Cardano Beginner Guide
Things you need to know about Cardano (ADA)
Last month Cardano showed extreme growths and entered the top five cryptocurrencies by market capitalization. As of now Cardano stays strong in 5th place with around 20 billion in market cap. The currency grew more than 1100% in less than a month, with a price of 1.25 at its peak and overtook IOTA, Litecoin, Dash, Monero and many more. So what makes it special?
Cardano’s developement started in 2015 with the phillosophy to change the way how cryptocurrencies are build. They strive to become the next generation of blockchain with Bitcoin being the first and Ethereum the second. Originaly sold as an ICO in 2016, the project was quietly developing for a year before making its grand entrance in 2017. Cardano is a smart-contract capable platform (like NEO and Ethereum) with additional features.
They offer faster transaction speeds, great reliability, safety features and other. Initial applications for Cardano will be an integration with the mobile gaming market and a Casino. Future plans feature a Cardano Debit Card and many more applications to come.
This short Cardano Guide will give you information on most of the things you need to know about the project, currency, wallet and team behind it all. For more details you can read our in-depth guide for Cardano. Also if you are new to cryptocurrencies you can read our Bitcoin, Ethereum or ICO guide to get you started.
What is Cardano?
Cardano is a decentralized public blockchain simillar to Ethereum and a cryptocurrency project that is fully open source, developed by chief executive Charles Hoskinson who was previously CEO to the Ethereum project. They are developing a next generation smart contract platform which seeks to deliver more advanced features than any previously developed. They are based on the Haskell code and seek to evolve out of a scientific philosophy and research-driven approach to better secure investments.
Cardano is the home to the ADA digital cryptocurrency. The currency, being fully open source, makes possible fast transfers that are guaranteed to be secure through cryptography. Coins will be mined by Epochs, which requires far less computational power than Bitcoin. Also these Epochs create simultaneously blocks and chains, unlike Bitcoin’s one block at a time. This accelerates the speed of transactions per second, which is a big problem of Bitcoin.
Cardano’s development team IOHK, consists of a large global collective of expert engineers and researchers. The way they build the concept of Cardano is by deconstructing the concept of cryptocurrencies. Figuring out what problems can be fixed and what can be made better. They did that by incorporating the Proof of stake algorithm, Ouroboros. Also external auditors will be used.
How will it all work?
Cardano is also a technological platform, that will be able to run financial applications currently used every day by people, organizations and governments all around the world. The Network used is called RENA (Recursive InterNetwork Architecture).It will allow the big scalability of the whole network with more than 100 000 transactions per second, because it is similar to (TCP/IP). Also they solved the problem of massive data circulation with peer to peer partitioning. This means that the data will be divided between thousands of computers in the network.
The platform will be constructed in different layers, giving it flexibility to be more easily maintained and will allow for upgrades by way of soft forks.After the settlement layer, a separate computing layer will be built, called “control layer”, to handle the smart contracts that will be the legal agreements. This will be the middle ground for future commerce and business. Both layers will be linked to one another. The settlement layer will have a unit of account, while the other layer will run smart contracts and will be programmed to recognize identity, assisting compliance and allowing blacklisting.
For the technology it is essential to be secure, scalable and flexible for use by millions of users. Cardano sets a high assurance for implementation and wants to keep the users privacy and security at a number one priority.
Cardano are installing a treasury system that will ensure the sustainability of the protocol. This concept is already established by Dash and they try to make it even better. The idea is that a percentage of the mined coins are going to a democratized decentralized bank account, where the token holders that own ADA will vote for what to do with the money. They can go for marketing, programming, security or whatever needs to be done.
They will also run decentralized applications. These will be services not controlled by any party but instead will operate on the blockchain. Another innovation of Cardano is that it will balance the needs of users with those of regulators, thus combining privacy with regulation. They hope that this precisely engineered new style of regulated computing will bring greater financial inclusion by providing open access for all on fair financial services. On top of that, they are designing Cardano with quantum computers in mind. ADA’s signatures will be quantum computer resistant, meaning that future computers will not be able to “guess” your private keys.
Cardano will be able to interact with different cryptocurrencies, systems and infrastructures. Ripple, Ethereum and Bitcoin all have different structures and coins, making communication and exchanging value hard. Cardano seeks to solve this problem. They also want to make participating in ERC-20 token ICO’s easier and encrypting metadata for the user’s privacy and safety.
Proof of stake mining
Cardano uses a new algorithm for proof of stake called Ouroboros, which determines how individual nodes reach consensus about the network. This algorithm is crucial for ADA’s infrastructure and its innovation in blockchain technology, because it eliminates the need for an energy-hungry proof of work protocol. This will allow for much better scaling and much wider use. Ouroboros is a proof of stake protocol that has been mathematically proven to be very secure. The level of security is compared to the Bitcoin blockchain, which has never been compromised.
Proof of stake or proof of work
The evidence that blocks of transactions are legitimate is called “Proof”. Proof of work is when miners invest computing power to compete to be chosen as the leader who gets to make the next block and win a reward for doing so. For comparison, proof of stake, the stakeholder is randomly selected to do the next block, proportionally to the size of the stake that they have.
Proof of Stake has proven to be better for a cryptocurrency. For the blockchain to be secure, selecting a stakeholder to make a block must be random. To produce the randomness, Ouroboros does this by a secure, multiparty implementation of a coin-flipping protocol. Other cryptocurrencies have attempted to develop a proof of stake algorithm, but many had flaws, since the randomness was actually predictable.
Where can you hold ADA?
The wallet that is needed to use ADA is Daedalus, which is a secure multi-platform wallet for the currency. Deadalus is built by the Cardano Enterprise. After you download it you can send and receive ADA, also you can see your transaction history. The Deadalus wallet has many special easy to use features and security features.
- Encrypted private keys and spending passwords, offering protection against malware.
- ADA redemption directly built into the wallet and support of encrypted and unencrypted redemption certificates.
- Wallets can be exported to paper certificates, giving the maximum security option for holding funds in cold storage.
- Transactions assurance level monitoring.
Engineers are in the process of developing many more features.
Where can you get ADA?
The easiest way to find where to buy Cardano is to go to https://coinmarketcap.com/currencies/cardano/#markets
There you can see if your exchange supports them. If not you can chose from a variety of others, each with different perks. Interesting fact is that Binance and Bittrex hold together more than 90% of the trading volume.
From all of this it looks like Cardano is aiming high. The Cardano blockchain looks like it works better than any other blockchain out there and solves a lot of the current problems. The project is developing fast. The team is growing and is described as a “world-class blockchain engineering company”. They are evolving from a scientific point of research and scientific philosophy so they can bring the best possible version of the blockchain.
The Cardano team recently released their new updated roadmap. https://cardanoroadmap.com/
They are planning a lot of things for the future but it is clear that they have a long road ahead. For now Cardano stays strong in the top five and it will be interesting to see where 2018 leads them.
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