Top Things You Should Know About Cardano (ADA)

Top Things You Should Know About Cardano (ADA)

By MuyAsk | Crypto Truth Lexicon | 15 Apr 2020


Hey guys :) I’m back with yet another comprehensive list of questions and answers, this time for the popular and highly anticipated decentralized blockchain and smart contract platform – Cardano (ADA)

This piece lays everything out on the line so that you can fully understand what Cardano is and how the project is progressing. It’s very similar to my latest articles on Tezos (XTZ), Monero (XMR), and Litecoin (LTC)

If you haven’t already seen those ones, be sure to check them out as well.

Hope you enjoy!

The list of Q&A is pretty long so first comes the list of questions that I have prepared the answers to:

  1. What is Cardano?
  2. Who and When Created Cardano?
  3. How is Cardano different from Ethereum?
  4. What are Cardano (ADA) Coin Use Cases?
  5. What is IOHK?
  6. What is The Cardano Foundation?
  7. What role does Emurgo play in the Cardano Ecosystem?
  8. How is Cardano Roadmap Structured?
  9. Can you stake Cardano (ADA)? 
  10. Where to store Cardano (ADA)
  11. Where to buy Cardano (ADA)

1. What is Cardano?

3143414223-df9780f122e81b712de183c6f892aed17a21f5eee5cbdea39dc0dd2fe2c45679.jpeg

Cardano website homepage

Cardano is a public blockchain platform and cryptocurrency project that is fully open-source and decentralized. The goal of Cardano is to develop a robust smart contract platform that delivers more advanced features than any protocol previously developed. 

It’s attempting to do this by taking a scientific philosophy and research-first driven approach to developing its blockchain platform and smart contract protocol. In doing this, Cardano has evolved much slower than its smart contract platform counterparts, like Ethereum, in hopes to get things right off the bat. 

For instance, the Cardano protocol is being developed with the most rigorous academic and commercial software standards in the industry and features a layered blockchain software stack that is flexible, scalable, and robust.

That said, Cardano aims to be a next-generation blockchain and cryptocurrency that solves five blockchain elements being:

  • Scalability
  • Interoperability
  • Sustainability
  • Governance
  • Regulation

2. Who and When Created Cardano?

3143414223-a50db94676af73d07404d178015f7113349a53302bffc74004547772e392bdd2.jpeg

Cardano founder, Charles Hoskinson

The Cardano blockchain project began in 2015 and was conceptualized and founded by Charles Hoskinson, a Colorado-based technology entrepreneur, and mathematician. 

Prior to creating Cardano, Hoskinson was deeply involved in the cryptocurrency sector. He co-founded Ethereum, he was the founding chairman of the Bitcoin Foundation’s education committee, and he established the Cryptocurrency Research Group in 2013.

That said, Hoskinson is a cryptocurrency evangelist who values decentralization and is committed to bringing cryptocurrency and blockchain technology mainstream through education, research, and implementation.

In 2015, Charles Hoskinson and tech entrepreneur Jeremy Wood founded Input Output Hong Kong (IOHK), a blockchain technology innovations company to build out the Cardano protocol. 

Today, IOHK is one of three organizations that work full time to develop and take care of Cardano.

The three organizations developing Cardano are:

(More on these organizations and the roles they play later)

Cardano (ADA) ICO, Distribution, and Launch

Cardano’s native cryptocurrency ADA was issued into existence with a maximum supply of 45,000,000,000 ADA and a total supply of 31,112,484,646 ADA.

57.6% of the total supply of ADA tokens was distributed through an initial coin offering (ICO) that started on October 1, 2016, and ended on January 1, 2017. 

The sale consisted of 25,927,070,538 ADA tokens (57.6% of the total ADA supply) being sold with an ICO token price of 1 ADA = $0.00240 USD. 

Cardano met its fundraising goal of $62,200,000 USD on January 1, 2017.

