Introduction: This breakdown delves into the history and technical scope of the Cardano blockchain. Discover how Cardano aims to redefine the blockchain landscape and the role that it's founder Charles Hoskinson has on the project!
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Cardano History
Founded in 2015 by Charles Hoskinson, one of the co-founders of Ethereum, Cardano is a blockchain that aims to create scalable platform for DeFi applications.
Cardano website
With a focus on academic research and peer-reviewed methodologies, Cardano is known in the blockchain community as a project that prioritizes scientific rigor and academic partnerships.
The project's development is driven by IOHK (Input Output Hong Kong), a technology company led by Charles Hoskinson himself. IOHK is responsible for the design, development, and maintenance of the Cardano blockchain.
One of the notable differences of the Cardano project is the development and implementation of a new Proof of Stake (PoS) consensus algorithm known as Ouroboros.
Unlike other PoS algorithms, Ouroboros is provably secure and offers a more energy-efficient alternative to traditional Proof of Work (PoW) consensus mechanisms.
Cardano had a successful initial coin offering (ICO) in 2017, raising a total of $62 million. The ICO attracted contributions from a diverse range of individual investors as well as institutional participants.
Additionally, Cardano has managed to secure funding through partnerships, research grants, and collaborations with various academic institutions.
What is Cardano?
Developed by Input Output Hong Kong (IOHK), Cardano combines a layered architecture with a unique consensus mechanism to achieve high security and scalability while maintaining sustainability.
At the core, Cardano uses Haskell, a functional programming language known for its reliability and mathematical rigor, which ensures the reliability and correctness of the platform's codebase.
This choice of programming language sets Cardano apart from other blockchain platforms and enhances the platform's ability to execute complex smart contracts accurately.
Cardano's virtual machine is called the Extended UTXO model (EUTXO). Unlike the Ethereum Virtual Machine (EVM), which employs a global state approach, the EUTXO model focuses on the transactional aspect.
It treats every transaction as an isolated event, making it simpler to analyze and verify the code's behavior. This design choice reduces the potential for bugs and security vulnerabilities, contributing to the system's overall reliability.
How does Cardano work?
To achieve scalability, Cardano employs a layered architecture consisting of two main layers: the Cardano Settlement Layer (CSL) and the Cardano Computation Layer (CCL).
The CSL, also known as the Cardano blockchain, is responsible for handling value transfer between addresses and ensuring the security and sustainability of the overall system.
The CCL, on the other hand, deals with smart contracts' execution and processing. This separation of concerns allows for parallel processing and scalability improvements in future development phases.
In terms of transactions per second (TPS), Cardano's current mainnet implementation has a target TPS of around 6-8. However, the platform is designed to scale by adopting techniques like sidechains and off-chain transactions.
Cardano Coin (ADA)
ADA is the native cryptocurrency of Cardano and plays a vital role in the ecosystem.
It is used to facilitate transactions and pay for the execution of smart contracts on the Cardano platform.
ADA can also be held as an investment as it has the potential to appreciate in value should the Cardano blockchain see high levels of usage and utility.
Another notable feature of ADA is its focus on governance where it's holders to participate in decision-making processes.
This ensures that the community has a say in the development and direction of the platform.
Additionally, Cardano implements a treasury system where a portion of the transaction fees are allocated towards funding the development of the ecosystem.
Cardano Tokenomics
Cardano has been designed to have a maximum supply of 45 billion ADA. In terms of token distribution, ADA tokens were initially sold through an initial coin offering (ICO) in 2015, raising around $62 million.
Cardano's ADA token
50% of ADA tokens were sold in an initial coin offering (ICO), 25% went to the Cardano Foundation and 25% of the tokens were allocated to the IOHK team.
The Cardano network has a built-in inflation rate of 5%. This inflation rate is used to reward stakers and to fund the Cardano Foundation. The Cardano network also undergoes a halving event every 4 years.
Cardano also has a mechanism for burning ADA tokens which is used to reduce the circulating supply of ADA tokens and to increase the value of the token.
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Author
Mike Harry
Mike is a passionate crypto enthusiast who bought his first Bitcoin in 2016. With a natural curiosity and a love for learning and tinkering, Mike is always trying out new DeFi applications. Mike excels at breaking down difficult concepts into easy-to-read guides for beginners.
