Charles Hoskinson founded the Cardano blockchain in 2017. Charles also co-founded Ethereum. Cardano was created as an energy-efficient alternative to proof-of-work (POW) blockchain networks. Cardano uses the proof-of-stake (POS) consensus mechanism, which leads to a faster, more scalable, and more efficient network. Cardano is the first blockchain to implement the proof-of-stake (POS) consensus mechanism. Currently, Cardano’s transactions per second (TPS) are nearly 250.
Cryptographers and programming experts have extensively vetted the Cardano network. The inception of Cardano is founded on extensive academic research. The developers of Cardano have published more than 90 whitepapers explaining the applications of this blockchain. Similar to Ethereum, the Cardano network can enable smart contracts. Smart contract functionality will allow developers to build various applications, games, and dApps.
What is ADA crypto?
ADA is the native token of Cardano. Validators receive ADAs as rewards. The proof-of-stake (POS) system rewards users for staking ADA coins, unlike the proof-of-work (POW), where miners solve complex math problems.
ADA is trading at $0.36 at the time of writing, and the total market capitalization of all ADA tokens is nearly $ 12.3 billion. The maximum supply of Cardano tokens is much higher than that of Bitcoin tokens. The total supply of Cardano tokens is 45 billion, and for Bitcoin, it is 21 million.
How does Cardano work?
Applications can be built on the Cardano blockchain, Cardona serves as a foundational layer for developers to build applications. The workings and application of the Cardano blockchain are similar to the Ethereum network.
The Cardano blockchain has two layers.
Computational layer: This is the layer where, using smart contracts, many applications, and dApps can be built.
Settlement Layer: On this layer, all transactions on the Cardano blockchain are settled and is essentially a ledger.
Hydra, a layer two solution of the Cardano network, enables the blockchain to increase the transaction throughput and scale its operations. The Cardano network can reach a large audience by using layer two solutions.
What is Cardano Staking?
Validators validate transactions on the blockchain by staking their Cardano holdings, known as Cardano staking. Validators earn rewards for validating transactions on the blockchain. There are five steps to Cardano staking.
- Users looking to validate transactions on Cardano need to hold ADA tokens in wallets that can provide Cardano services. Some of these wallets include Flint, Eternal, and Gero. Users should do their due diligence when choosing the right wallet as many provide Cardano staking services. Users need to find a stake pool once they activate their wallets.
- The staking rewards are distributed within 25 days once your chosen pool generates blocks.
- Ouroboros, Cardano’s POS consensus mechanism, calculates the return on staking (ROS) percentage regularly. Rewards are added to the existing stake and re-staked. These rewards can be taken out at one’s convenience.
- Cardano staking is a way to earn passive income if you have a staking pool that frequently validates blocks on the blockchain.
- The final step is to make sure that your staking pool is generating enough blocks. Users can refer to community sites such as pooltools.io and adatools.io.
What Is the Future of Cardano?
The latest Vasil upgrade of the Cardano network was a notable occasion in the history of Cardano. The Vasil upgrade aims to increase the transactions per second and the block size of the Cardano network. The cost of network transactions will also come down after this upgrade. More than a hundred new smart contracts were added to this blockchain post-Vasili upgrade on September 22nd, 2022.
There are five stages to the Cardano roadmap. Each focuses on a specific area.
- Byron: The Foundation
- Shelly: Decentralization
- Goguen: Smart contracts
- Basho: Scaling
- Voltaire: Governance
Developments keep taking place in each stage while each is being implemented sequentially, making the Cardano blockchain more robust. In September 2021, the Goguen update was implemented, and the next update is slated to be released this year.
What is Cardano used for?
The Cardano blockchain has multiple applications.
- Smart contracts: Developers use the Cardano blockchain to build applications using smart contracts. These applications range from gaming to finance.
- For trading and investments: the Cardano network was listed at approximately $0.02 in 2017. Cardano achieved a lifetime high of $3 during the crypto bull run in 2021. Traders can exploit the volatility of this asset to make huge profits.
- Staking: Users can earn passive income by staking using the Cardano network due to its proof-of-stake (POS) consensus mechanism.
Advantages and Disadvantages of Cardano
Is Cardano a token or a coin?
Crypto enthusiasts and users often use the terms coin and token interchangeably. Tokens and coins are vastly different even though they trade similarly on exchanges. Crypto coins run on their own blockchain network, this makes Cardano a coin and not a token as Cardano has its own blockchain. Examples of other crypto coins are Bitcoin and Ethereum.
Cryptos such as Axie Infinity and BAT are tokens as they use the Ethereum blockchain for their operations.
Conclusion
The Cardano network is one of the few projects that support smart contracts. The Cardano blockchain has been around for a long time and is widely popular. While there are various functions of the Cardano blockchain, it faces heavy competition from Ethereum, one of the leaders in crypto innovation. Next-generation cryptos could also give Cardano some competition. Time can only tell how the Cardano blockchain will perform but it is a crypto coin you should watch out for.
You can now buy Cardano on ZebPay.