As for the remaining ADA tokens, they were distributed to three groups of entities that are part of the Cardano ecosystem and Technical and Business Development Pool; IOHK, Emurgo, and the Cardano Foundation. 

The ADA distribution for these entities is as follows:

  • Cardano Foundation: 648,176,7613 ADA
  • IOHK: 2,463,071,701 ADA
  • Emurgo: 2,074,165,644 ADA

Following the ADA token sale, Cardano launched its mainnet and first major release, named Byron, on September 29, 2017. 

3. How is Cardano different from Ethereum?

3143414223-da5434c64b42bfb06e5b197a8183137775412183fb2a3fa4bdcc98d2856eacf7.png3143414223-f5788f59b657509b982e5884a806907dd06a480a0a06a5c8b1161483c5cadfbd.png

Cardano logo & Ethereum logo

Important Cardano and Ethereum differences include:

  • Consensus mechanism
  • Transactions per second (TPS) / Throughput
  • Current Market Value
  • Programming language
  • Development Speed

Consensus Mechanism
A consensus mechanism determines how a blockchain achieves consensus (how the blockchain comes to an agreement on a single data value or single state of the network). In other words, the consensus mechanism is how we can trust that a transaction is valid.

Both Ethereum and Cardano have decentralized blockchains, meaning they achieve consensus without a centralized third-party. However, the way they achieve consensus is different. 

In Ethereum, consensus is achieved through a mechanism called “Proof of Work” (PoW), which is the same model that Bitcoin uses. PoW requires energy-intensive computer miners to solve cryptographic equations before reaching consensus. PoW is proven to be a decentralized and secure consensus mechanism.

In Cardano, consensus is achieved through a mechanism called “Proof of Stake” (PoS), which it calls “Ouroboros”. In this system, computer miners are not required to solve mathematical equations. Instead, network participants stake (lock-up) ADA to secure the network and earn rewards for doing so. 

Transactions per Second (TPS) / Throughput
As Ethereum stands today (April 13, 2020), it can handle around 15 transactions per second with each transaction taking about 16 seconds. Ethereum’s throughput is expected to increase dramatically with Ethereum’s transition to PoS in Ethereum 2.0. 

As Cardano stands today (April 13, 2020), it can handle around 250 transactions per second with each transaction taking about 20 seconds. Cardano’s throughput will also increase dramatically with the implementation of Cardano side chains in the future. 

Current Market Value
Ethereum is currently the second most valuable cryptocurrency in the world with a market cap of $17,052,177,333 USD. 

Cardano is currently ranked the 15th most valuable cryptocurrency in the world with a market cap of $845,150,019 USD.

This significant difference in market cap shows that investor confidence is largely with Ethereum while Cardano is more of a speculative investment. Seeing as Cardano and Ethereum are competing cryptocurrencies, this is an important metric to watch as their market value can and will fluctuate. 

Programming Language
Ethereum utilizes its own high-level programming language developed by its founders, called Solidity. Solidity is a Turing complete smart contract programming language that enables the development of complex smart contracts.

Cardano utilizes its very own high-level smart contract programming language called Plutus, which is similar to the Haskell programming language, but easier to evaluate. The Plutus programming language gives developers a functional smart contract platform.

Development Speed
Ethereum is a fast-moving project in terms of development, while Cardano is a slow-moving project with lots of time spent on research. 

As a result, Ethereum is by far the leading smart contract platform with tons of development and interest from developers and enterprise businesses around the world. Cardano, on the other hand, has a lot of research papers and is still building its product. According to DappRadar, Ethereum has 1795 dapps built atop of it while Cardano has 0. 

However, keep in mind that Cardano is in a much earlier stage of development, but still, it's a difference we can openly discuss. 

