Cardano is one of many smart contracts-driven blockchains and shares a lot of similarities with its peers, like the use of the proof-of-stake, the ability to operate smart contracts and decentralized applications, the high speed, the low costs, and so on.
But there are many things also that set Cardano apart from the others and make it worth the attention of blockchain technology enthusiasts.
Cardano was founded in 2017 by Charles Hoskinson, co-founder of Ethereum, and Jeremy Wood. From its early days, Cardano emphasized the importance of research-driven development and kept its commitment to peer-reviewed academic research. This means that any code being deployed is verified mathematically by other academics.
Other than the academic commitment, some of Cardano’s fundamentals in terms of blockchain structure, leadership, and governance set it apart from other seemingly similar projects.
Layered blockchain
The Cardano blockchain is built in a way that prevents some functions from affecting the speed of others. It’s basically divided into two layers:
The Cardano Settlement Layer (CSL):This layer is responsible for the transfer ofADAtokens between accounts and recording transactions.
The Cardano Computation Layer (CCL):This layer contains the smart contracts used by developers for moving the funds automatically.
Those wishing to run a Cardano node have three types of nodes they can choose from: mCore nodes that stake ADA and participate in blockchain’s governance, Relay nodes, that take on the responsibility of moving the data between mCore nodes and the public internet, and Edge nodes, that create cryptocurrency transactions.
Ouroboros
Cardano uses a unique variation of the proof-of-stakeconsensus mechanism, named “Ouroboros”, the name of the ancient unity symbol of a dragon or a snake eating its own tail. This mechanism divides time into ‘epochs’ and ‘slots’, with each epoch containing a couple of 20-second slots.
Within each slot, an mCore leader node is chosen randomly to decide which blocks to be added to the blockchain. These include genesis blocks that list the epoch’s slots leaders and main blocks that include the transaction, proposals, and voting information. Once an epoch is over, the last slot leaders elect slot leaders for the next epoch.
In terms of the main way of work, Ouroboros can be considered a delegated proof-of-stake (DPoS).
Distributed Leadership
Unlike most crypto projects, Cardano is not being maintained by one organization, but three, with each of them taking on different roles. First of these three is the Cardano Foundation, which is a Switzerland-based non-profit organization responsible for supervising the developing and upgrading the blockchain.
The second one is IOHK (or Input Output Hong Kong), which is co-founded by the same co-founders of Cardano. It’s a research and software company that engineered the Ouroboros mechanism and works on developing blockchains other than Cardano.
Last is Emurgo, which is the company responsible for encouraging companies and individuals to use Cardano’s technology. All three entities are autonomous and work independently from each other.
FAQs
Cardano's goal is to be the most environmentally sustainable blockchain platform. It uses a unique proof-of-stake consensus mechanism called Ouroboros, as opposed to the energy-intensive proof-of-work system currently used by Bitcoin.
What is so special about Cardano? ›
Cardano is also much faster at processing transactions than Bitcoin or Ethereum 1.0, which is sometimes referred to as Classic Ethereum. Cardano can process more than 250 transactions per second (TPS), compared with around 4.6 TPS for bitcoin and between 15 and 45 TPS for Ethereum 1.0.
What is Cardano capable of? ›
Cardano is Supported by its Developers and Community.
With this hard fork, the Cardano Mainnet gained smart contract functionality, giving it the ability to support dApps, DeFi (decentralized finance) applications, and NFTs (non-fungible tokens).
What makes Cardano better than Ethereum? ›
Cardano employs a proof-of-stake consensus mechanism called Ouroboros, which aims to be more energy-efficient compared to Ethereum's current proof-of-work system. The implementation of Ouroboros ensures that transactions on the Cardano blockchain are validated by participants who hold a stake in the network.
What is special about ADA? ›
The ADA prohibits discrimination based on disability. Under the ADA, it is illegal to discriminate against someone because of their disability. For example, a fitness center could not exclude a person who uses a wheelchair from a workout class because they cannot do all of the exercises in the same way.
Does Cardano have a future? ›
According to your price prediction input for Cardano, the value of ADA may increase by +5% and reach $ 0.625748 by 2030.
What are the downsides of Cardano? ›
Cons: High volatility: Cryptocurrencies can be highly volatile, and Cardano is no exception. This can make it challenging for investors to predict the short-term value of ADA. Competition: Cardano faces competition from other cryptocurrencies, such as Ethereum, which could impact its long-term growth potential.
What problems does Cardano solve? ›
Lack of transparency coupled with rising inequality worsens common man's access to capital and credit. Cardano can empower individuals and groups by giving a digital identity solution through Atala Prism that enables access to capital and ownership.
What are the weaknesses of Cardano? ›
Cardano Weaknesses
In a worst-case scenario, the separation of the settlement and computational layers could be leveraged to enable censorship or social engineering attacks.
Why is Cardano not a good investment? ›
Like any investment, Cardano carries both risks and rewards, given the high volatility and susceptibility to market fluctuations.
DeFi Ecosystem Comparison
Accordingly, Solana indicates over $1.6 billion in total value locked – vastly higher than Cardano's DeFi ecosystem currently and indicating far greater liquidity and adoption between developers and users at this juncture.
What is the competitive advantage of Cardano? ›
One of Cardano's most significant technological advantages is its use of the Proof-of-Stake consensus mechanism. Unlike the Proof-of-Work consensus mechanism, which requires more computing power, the PoS mechanism relies on user input to validate transactions.
Why ADA is the best crypto? ›
Expert Insight on Cardano Potential
A well-known veteran analyst, Gert van Lagen, recommends Cardano based on his analysis. He prefers ADA over coins like Solana and Ethereum because of its strong fundamentals. He believes ADA is more decentralized and doesn't rely on big central players' support, making it stand out.
Why did people want the ADA? ›
The underlying principle of the ADA was to extend the basic civil rights protections extended to minorities and women to people with disabilities.
What has the ADA been successful in? ›
The Division has made protecting the rights of people with disabilities a top priority by enforcing the Americans with Disabilities Act (ADA), the historic law prohibiting discrimination on the basis of disability in more than seven million places of public accommodation nationwide - including hotels, restaurants, ...
Is Cardano worth having? ›
Cardano is definitely one of those projects that have incredible potential outside of being an asset that gets traded for profit. Built on peer-reviewed academic research, Cardano has brought together a strong community over the years.
Why do people buy Cardano? ›
Cardano is a blockchain that supports smart contracts, can be staked to earn hom*ore coins while you validate transactions and secure the network, and it's massively scalable.
