What is Cardano (ADA)?
Cardano describes itself as a decentralised blockchain platform for "changemakers, innovators, and visionaries".
The platform allows developers to discover builder tools for developing a wide range distribution of decentralised applications (dApps), create new crypto tokens, and "bring about positive global change".
Users who stake their ADA tokens help validate transactions while adding security to the Cardano blockchain to earn rewards.
- Cardano is a blockchain platform that utilises the Ouroboros Proof-of-Stake (PoS) consensus algorithm.
- ADA is the native token of Cardano and can be staked to earn rewards.
- Cardano is the first peer-reviewed blockchain project that got the backing of blockchain and cryptographic experts from top universities.
- Cardano oversight relies on its three organisational structures (Cardano Foundation, IOG - Input Output Global, and Emurgo).
As you can see, it is not in vain that Cardano is referred to as the first peer-reviewed blockchain that provides unparalleled decentralisation.
Who created Cardano?
Charles Hoskinson, one of Ethereum's former co-founders, first released Cardano in September 2017. He is an American entrepreneur who pursued analytic number theory at the University of Colorado Boulder and the Metropolitan State University of Denver before going into cryptography through industry exposure.
As part of his professional experience, he helped establish three cryptocurrency-related start-ups: Ethereum, Invictus Innovations, and IOG. Besides that, he has held various posts within the private and public sectors.
According to the IOG website, Hoskinson was the founding chairman of the Bitcoin Foundation's education committee. He helped create the Cryptocurrency Research Group in 2013.
Hoskinson is also a crypto enthusiast whose current interest is in educating people about cryptocurrency and making cryptographic tools easier for mainstream use. He is a visionary front-runner who leads Cardano's research, design, and development sector.
Hoskinson's value proposition for Cardano is to create an open platform and a more balanced and sustainable ecosystem.
With his mathematics background, Hoskinson anticipates that the platform should be capable of providing economic identity to billions of people who lack it through decentralised applications to manage identity, value, and governance.
Hoskinson began to propose a course that led to the existence of Cardano today.
What is ADA?
ADA is the native coin that powers the Cardano blockchain, similar to how ETH fuels the Ethereum network. It got its name after a 19th-century mathematician, Ada Lovelace, recognised as the world's first computer programmer.
What is ADA used for?
ADA is the fuel that helps keep the blockchain's staking protocol running. Those who agree to stake their ADA tokens, in effect, support Cardano's network security and stability maintenance. They are rewarded with additional ADA tokens for staking their ADA tokens.
ADA holders can contribute to how the blockchain can further be developed. This is unlike other blockchain projects where only miners can vote and decide on changes.
Additionally, ADA holders can use their tokens to vote for or against a proposal when there's a need for a new change or development. Thereby, they can have a say and become a part of the blockchain's development.
How is ADA produced?
Unlike Bitcoin, which is mined, Cardano's ADA is produced through validators. The network chooses validators depending on their ADA token holdings. And once the validators are selected, they place a prediction based on how confident they are to verify all the transactions.
A successful blockchain verification on their verified transaction indicates that they win the bet and are rewarded in ADA tokens for their efforts.
How Does Cardano Work?
The Cardano network uses a unique 2-layer proof-of-stake (PoS) consensus mechanism called the Ouroboros.
Ouroboros is Cardano's defining algorithm. The protocol sits behind Cardano's capability as a decentralised proof-of-stake platform. It helps keep the network secure, validates transactions, and generates newly minted ADA tokens.
The Ouroboros algorithm splits transactions into epochs, which are further subdivided into time slots. A slot leader is designated for each time slot and is responsible for adding a block to the chain.
After that, a new slot leader is needed to verify the last few blocks of the chain received as transient. This phenomenon is called the "settlement delay," and it is the mechanism that allows the ledger to be securely passed between the participants.
Cardano also uses a 2-layer blockchain architecture. It is the perfect solution for speed, and scaling issues usually encountered in other blockchains. The two main layers are as follows:
- The Cardano Settlement Layer (CSL): The base layer of the blockchain that records all transactions, including the transfer of ADA between users.
