What Is Cardano? Introduction To Ada Cardano's Ada cryptocurrency can be used to send and receive digital cash assets. What Is Cardano? Cardano is a proof-of-stake cryptocurrency platform that facilitates secure digital payments. Cardano and the Ada token were created with the purposes of creating greater financial inclusion, adhering to regulation, and exploring “the social elements of commerce.” Cardano is the platform on which Ada functions. For the purpose of understanding the question “What is Cardano”, it helps to realize that the project is basically interchangeable with the Ada token. Ada is a cryptocurrency with a different infrastructure-level design than Bitcoin, Ethereum, and the rest of the cryptos the reader may be familiar with. Unlike “publicly owned” cryptocurrencies, where development is entirely voluntary and often unfunded, Cardano/Ada benefit from the presence of a fully-funded development team, Input Output Hong Kong (IOHK). IOHK CEO Charles Hoskinson (a co-founder of Ethereum) has said in multiple interviews that one of the problems Cardano seeks to address is the prevalence of engineers in academic and finance problems throughout the cryptocurrency world. As such, it can be said that Cardano seeks to use a science-based philosophical approach, where other cryptos might be accused of falling off into politicsduring development and other types of discussions. Like any cryptocurrency, Ada enables the user to seamlessly send value over the Internet in a secure and fast way. Here in the early months of its lifespan there is but one official wallet (where Bitcoin and others have several) called Daedalus.
13.88 Billion Left At Launch While that may sound like Elon Musk bidding goodbye to Earth on the first interstellar exploration, it’s actually the amount of Ada that are still to be staked in the future of the Cardano economy. Like many modern cryptocurrencies, Cardano was launched with the help of an Initial Coin Offering. More than 60% of the total Ada ever to be generated were allocated during this offering, leaving roughly 13.88 billion for future endeavors. Between January 2015 and September 2017, four tranches of pre-sale tokens were sold for an average price of $.0024 per Ada. On its first day being listed on Coinmarketcap.com (October 1st, 2017), Cardano’s price was nearly ten times this amount, $0.021. Of the Ada generated at the launch of the project, IOHK and other insiders received just under 6 billion. Due to the fee structure of Ada, however, the circulation of coins is sure to widen, since a minimum fee of more than .1 Ada is required to make a transaction.
Ada Is A Proof-of-Stake Cryptocurrency Unlike many of the major cryptocurrencies of the present, Ada offers the ability to stake coins — essentially the chance to earn interest on your holdings. While an interest bearing account is not a perfect analogy to a staking wallet, it hopefully communicates the idea: the more tokens you have, the more you can earn over time. Yet there is an important difference: Ada has a maximum total supply of 45 billion. This means the block reward will drop over time. More about this is explained in the Cardano Monetary Policy. Proof-of-Stake is a long-developed technical subject. To simplify it: instead of using proof-of-work, which is a reflection of the number of computational cycles dedicated to the same problem, proof-of-stake uses age of coins, number of coins, and other factors about a holder’s wallet. Proof-of-stake is about validation of new blocks and transactions, as opposed to mining of new blocks. Some form of proof is required in order to prevent false transactions and blocks from being published. It is a defining characteristic that sets cryptocurrency apart from fiat currency. What Is Ouroboros Proof? For Cardano, a new proof-of-stake algorithm called Ouroboros was designed. The fundamental difference between Ouroboros and Ethereum’s Casper or other similar algorithms is the manner in which recipients of block rewards (validators) are chosen. According to the Cardano project: For a blockchain to be secure, the means of selecting a stakeholder to make a block must be truly random. An innovation of Ouroboros to produce the randomness for the leader election process is to do this by way of a secure, multiparty implementation of a coin-flipping protocol. The name, by the way, symbolizes infinity, and is often depicted as a snake or dragon swallowing its tail. So now you know.
Beyond Ada – Multiple Tokens On One Platform Cardano has been called the “Next NEO” for the reason that it can play host to multiple tokens on its network, similar in nature to Ethereum, NEO, Universa, or NXT. With a host blockchain of less than one year at time of writing, no tokens besides Ada have yet been developed. Ada represents value attributed to the Cardano Settlement Layer. The fact that Cardano may be chosen as the blockchain for industrial tokens and financial products in the future is a motivating factor for speculators. It speaks to the reason that in just a few short months Cardano rose to one of the top cryptocurrencies by market capitalization ranking, having at time of writing a price of nearly 20 cents per Ada. Ada tokens are necessary to create transactions on the Cardano network, so the value of them will be attributable to the demand for such transactions. Ada itself may be dwarfed in value by the value of tokens developed by firms like Emurgo, a Japanese company which is dedicated to helping blockchain ventures launch on Cardano.
Democracy in Cardano We mentioned earlier that one of the defining features of Cardano is that it has a dedicated team of paid developers whose work was funded during the ICO. Another defining feature of Cardano is that users will be able to participate in decisions about how the protocol governs itself and operates. This is important and radically different from the process that other currencies use. “Hard forks” are possible in Bitcoin and if the majority of miners agree then the changes are implemented; however, “voting” in economic terms, that is, the amount of skin a person has in the game, is an alien concept in the Bitcoin world.
What Is Cardano? A Quick Ada Summary Cardano is a platform like Ethereum or NEO which allows for the creation of new tokens and decentralized applications. More than 60% of Ada tokens were allocated at the time of the Initial Coin Offering. Cardano was created, and is managed by, a firm called IOHK and is the brainchild of Charles Hoskinson, a co-founder of the Ethereum project. Importantly, Ada tokens will be required for later applications, therefore creating an inherent value in the same way that ETH has value, if nowhere else, in its ability to move other tokens around the Ethereum network. Cardano Ada token holders can earn more tokens by validating future blocks of transactions, receiving a mixture of block reward and a portion of network fees. Cardano holders are able to vote on protocol changes, creating a flexible future for the blockchain.