The Beginner’s Guide to Cardano – What You Need To know

Cardano provides one of the most secure cryptocurrencies by mixing a scientific approach with philosophy. Most probably, the future of mainstream crypto as we know it.

While miners inhabit most blockchain-based ledgers, Cardano amassed many mathematicians, scientists, and independent thinkers. Together they develop and support an open-source and patent-free platform where users can create and execute DApps and smart contracts faster on a multi-layer protocol.

Like most decentralized and highly-promising public networks that use blockchain technology, Cardano has its native asset. ADA is a utility token you can use on the platform and store in the community-developed Daedalus Wallet.

 Cardano is developing slowly but steadily into an innovative cryptocurrency with a development philosophy.

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Cardano in a Nutshell

• Cardano is a decentralized, open-source, patent-free platform
• Cardano uses blockchain technology to enable the creation of smart contracts and DApps
• Cardano was released in 2015 by two former Ethereum employees
• Cardano uses scientific papers instead of a whitepaper
• Cardano uses ADA as native crypto on the platform
• Cardano is the first cryptocurrency to use a Proof of Stake protocol that is scientifically proven to be secure.
• Cardano uses the Ouroboros algorithm to obtain Proof of Stake instead of mining.
• Cardano’s ADA tokens can be stored in the community-created Daedalus Wallet.

What is Cardano?

Cardano is a decentralized public network that uses blockchain technology to enable smart contracts and DApps.

Cardano is in direct competition with Ethereum, the largest smart contract-supporting blockchain on the market.

Like its giant-size competitor, Cardano has a native digital asset in the form of ADA and a Proof of Stake-like consensus mechanism called Ouroboros.

Where Cardano claims to have a competitive advantage is its academically peer-reviewed nature. This fully open-source platform is named after Gerolamo Cardano, a famous Italian polymath from the 16th century. According to its creators, it is the only blockchain network to follow scientific philosophy in its research and development.

Cardano replaced the standard whitepaper that almost all cryptocurrencies release on their launching with a set of academic papers on which it bases its philosophy.

Another aspect differentiating Cardano from Ethereum is its versatile offer of applications and ease of use. The network can process transactions and smart contracts in a multi-layer style to enable users to develop DApps faster and more efficiently.

ADA is the cryptocurrency available on the Cardano network. It is a utility token that allows users to transfer and receive digital funds. Its creators believe that this crypto’s use and behavior on the market give us a sneak preview of how the money will look in the future.

At the time of writing, ADA had a value of USD 0.038545 per unit, and a market cap of USD 999,350,627, according to CoinMarketCap.

A brief history of Cardano

Cardano is the creation of Charles Hoskinson (one of Ethereum’s co-founders) and one of his former colleagues at Ethereum, Jeremy Wood.

In 2015, the two developers proposed a new blockchain-based platform for smart contracts and cryptos that would expand the use and understanding of the world of digital assets and applications.

Hoskinson and Wood established Input Output Hong Kong (IOHK), one of the major companies supporting Cardano’s development. In time, two others joined their efforts – Emurgo and The Foundation.

The developers raised almost $63 million for Cardano’s development in an ICO that lasted for nearly two years, between January 2015 and January 2017.

Cardano is the only blockchain-based network to have passed the official algorithm review at the International Cryptology Conference in 2017.

How does Cardano work?

Cardano works as the Cardano Settlement Layer (CSL), the balance ledger, and is the network’s top layer. According to the Ouroboros whitepaper, its developers consider it an improvement to Bitcoin and a cryptocurrency innovation.

Cardano uses Ouroboros, a Proof of Stake algorithm with additional features that make it completely distinct from other smart contract-based blockchains.

Ouroboros is a crucial element of the system that supports ADA cryptocurrency. Contrary to other algorithms, it removes the need for mining from the users. Instead, it uses mathematics to prove the validity of a transaction through a randomly selected stakeholder, which only has a proportional size to the stake.

Ouroboros is the first to develop a proof-of-stake algorithm that ensures complete randomness and optimal security. This process uses a multiparty implementation of a coin-flipping protocol, a cryptocurrency innovation.

Cardano also summarizes its entire development into an allegorical sequence called the Cardano Roadmap.

Staying true to the network’s philosophical and scientific approach to cryptocurrency, the Cardano Roadmap uses five divisions of development, each named after great historical innovators, as follows:

•         Byron | Shelley | Goguen | Basho | Voltaire

These five stages are called eras and will develop in parallel but be delivered sequentially. They will include years of research, proposed algorithms, developments, and prototyping that will link academic discoveries with innovations in cryptocurrency to transform Cardano into the next generation of cryptos ready for mainstream adoption.

Each era in the Cardano Roadmap has a countdown to its release. Once an age is revealed, all of its content becomes accessible to the Cardano community. 

How to buy and own ADA

Cardano’s native asset ADA has a hard cap of 45 billion pre-mined tokens.

You cannot buy an ADA with fiat money. However, you can make an account on popular cryptocurrency exchanges online and exchange fiat currencies for other cryptos like Bitcoin, Ethereum, or Litecoin. Next, you can use these tokens to purchase ADA.

Here are some of the best choices for becoming an ADA owner:

•       Binance | Bittrex | CoinSwitch | Gemini

Where to store ADA

When it comes to storing ADA, Cardano offers a reliable solution with its Daedalus Wallet.

This storage option for digital assets is a safe, multi-platform HD wallet developed explicitly for the Ada cryptocurrency. You can easily install it on your computer, whether it is a PC or a MAC, and benefit from the following:

•         High protection encrypted private keys and passwords.
•         Protection against hacker attacks and malware
•         The option to export the wallet to cold storage solutions like paper certificates
•         Transaction assurance level monitoring

The Cardano developers are working on enhancement solutions to benefit from using ADA tokens and the ledger. These projects include:

•         Support for Ethereum and Bitcoin
•         A portable wallet for both iOS and Android-running smartphones
•         The possibility for ADA holders to participate in the block generation process actively.
•         An app store where the community can promote its locally-built applications

The advantages of using Cardano

• Cardano uses Ouroboros – the first Proof of Stake protocol scientifically proven secure.
• Cardano uses a multi-layer protocol to enable the execution of smart contracts and DApps concomitantly on different layers.
• Cardano fulfills cryptocurrency’s main requirements by simultaneously ensuring its users’ security and the viability of its processes.
• Cardano can quickly adapt to the upcoming changes in the cryptocurrency market through soft forks.
• Cardano is open-source and patent-free.

The risk of investing in Cardano

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The development speed of Cardano is slow despite its promising potential and future success. The ICO that took two years to complete is a clear sign that while Cardano uses a scientific approach to create the most secure cryptocurrency to date, maybe overthinking its next steps dents its evolutionary pace.