- The Cardano Computation Layer (CCL): This layer distributes smart contracts that developers can leverage on to move funds. It also serves as the chain's security framework, ensuring the network's goals are met.
Cardano's three-part organisational structure
Cardano’s organisation structure has three parts - the Cardano foundation, Input-Output Hong Kong, and Emurgo.
The primary role of this foundation is to collaborate with policymakers, government officials, and countries to push innovative technology. The foundation also supports the blockchain community's positive development and those interested in the Cardano project.
Input-Output Global (IOG)
The IOG is a technology and engineering company behind the Cardano blockchain platform. It houses top engineers who continuously seek to develop smart contracts and research infrastructure for government entities, academic institutions, and enterprises.
Is a Japanese company that actively supports innovative companies, businesses, and start-ups, including Cardano
What makes Cardano unique?
Cardano's features are unique and promising. Let us consider some of them.
No staking or slashing
Cardano staking doesn't require any locking (ADA stays fully liquid) and there is no slashing.
Cardano's goal is to create the most environmentally sustainable blockchain platform. This would require using a unique proof-of-stake (PoS) consensus mechanism instead of running on a single-layer, energy-consuming proof-of-work (PoW) system currently used by Bitcoin.
The PoS consensus implemented on Cardano's platform is the key to sustainability.
Cardano's multi-layered platform structure is solving the long-lasting issue faced by popular cryptocurrencies like Bitcoin and Ethereum. The Ouroboros algorithm makes it possible to process millions of transactions per second, eliminating potential bottlenecks.
Like Bitcoin, Cardano has a limited token supply, totaling 45 billion. So, 45,000,000,000 ADA = 45,000,000,000,000,000 lovelaces while 21,000,000 BTC = 21,000,000,00000000 satoshis.
The Cardano whitepaper is one of its kind. It is the first peer-reviewed blockchain paper to be reviewed and published by academic experts and scholars within the blockchain and cryptography field.
This makes it an innovative project that aims at preventing future issues related to blockchain.
ADA Token Distribution
The ADA token has a maximum supply of 45 billion, with a total current circulation supply of 34,277,702,082 (about 75%). There hasn't been any ADA token burn event, and there's no indication it will occur any time yet.
The token held five rounds of public sales between September 2015 and January 2017, with a pre-launch price of $0.0024.
After its launch, about 2.5 billion ADA tokens were allotted to IOG. At the same time, an additional supply of 2.1 billion went into the Emurgo wallet, and 648 million ADA was earmarked to the Cardano Foundation to promote the platform and increase the level of adoption.
Overall, about 84% of the total supply was distributed among investors, while about 16% went to the project's founders.
How to buy ADA?
We have covered enough of the basics on Cardano and the ADA token. And if you’re wondering how you can buy ADA, all you need to do is follow these simple steps:
- Step 1: Download and install the SwissBorg app.
- Step 2: Set up your SwissBorg account. A detailed tutorial is available on the Opening an Account page of the SwissBorg Help Centre.
- Step 3: Transfer fiat or crypto funds into your SwissBorg account.
- Step 4: Find the Marketplace section of the SwissBorg app.
- Step 5: Search for the token by simply typing "ADA" into our search feature. You can find the feature by looking for a magnifying glass icon in the top-left corner of the screen.
- Step 6: Tap on "Deposit," pick the fiat or cryptocurrency you want to use for the purchase, enter the amount you wish to spend, and tap "Next."
- Step 7: Finally, tap on "Confirm exchange," and you are done.
If you want to buy crypto assets other than ADA on the SwissBorg app, follow the same steps.
Putting it all together
The Cardano platform is built with the future in mind. It uses a unique system algorithm to tackle significant issues such as high energy consumption experienced on other blockchains.
Like what you read about Cardano? You can buy Cardano's ADA token today using the SwissBorg app!