What is Cardano?
Cardano is one of the most prominent layer one blockchains in the cryptoverse. You’ve probably already heard of one of its co-founders and chief, Charles Hoskinson. Cardano has a loyal fanbase that spans the globe, but it seems to be a project you either like or you don’t – there isn’t much middle ground. Hoskinson co-created Cardano with fellow technologist Jeremy Wood back in 2017, and the two of them have a history of working together – having done so at the beginning of the Ethereum project in 2013.
Cardano’s Structure
Today, Cardano is maintained by three separate organizations.
- The Cardano Foundation – who oversee the development of the blockchain
- IOHK – (co-founded by Hoskinson and Wood) who built Cardano and designed the proof-of-stake (PoS) algorithm Cardano uses to operate its network, and
- Emurgo – the sales machine to convince organizations to adopt Cardano’s technology.
When Cardano was launched, it created approximately 31 billion of its native currency, ADA. 26 billion ADA were sold to investors, and the remaining 5 billion ADA were distributed to the Cardano foundation, IOHK, and Emurgo. The maximum supply of ADA will be capped at 45 billion tokens, with the remaining tokens to be issued through minting.
If you own ADA tokens, it is very likely that you are staking them. Cardano owners help operate the network and can vote on proposed changes to software rules. Developers can use the Cardano blockchain for familiar features, building smart contracts, and decentralized applications.
What Makes Cardano Unique?
Cardano differs from other projects, as Hoskinson frequently emphasizes their research-driven approach to design as being their unique selling point. It is believed that this will accelerate user adoption. The project codebase is written in the Haskell programming language, a language commonly used in both the banking and defence sectors where security is paramount.
The Cardano blockchain itself is divided into two layers:
- A settlement layer, used to transfer ADA between accounts and to record transactions.
- A computation layer, which contains the smart contract logic needed to be able to move funds.
What is Orobouros?
The PoS consensus algorithm used by the Cardano blockchain is called Orobouros, and is used by computers to secure the network, validate transactions, and earn newly minted ADA. Ouroboros divides time into epochs and slots, where epochs are the overarching time frames (occurring every 4 days), and slots are 20-second increments within each epoch. Within each slot, a slot leader is randomly chosen and is responsible for choosing the blocks that get added to the blockchain.
What’s Next for Cardano?
Cardano was released to compete with Ethereum, however they have fallen behind in terms of functionality available for end users. One of the major things missing from the proposition is the support of dApps talking to Cardano wallets and NFTs. However, there are proposals currently being worked through that will build this support in 2022. The introduction of SundaeSwap on the blockchain has brought about the first major DEX and also new wallets such as Nami Wallet and CC Vault. More developers are now working on the blockchain, so whilst there’s been a lot of hype, there is hope that Cardano will eventually succeed and scale.
Rebecca is an investor and writer based in the UK. She specializes in breaking the news into bite size pieces and simplifying investing topics. You will find her on Twitter and Instagram providing investing education.
