Why has this token become so popular among crypto investors, what are its advantages, how much is the commission, and what does the future hold for Cardano?
At one point, Cardano ranked third in the list of the largest cryptocurrencies by capitalization, second only to Bitcoin and USDT. Now the project closes the top 10, remaining one of the most popular coins among investors.
What is Cardano
Cardano is a cryptocurrency issued on a blockchain created from scratch, running on the Proof-of-Stake (PoS) algorithm, designed for developing smart contracts and creating full-fledged decentralized applications (dApps). The project’s goals include improving network scalability, compatibility, and sustainability for the effective operation of dApps.
Project representatives claim that it adheres to the principles of openness and transparency. All research and technical specifications related to Cardano are publicly available.
The history of Cardano
The project was founded by former Ethereum developers Charles Hoskinson and Jeremy Wood. In 2014, they disagreed with the direction Ethereum was taking, so they started their own business.
In 2015, Hoskinson and Wood established Input Output Hong Kong (IOHK), which undertook the development of Cardano. Subsequently, as is often the case with such projects, the non-profit Cardano Foundation was launched. The internal cryptocurrency ADA, which is used in the Cardano network, was named after the first programmer in history, Ada Lovelace.
Cardano was officially launched on September 29, 2017. Trading of the token began a few days later, on October 1. Since then, the cryptocurrency has risen in price by 2342%, although it is now trading significantly below its historical highs — at $0.4 against the peak of $3.1 set in the fall of 2021.
What is the Cardano (ADA) roadmap?
The Cardano roadmap is a project development plan divided into five epochs: Byron, Shelley, Goguen, Basile, and Voltaire. Each epoch relates to specific functionalities. Although the epochs follow each other sequentially, work on each of them is carried out in parallel — research and development often take place simultaneously.
The first epoch — Byron
This epoch is also called the foundation. It marked the release of the first version of Cardano. Users were able to buy and sell ADA cryptocurrency on a network running on the Ouroboros consensus protocol. The Byron era also saw the launch of the Daedalus wallet (the official desktop wallet for ADA) and the Yoroi wallet, designed for fast transactions and everyday use.
In addition to the first technical developments, this fundamental era was associated with the creation of the Cardano community. As a result, the number of project users approached 500,000, and the cryptocurrency was listed on more than 30 exchanges.
The second era — “Shelley”
The “Shelley” era marked the project’s first steps towards decentralization. As it develops, more and more Cardano network nodes will come under community control. Another milestone is the introduction of a delegation and reward system for stake pools and the community.
The Shelley hard fork took place on the Cardano network four years ago, in July 2020. After that, users were able to contribute more ADA for staking, and the validator commission was also increased. Among other things, a “staking pool” appeared on the network.
The third era — “Goguen”
The next stage in the project’s development was the introduction of smart contracts. In September 2021, the Alonzo update was successfully integrated into the Cardano mainnet. It was the final part of the Goguen era, aimed at creating an ecosystem of decentralized applications on the project’s network.
One of the goals of this era was to create the Plutus programming language. In addition, the developers sought to make the launch of smart contracts simple enough that financial and business experts could do so without in-depth technical knowledge.
The fourth era — Basho
The Basho era is necessary for optimizing the network and improving its scalability. Unlike other eras of network development, it focuses specifically on improving basic performance to better support applications with growing transaction volumes.
One of the key features is the introduction of sidechains that will be compatible with the main Cardano network to expand the capabilities of the blockchain. For example, part of the load can be shifted from the main network to the sidechain, thereby increasing its throughput. Among other things, sidechains are used for experiments without affecting the security of the main blockchain.
The fifth epoch — “Voltaire”
Cardano is currently approaching this epoch, which is the final one according to the project roadmap. This stage is aimed at transforming the network into an autonomous, decentralized system. In particular, as a result of blockchain updates, a new voting format and governance actions should be implemented.
The project developers themselves call the upcoming hard fork the most important for the blockchain industry. After the update is activated, the Cardano network will transition from IOHK to full management by community members. A treasury system will also be introduced, which will be financed by transaction fees. The funds raised will be used to develop the network, with the community participating through voting.
Cardano blockchain architecture
The Cardano blockchain is highly modular. It includes the following components:
- Node;
- Command line interface (CLI);
- Cardano wallet;
- Cardano db-sync;
- GraphQL API server (Apollo);
- SMASH server.
How is Cardano different from other platforms?
The project’s creators claim to have taken a scientific approach to developing the network. In particular, the team has published over 90 documents describing Cardano’s technologies. It is claimed that, unlike previous generations of blockchains (the first being Bitcoin, the second being Ethereum, and the third being Cardano), the system will not suffer from scalability issues and is ready for mass use.
To this end, a proprietary Proof-of-Stake consensus mechanism called Ouroboros was created. It has classic security systems as well as staking rewards. The system processes transaction blocks using a settlement delay mechanism. Cardano developers also claim that Ouroboros distinguishes between network participants and incentivizes only conscientious users.
How to mine ADA?
As with other cryptocurrencies that use the PoS algorithm, Cardano is issued through staking. There are two ways to mine ADA: by running your own node or by delegating your tokens to a staking pool. User rewards are distributed based on the pool’s performance and the amount of ADA delegated.
To start mining ADA, you need to select a pool and delegate your tokens to it. After that, you need to wait until the delegation becomes active. Then you can track the staking process and make adjustments if necessary.
How to store Cardano (ADA)
Cardano is supported by many cryptocurrency wallets. For example, among hot wallets: those created by the developers of the Daedalus Wallet and Yoroi Wallet projects, the Swiss YouHodler, as well as popular cold wallets: Ledger Nano S and Trezor.
It is not recommended to store cryptocurrency on an exchange, as it may be vulnerable to hacking. You should only trust your funds to verified services. In this case, it is worth focusing on wallets recommended by Cardano.
