Cardano (ADA) is a popular cryptocurrency known for its innovative technology and commitment to creating a more secure and sustainable blockchain. 

Launched in 2017, Cardano was developed by a team of engineers and academics to provide a platform for smart contracts and decentralized applications (dApps). 

Let’s look into what makes Cardano unique, its features, and how it stands out in the cryptocurrency.

What is Cardano (ADA)?

Cardano (ADA) is a type of cryptocurrency that operates on a system called Proof of Stake (PoS). It’s known as a “third-generation” blockchain because it aims to solve the common problems that older blockchains, like Bitcoin and Ethereum, face.

These problems often include slow transaction speeds and high fees, especially when the network gets busy.

Cardano is built on a strong foundation of scientific research and academic studies. Its development process involves a lot of peer-reviewed research, meaning experts check the ideas before they are implemented.

This careful approach helps ensure the platform is secure and reliable.

Stages In Cardano

Cardano’s development is organized into five main stages:

Phase 1 – Byron

This was the first stage when the Cardano network launched.

Think of this phase as opening a new shop. During Byron, people could start using ADA, the currency of Cardano, for the first time. 

They could send ADA to each other, which meant the basic function of transferring money was up and running.

Phase 2 – Shelley

The main goal of this phase was to make Cardano decentralized.

A decentralized network means that it is not controlled by just one group or company; many individuals can participate in running it. In Shelley, more people were encouraged to operate their nodes. 

Nodes are computers that help maintain the network. By having community-run nodes, Cardano became more secure and fair, allowing everyone to contribute to its operation.

Phase 3 – Goguen

This phase introduced smart contracts to Cardano.

Smart contracts are like digital agreements that automatically carry out actions when specific conditions are met. For instance, if someone pays for a service, the smart contract automatically delivers that service without needing someone to oversee the transaction. 

In Goguen, developers could create and use these smart contracts on Cardano, enabling more complex operations and applications to be built.

Phase 4 – Basho

In this phase, Cardano implemented sidechains.

Sidechains are additional pathways that connect to the main network. They help increase the network’s capacity, meaning Cardano can handle more transactions at the same time. 

This improvement allows Cardano to work better with other blockchains, enhancing its ability to interact with different cryptocurrency systems.

Phase 5 – Voltaire

This is the final phase of Cardano’s development.

In Voltaire, the focus will be on establishing a governance system. This means ADA holders (the people who own ADA) will be able to vote on important decisions regarding the network’s future. 

Cardano will set up a way to fund itself, allowing it to grow and improve continuously based on the needs and votes of its users.

When all phases are complete, Cardano will be fully decentralized, meaning the network will be run and governed by its users, and it will use a small part of transaction fees to support itself.

How Does Cardano Work?

Cardano is designed to improve upon the limitations of earlier blockchain generations. It aims to offer faster and cheaper transactions while maintaining security.

One of the key features of Cardano is its Proof of Stake (PoS) consensus protocol called Ouroboros. 

Unlike Bitcoin’s Proof of Work (PoW), which consumes a lot of energy, PoS is much more energy-efficient. This means Cardano can process transactions faster and with less environmental impact.

To further enhance its capabilities, Cardano is developing Hydra, a layer 2 solution that will allow for even more transactions as new nodes (computers) join the network. This is designed to provide nearly limitless scalability.

Another unique feature of Cardano is its Hard Fork Combinator, which allows the network to upgrade without interrupting its operations. This was successfully tested during the Shelley phase update.

Who Are the Founders of Cardano?

Cardano was founded by Charles Hoskinson, who was also a co-founder of Ethereum. He is currently the CEO of IOHK, the company developing Cardano.

Hoskinson became interested in cryptocurrencies in 2011 and started mining and trading. He created a popular educational course about Bitcoin in 2013, which attracted over 80,000 students. 

After contributing to Ethereum’s early development, he left to pursue his vision for a more advanced blockchain, leading to the creation of Cardano in 2015.

What Gives Cardano (ADA) Value?

ADA is the native token of the Cardano network, named after the mathematician Ada Lovelace. During its Initial Coin Offering (ICO), Cardano raised USD 62.2 million by selling 57.6% of its total ADA supply to investors.

ADA serves two main purposes: it acts as a digital currency for transactions on the Cardano network, similar to how Ether (ETH) is used on Ethereum. 

ADA holders have a stake in the network. They can join stake pools to earn rewards and will eventually help govern the network by voting on important decisions.

How Is the Cardano Network Secured?

Cardano’s security comes from its unique Proof of Stake (PoS) protocol called Ouroboros. This protocol combines advanced technology with proven methods to ensure the network is safe while using less energy than traditional systems like Bitcoin.

Ouroboros focuses on sustainable and ethical growth, with minimal environmental impact. It is designed to be more secure than Proof of Work (PoW) systems while consuming about four times less energy.

To encourage participation, Cardano has built-in incentives for users. Those who help maintain the network by validating transactions receive ADA as a reward.

How is Cardano Used?

The ADA token can be used like cash for transferring value. However, it also has additional features. 

One major function is staking, where users can lock up their ADA tokens to help verify transactions and earn rewards. This process keeps the network active and secure.

Moreover, ADA holders can participate in voting for governance decisions. Unlike other blockchain projects that rely on miners, the responsibility for the future direction of Cardano lies with its ADA stakes. 

When new proposals are made, these holders can vote using their tokens, contributing to a more decentralized system.

With the launch of the Goguen phase, ADA will also power smart contracts on the Cardano network. This will enable developers to create decentralized applications (dApps) that run on Cardano.

How to Choose a Cardano Wallet

Since Cardano (ADA) is a well-known cryptocurrency, it can be stored in various types of wallets, both software and hardware. 

Users should choose a wallet based on their personal needs and preferences.

For example, Kriptomat offers a secure way to store and trade ADA tokens easily. 

With Kriptomat, users can buy and sell ADA quickly and safely, making it a convenient option for those looking to manage their ADA holdings.

Conclusion

Cardano (ADA) is an innovative and carefully crafted cryptocurrency that aims to address the limitations of previous blockchain generations. 

With its scientific approach, commitment to sustainability, and unique features like Ouroboros and the Hard Fork Combinator, Cardano is well-positioned for growth and adoption in the blockchain space. 

Whether you are a developer or an investor, Cardano offers exciting possibilities for the future.