What is Cardano?

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By Bitpanda

Cardano is a Proof-of-Stake (PoS) blockchain platform being developed into a decentralised application (DApp) development platform with a multi-asset ledger and verifiable smart contracts.

  • Launched in 2017, Cardano’s goal is to offer scalable and secure solutions that bring blockchain technology to the masses. 

  • With similar use cases and high transactions per second (TPS), Cardano is a competitor to the popular Ethereum network.

  • Cardano’s Ouroboros is the first blockchain to utilise peer-reviewed research, working collaboratively with academics to navigate the platform’s future developments.

  • ADA, the native token of the network, is used for staking and running the Cardano platform.

  • The Cardano price reached its all-time high on Sep 2, 2021, at €3.05

What is Cardano?

Launched in 2017, Cardano is a Proof-of-Stake (PoS) blockchain platform with the core vision of establishing a network that can overcome the main challenges of blockchain technology: scalability, interoperability and sustainability.

According to founder Charles Hoskinson, who is also the co-founder of Ethereum, Cardano can “[...] provide economic identity to the billions who lack it by providing decentralised applications to manage identity, value, and governance.”

ADA, the network’s pre-mined native token, was launched together with the Cardano network in 2017. The total supply of ADA tokens is 45 billion. The name ADA comes from the first recognised computer programmer from the end of the 19th century, Ada Lovelace, daughter of the poet Lord Byron. 

What are the differences between Cardano and Ethereum?

Cardano is often compared to Ethereum and with good cause, as the former was developed by Charles Hoskinson, who is one of the co-founders of Ethereum. While there are some surface-level similarities, there are several significant differences that distinguish the two giants from each other, which was Cardano’s goal from the outset. Let’s take a look at these differences in more detail: 

  • Blockchain processes: The Ethereum mainnet currently uses a Proof-of-Work (PoW) consensus algorithm, while Cardano opts for the Proof-of-Stake (PoS) concept. However, the Ethereum Merge will bring the PoS algorithm to its network. 

  • Transaction speed and gas fees:  Cardano seems to have an edge over Ethereum as it is able to process transactions significantly faster than its rival, doing so with lower fees overall. 

  • Environmental impact and sustainability: Cardano’s Ouroboros PoS protocol is currently much more energy-efficient than Ethereum and allows them “to securely, sustainably, and ethically scale, with up to four million times the energy efficiency of bitcoin.”  

How does Cardano work?

Cardano’s Ouroboros PoS consensus algorithm aims to provide a scalable, secure and environmentally friendly, decentralised financial system (DeFi) that is capable of running its own decentralised applications and can therefore be applied to various aspects of everyday life. According to Cardano’s website, “Ouroboros is the first peer-reviewed, verifiably secure blockchain protocol… [that] enables the Cardano network’s decentralization, and allows it to sustainably scale to global requirements without, crucially, compromising security.” 

Utilising a unique blockchain design, Cardano has two layers: the Cardano Settlement Layer (CSL), which is where peer-to-peer transactions happen, and the Cardano Computational Layer (CCL), which is a test space for decentralised applications and is responsible for the security of the Cardano blockchain.

The roadmap of Cardano is divided into 6 time horizons, each of which has its own mainnet and is forked from the others. They are named after various scientists, poets, and philosophers.

  1. Byron is the first Cardano mainnet, named after Lord Byron, a 19th century poet. It began with the launch of Cardano in 2017 and enabled users to buy and sell ADA, Cardano’s native token. It also introduced the ADA wallets Daedalus and Yoroi.

  2. Shelley, named after a British poet Percy Shelley, followed and closed the Byron era in July 2020. The hard fork brought staking and more decentralisation to the Cardano network. This is the most recently completed phase of the roadmap.

  3. Goguen, the current phase of Cardano, named after the American computer scientist Joseph Goguen, includes the next big step: the Cardano network will be able to run smart contracts.

  4. Basho, named after the Japanese poet Matsuo Basho, will be the era where Cardano achieves its final form. Sidechains & compatibility with other blockchains like Ethereum will make Cardano a truly scalable network.

  5. Voltaire, named after the famous French thinker and writer, allows ADA holders to vote and decide the future of the Cardano network, hence this is called the “governance” era.

How to buy Cardano?

You can buy Cardano through cryptocurrency exchanges like Bitpanda using fiat currencies, e.g. euros or U.S. dollars. It’s a good idea to first get familiar with the Cardano price history and the current exchange rate. Once purchased, your Cardano investment can be viewed and accessed in a digital wallet that acts similarly to a banking app. You then have the option to hold on to your ADA or sell it again via the exchange.

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