4. What are Cardano (ADA) Coin Use Cases?

3143414223-19c30bf71f9eadabce9c255a96f53f9ee8e770646a51b6fabbcf366f70b56bab.png

Cardano (ADA) is the native cryptocurrency of the Cardano blockchain and smart contract platform. Cardano’s ADA cryptocurrency has the following use cases:

  • Digital Cash - ADA as the future of money
  • Governance - ADA stakeholders can vote on protocol upgrades/changes
  • Consensus Mechanism - ADA is staked in the PoS system to secure the blockchain
  • Utility in Dapps - ADA will be the native currency for dapps built on Cardano

Digital Cash 
Cardano (ADA) is a peer-to-peer (P2P) digital currency that can be used to send and receive digital funds. Ada can be transacted with anyone, anywhere, anytime in a decentralized manner without the need for a centralized third party. In this sense, Ada hopes to represent the future of money. 

Governance
Cardano is employing a treasury system in which Cardano (ADA) stakeholders can vote on protocol upgrades/changes. To participate in this system, ADA holders will need to stake (lock-up) their ADA tokens to participate in the vote. As an incentive, ADA stakers/voters will receive a certain portion (eg. 20%) of the treasury fund, paid out in ADA.

Consensus Mechanism
Cardano employs a Proof-of-Stake (PoS) consensus mechanism to validate transactions and secure its blockchain. In this system, ADA token holders can stake their tokens, where they then might be randomly selected by Cardano’s algorithm to produce a block. If selected, the stakeholder receives a reward paid out in ADA. The more a holder stakes, the greater the chance of being selected and earning a reward. 

Utility in Dapps
Any decentralized application (dapp) built on Cardano’s smart contract platform will utilize ADA as the dapp’s native cryptocurrency. Dapp developers will need to pay fees in ADA for hosting the dapp on Cardano and dapp users may need to utilize ADA for certain features in apps. 

5. What is IOHK?

3143414223-e761aee6229147d654c512acd78ec5b0e181f48f2ece74d52e66f38a5bcd5b7f.jpeg

IOHK website homepage 

Input Output Hong Kong (IOHK) is a leading cryptocurrency research and development company that is contracted to work on the development of Cardano until the end of 2020.

The IOHK organization is responsible for actively developing Cardano and completing all milestones on the Cardano roadmap. As well, it is dedicated to studying new tools and paradigms for cryptographic research and the architecture of blockchain-based systems.

IOHK was founded by Charles Hoskinson and Jeremy Wood in 2015 who established the company to work on Cardano and use peer-to-peer innovations to provide financial services to the unbanked. 

Apart from working on Cardano, IOHK describes itself as a decentralized engineering company with small and innovative teams that builds cryptocurrencies and blockchains for corporations, academic institutions, and government entities.

Besides Cardano, IOHK has contributed to other blockchain-related projects including Ethereum Classic, Cardano’s Daedalus, Qeditas, Scorex, RS|Coin, and Symphony. 

When IOHK’s Cardano contract is done at the end of 2020, it is highly likely that it will be extended as Cardano is Charles Hoskinson’s baby, and he is the CEO and founder of IOHK. 

6. What is The Cardano Foundation?

3143414223-6456e201e4932336c89d2252c9944483cba8087d56dc129b1aa4571283585b09.jpeg

Cardano Foundation website homepage

Based in Switzerland, the Cardano Foundation is a separate entity from Cardano with core responsibilities of overseeing, supervising, and contributing to the development of Cardano and its ecosystem. 

The Cardano Foundation Goals

  • Drive adoption for Cardano
  • Shape legislation and commercial standards
  • Grow the global Cardano community
  • Ensure stakeholder accountability
  • Facilitate Cardano partnerships

The Cardano Foundation works alongside two separate entities contributing to the Cardano protocol – Input Output HK (IOHK) and Emurgo. Working with these entities, the Cardano Foundation is committed to protecting and promoting Cardano, establishing partnerships and integrations, and to advocating on behalf of the users and community of the protocol.

