There are a ton of different cryptocurrencies to keep track of and pay attention to.
Yet out of the thousands that are available, Cardano (ADA) happens to be one we offer here on our platform at Coinberry. And for good reason.
It’s maintained its position in the Top 10 cryptocurrencies by market cap for a long time. It has a powerful community behind it. And the team behind the cryptocurrency are aiming to accomplish some very big things.
In this article, we’re going to talk about what Cardano is and why it just might be a cryptocurrency you want to pay attention to.
What is Cardano?
Cardano is a blockchain that is designed to facilitate the building of other decentralized applications. Think about an operating system like Windows. Windows facilitates many applications that are built on it. Building programs for word processing, video games, audio streaming, or social networking is possible. Windows was developed as more of an open system to facilitate others building on it.
Cardano is similar in that it’s similar to the Windows operating system, only it is fully decentralized. This means that different types of decentralized applications can be built on Cardano just like different applications can be built on Windows.
Why Is This Important?
Windows changed the world with their computing platform. By allowing other companies and software developers to build programs on their platform, Microsoft quickly dominated the personal computing space with affordable computers that had lots of programs. Think games, software, music, anything really.
While the landscape has shifted tremendously, with other operating systems at play, there are still 10’s of thousands of products and services that we can access at any given point in time on the Windows platform.
Cardano’s aim is to do something similar. Give users access to 10’s of thousands of distributed products and services. As the founder of ADA recently said to Business Insider:
Cardano’s cryptocurrency or token is called ADA.
Who Created Cardano and When Did It Come About?
Cardano was founded by Charles Hoskinson. He is known as one of the most experienced developers, influencers, and activists in the cryptocurrency industry.
About a decade ago, Hoskinson quit his software consulting job to pursue cryptocurrency full-time. It was here in his first venture, an online cryptocurrency education platform, where he met future Ethereum co-founder, Vitalik Buterin.
Yes, that’s correct. Hoskinson was one of the eight original members of Ethereum, and a co-founder of the project. His disagreements with Vitalik on the direction of Ethereum (commercial venture VS it’s current state as a non-profit venture) sparked a situation that caused Hoskinson to resign from the project.
After leaving Ethereum, Hoskinson created a company called IOHK (Input, Output, Hong Kong) with another former Ethereum developer. The largest project built on IOHK is Cardano, which was launched in 2017.
What Makes Cardano Different And Noteworthy?
In short, like other cryptocurrencies that were developed at the time, transaction processing speed was one of the reasons why Charles Hoskinson was inspired to create Cardano.
You see, Cardano uses a different algorithm than other cryptocurrencies like Bicoin and Ethereum. And it is this difference that allows Cardano to process transactions quickly.
Unlike Bitcoin and Ethereum, which use proof-of-work algorithms (think Bitcoin mining machines and computers), Cardano uses a proof-of-stake algorithm. This means that holders of the Cardano cryptocurrency (ADA) can stake their cryptocurrency as ‘proof’ of the blockchain’s validation. In both cases (proof-of-work, and proof-of-stake) the users who are helping facilitate the blockchain network and transactions get paid the transaction fees for doing so.
There are pros and cons to both, but one of the downsides of proof-of-work is that those who have money to buy the specialized computers in large quantities, end up dominating the network fees. Think Bitcoin mining companies that are publicly traded on the stock market.
As a quick comparison, anyone on the Cardano network who has 5 ADA can stake and start earning transaction fees.
Transactions per second
Additionally, for developers who are looking to build programs, it can be hard to build on a network where transactions per second tap out at 20-(TPS). This low transaction level limits the amount of creativity and scale in the applications that can be developed.
Cardano aimed to change that from the start with their algorithm and proof-of-stake system. Cardano ran a test in 2017 and the blockchain had reportedly processed 257-transactions per second (TPS), a 10x increase over the Ethereum blockchain, but still shy of VISA’s +1400 TPS capability.
Okay “sounds great”, but why should I care?
Because again, slower transaction speeds means the applications that are developed have far less scalability and because less TPS means that it’s more expensive to transact on that blockchain. As the network gets congested with requests you will have to pay more in fees to push your transaction to the front of the line and get processed as we’ve seen with Ethereum gas fees.
By using Cardano in comparison, you have the option of using a blockchain that’s quick, efficient, and doesn’t use as much to process transactions.
The result can be more scalable applications and less fees at the same time. This is what Cardano has been aiming for.
What’s the latest from Cardano?
Cardano successfully fulfilled the Alonzo hard fork (upgrade) recently. This marks the third phase of Cardano’s current roadmap, Gougen.
The significance of a hard fork (or upgrade) here is that now the Cardano blockchain has smart contract functionality, or the ability for others to build and program on their blockchain. If you remember our Windows analogy earlier in this article, it’s like giving developers the ability to see and use code to build their own programs on Windows.
In the first 24-hours of deploying this hard fork (or upgrade), the Cardano platform has seen more than one-hundred smart contracts run on the network, with its first decentralised application deployed.
Again, using our Windows analogy, smart contracts will now allow developers to program any of the same applications that we’ve seen programmed on the Ethereum blockchain – from exchanges, to games, to NFTs and more.
As Cardano continues on it’s roadmap, we will continue to keep you posted on ADA related news.
It consistently ranks as one of the top cryptocurrencies in the world on Coinmarketcap, and at the time of this writing has a market cap of $73-billion USD, and a price point of $2.30 USD (or approximately $3 CAD).
If you’re interested in investing, you have the option of purchasing Cardano here at Coinbery for low trading fees.
Check out our link to Cardano’s ADA cryptocurrency to stay up to date as prices are always changing.
Cardano (ADA) Resources
If you’re interested in learning more about Cardano (ADA), you can continue to read our educational series. We’ll be releasing more articles on this cryptocurrency, and covering various aspects of it.
Their social following alone is among the highest of any cryptocurrency in the world, with approximately 900K followers on Twitter alone. Anyone can join the Cardano worldwide community and interact with others about the platform.
Cardano (ADA) References
The websites, articles, and content that was used to make this article: