true for all other Blockchain projects that you might decide to analyze. Cardano believes that the Crypto space should not be divided into different projects, but a space where tech solutions can grow together.
What is Cardano?