7. What role does Emurgo play in the Cardano Ecosystem?

3143414223-d7701455a333413e8058e529f4d8584b5da9c3e85df7944f65d7653dcb39f336.jpeg

Emurgo website homepage

Emurgo is a global blockchain technology company and founding member of the Cardano protocol that provides Cardano-based solutions for developers, startups, enterprises, and governments interested in utilizing blockchain technology.

Emurgo roles in the Cardano ecosystem include:

  • Developing enterprise-grade applications
  • Building developer tools
  • Investing in startups
  • Providing blockchain education

To accomplish these roles, Emurgo leverages its expertise in blockchain research and development as well as its global network of blockchain-related industry partners to support their ventures globally.

Emurgo in Numbers

Emurgo employs 40+ employees across 7+ countries and is working with and investing in 12+ organizations that show synergies with the Cardano ecosystem.

Partners and Investments

  • SOSV
  • Y2X
  • dLab Emurgo
  • Tesseract
  • Sempo
  • Helix.Works
  • Catallact
  • Blockchain for Europe
  • Korea Blockchain Contents Association
  • Korea Mobile Game Association
  • National Agency of Project Management (Uzbekistan)
  • Chamber of Digital Commerce

Products and Services

8. How is Cardano Roadmap Structured?

3143414223-3eddfb0c3b3e98cfb7c001f52d74ccb74caf06bde335227dcf102e704f5862c0.jpeg

The Cardano Roadmap

The Cardano roadmap is structured in five phases:

1. Byron - Foundation (2017-2019)
2. Shelley - Decentralization (2017-2020)
3. Goguen - Smart Contracts (2017-2020)
4. Basho - Scaling (2019-2020)
5. Voltaire - Governance (2018-2020)

Byron

Byron is the first version of Cardano that went live on mainnet in September 2017. This version of the protocol included the groundbreaking Ouroboros consensus protocol and allowed users to send, receive, and store the ADA cryptocurrency. 

The Byron phase saw the release of IOHK’s official Daedulous wallet for storing and managing the ADA cryptocurrency, as well as Yoroi, a light wallet from Emurgo.

Additionally, the Byron phase included:

  • 30+ exchange listings
  • 490,032 Cardano community members
  • 61,000 total answered support tickets
  • 23,430 total GitHub code commits
  • 15 code releases

Shelley

The Shelley phase slowly began in 2017 and encompasses Cardano’s journey to optimize decentralization. Throughout this phase, more and more Cardano nodes began to be run by the community and various protocol upgrades have been implemented to make Cardano more secure and decentralized. 

Additionally, Shelley will see the introduction of a delegation and incentives scheme incorporated into the Ouroboros PoS consensus protocol, which will be a reward system to drive stake pools and community adoption.

Moreover, the Shelley phase was supposed to be completed by the end of 2019, but it is now Q2 2020 and it is still uncertain when the Cardano Shelley mainnet will go live. 

Goguen

The Goguen phase incorporates smart contracts and adds the ability to build decentralized applications (DApps) on Cardano. This phase began with research and development in 2017 and has since been underway in parallel with Shelly. 

Once Goguen goes live on mainnet, which is scheduled for sometime in 2020, developers will be able to develop Plutus smart contracts to create advanced dapps. As well, the Goguen phase will enable users to create new natively-supported tokens.

The Goguen phase is extremely important to kick off the development and usage of the Cardano blockchain. 

Basho

The Basho phase, which started in 2019 and will be carried out through 2020 and beyond, is focused on optimizing and improving the scalability and interoperability of the Cardano blockchain network. 

One of the core developments in this phase will be the introduction of sidechains that offload work from the main blockchain. Also, this phase will see the introduction of parallel accounting styles to increase interoperability.

Overall, the goal of this phase is to make Cardano one of the most high performance, resilient, and flexible blockchain platforms in the industry.

Voltaire

The Voltaire phase includes the introduction of a voting and treasury system that will help Cardano become a self-sustaining system. This system will enable network participants to use their stake and voting rights to influence the future development of the network. 

When this phase is fully implemented, the idea is for Cardano to be completely decentralized and no longer require management from IOHK. 

9. Can you stake Cardano (ADA)? 

3143414223-8dd67f67488dc66008249af063b9a6a2bd1d319cf96f4106476455944ce4998c.jpeg

Staking.Cardano.org website homepage

Yes, you can stake Cardano (ADA) on the Shelly testnet and you will be able to stake ADA on Cardano’s mainnet once Shelly goes live. 

Cardano utilizes a peer-reviewed and provably secure Proof-of-Stake (PoS) consensus mechanism called Ouroboros. The benefits and full extent of this PoS mechanism will only be realized once Shelly (the decentralization phase) is complete and implemented on the Cardano mainnet. 

At the time of writing (April 14, 2020), Shelly has only been implemented on Cardano’s testnet – the Shelly Incentivised Testnet. On this testnet, ADA holders can earn real rewards by either delegating their stake or running a stake pool. 

The testnet is used to test incentivization in a real-world context before Shelly is implemented on Cardano’s mainnet. The information gathered from the Incentivized Shelly Testnet will be used to create a fair and balanced incentive mechanism that hopefully ensures reliable and honest network participation long into the future.

10. Where to store Cardano (ADA)

3143414223-2df5bde2e88b786b21c741f47a3b219cec739091db5364cb3da831a8f7d09c25.jpeg

Daedalus wallet logo

Cardano (ADA) can be stored on a wide array of safe, secure, and reputable cryptocurrency wallets. The best wallets to store Cardano include:

1. Daedalus (Official wallet, desktop)
2. Yoroi Wallet (web, mobile)
3. Ledger Nano S (hardware)
4. Atomic Wallet (desktop, mobile)
5. Exodus Wallet (desktop, mobile)

In addition to the wallets above, Cardano (ADA) can be stored on many other cryptocurrency wallets as well. 

However, the official Cardano wallet, Daedulous, is the most inclusive wallet with full-featured support and access to the Cardano blockchain. 

Daedalus - The Official Cardano (ADA) Wallet

If you want to use the ADA cryptocurrency to its full potential, you must download Daedalus – a secure, multi-platform, HD (hierarchical deterministic) wallet for the ADA cryptocurrency.

The Daedalus wallet has the following features:

  • Securely store, send and receive ADA
  • Encrypted private keys and spending passwords
  • Wallets can be exported to paper certificates
  • ADA redemption with encrypted and unencrypted redemption certificates
  • Configurable transaction assurance level monitoring
  • Cardano blockchain explorer
  • Support for Shelly Testnet Incentivization 

Future Daedalus wallet features:

  • Ethereum Classic and Bitcoin support
  • A mobile wallet for iOS and Android
  • ADA Staking 
  • A dapp store

11. Where to buy Cardano (ADA)

Cardano (ADA) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade Cardano is through cryptocurrency exchanges.

You can buy ADA with cryptocurrency or fiat at the following top exchanges. In most cases, you will have to fund your account with fiat, buy Bitcoin or Ethereum, and then use BTC or ETH to buy Cardano (symbol ADA).

  • HitBTC - BTC, ETH, BCH, USDT
  • Kraken - BTC, ETH, EUR, USD
  • Binance - BTC, ETH, USDT, USDC, TUSD, BUSD, USD, BNB
  • UpBit - KRW, BTC
  • Huobi - BTC, ETH, USDT, KRW
  • OKEX - BTC, ETH, USDT
  • KuCoin - BTC, USDT

In addition to the exchanges listed above, Cardano (ADA) is also traded on a wide array of other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.

Hope you enjoyed that read :) Let me know if I have missed something in the comments.


MuyAsk
MuyAsk

All truths are easy to understand once they are discovered; the point is to discover them


Crypto Truth Lexicon
Crypto Truth Lexicon

It is what it is.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.