The shift towards Proof of Stake blockchain platforms has been gaining considerable momentum in recent times. If you have been following the domain of crypto news closely, then you must have come across Cardano cryptocurrency. Many of you might wonder about the question “What is Cardano?” and the reasons for which it is better. Interestingly, Cardano has become one of the top entries among the fastest-growing blockchain platforms in the crypto landscape.
Since its launch in 2015, the Cardano cryptocurrency has come a long way, with ADA finding a place among the top ten crypto assets in terms of market capitalization. The staggering growth of the platform at an unbelievably fast rate presents strong propositions for its capabilities to compete with Ethereum. Let us learn more about Cardano and its underlying technology to understand why it is so popular in the crypto world.
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What is Cardano?
The first and obvious question in any discussion on Cardano crypto would refer to its definition. According to the official documentation on the Cardano website, it is basically a decentralized Proof of Stake blockchain platform. As a third-generation blockchain platform, the Cardano blockchain also serves as the home for ADA cryptocurrency.
Another interesting highlight about Cardano is that it is the first blockchain platform based on a research-first approach and scientific philosophy. The blockchain platform has been created from scratch, followed by verification from many engineers and academic experts in cryptography and blockchain technology.
The answers to “What is Cardano?” also refer to the platform’s emphasis on transparency, sustainability, and scalability. As a completely open-source project, Cardano wants to offer a fair, resilient, and inclusive infrastructure tailored for transforming social and financial applications. Cardano primarily focuses on introducing trustworthy and safe financial services to people who cannot access existing financial systems and infrastructure.
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Programming Language of Cardano
The programming language underlying Cardano is also a crucial highlight in any account of the Cardano blockchain explained clearly. One of the key highlights underlying the foundations of Cardano is security, and the programming language Haskell helps the blockchain network offer improved security. Haskell is a functional programming language that enables the creation of blockchain systems with pure functions. As a result, Haskell helps in creating a design with ease of testing different components conveniently in isolation.
In addition, the advanced functionalities of Haskell also improve the security of the Cardano ADA blockchain network. You can use the advanced features for implementing different methods that can support the verification of the code. For example, you can run tests in simulation or try extensive property-based testing. Haskell also enables implementations on the basis of formal and executable specifications for ensuring the correctness of the code.
Working of Cardano Crypto Platform
Cardano is obviously one of the top-performing blockchain platforms in the crypto world right now. It has been tailored as a next-generation improvement over the vision of Ethereum. Cardano aims to develop a flexible, scalable, and sustainable blockchain platform for operating smart contracts, thereby enabling the creation of many decentralized finance apps, games, crypto tokens, and many other assets.
The native Cardano cryptocurrency, i.e., ADA, is available on multiple exchanges, and you can use it for different purposes. You can use ADA for storing value or staking on the Cardano network. In addition, you can also use Cardano ADA for sending and receiving crypto payments or making transaction fee payments on the Cardano network.
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Ouroboros Proof of Stake Protocol
Another important highlight in the working of Cardano blockchain explained properly is the objective of environmental sustainability. The blockchain platform leverages a unique Proof-of-Stake consensus protocol, Ouroboros, rather than the Proof-of-Work consensus mechanisms. Proof-of-Work is the traditional consensus mechanism for blockchain networks to ensure freedom from double-spending without centralized authorities.
However, Proof-of-Work consensus involves the requirement of considerable amounts of processing power, where miners compete for solving mathematical puzzles. On the contrary, Proof-of-Stake consensus depends on a network of validators who have to stake native tokens in the platform. The Ouroboros Proof-of-Stake consensus protocol for the Cardano crypto network requires members to stake their ADA cryptocurrency in the platform.
The network would select the validators from a pool randomly and reward them on the basis of their stakes in the network. For example, the selection of validators in Cardano ADA would depend on the amount of ADA you have in the pool and the time for which you had it in the pool.
After validating the latest block of transactions, other validators can attest to the accuracy of the block. Upon completing a specific number of attestations, the network can update the blockchain with the transaction. The participating validators receive awards in ADA cryptocurrency according to the proportion of their stakes in the network.
Here is an outline to understand how the Ouroboros process works in the Cardano crypto network for accommodating multiple transactions.
- The network starts with a random selection of a few nodes, which can have the privilege of mining new blocks. The nodes selected in this step are the slot leaders.
- In the second step, the blockchain splits into slots, referred to as epochs.
- Slot leaders have the privilege of mining the specific epoch allocated to them or the sub-partition of any epoch they want. Participants are responsible for mining an epoch or a part of the epoch to receive rewards for their services.
Most important of all, the Cardano cryptocurrency network is infinitely scalable in theory due to the facility for infinite partitioning of an epoch. Therefore, the Cardano blockchain can successfully run many transactions without any setbacks.
Want to know the differences between PoW and PoS algorithms? Check the detailed guide on PoW Vs. PoS: A Comparison Between Two Blockchain Consensus Algorithms
The next important highlight in the architecture of the Cardano ADA crypto network is the Daedalus wallet. It is a unique feature in comparison to other significant cryptocurrencies such as Ethereum and Bitcoin. As the name implies clearly, it is the wallet for the ADA cryptocurrency. On top of it, users get more than just the functionalities of a wallet with the Daedalus wallet.
As a matter of fact, the wallet offers a full blockchain node, thereby offering complete control over your funds. Daedalus wallet plays a vital role in ensuring transparency for the Cardano blockchain alongside the Cardano blockchain explorer, which offers a detailed overview of all transactions.
Most important of all, it is the only wallet that allows ADA crypto holders to participate in staking on Cardano. The Cardano blockchain network follows a Proof of Stake protocol, and token holders can operate the staking pool with their Daedalus wallet. As a result, ADA holders can have the opportunity to earn cryptocurrency while extending their support for the network.
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How Can I Use ADA?
Speaking of using Cardano ADA for earning cryptocurrency while showing support for the network, it is important to find how to use the cryptocurrency. You can use the Cardano coin as a medium for the transfer of value like other cryptocurrencies such as Bitcoin and Ethereum. However, ADA also serves many other use cases.
First of all, you would find the outline of Proof of Stake protocols in most accounts of Cardano blockchain explained comprehensively. ADA token holders can stake their tokens on the platform to help stake pool operators verify transactions. With the help of the secure staking system, ADA token owners can obtain proportional rewards for staking their tokens on the platform.
If you are wondering about how to buy Cardano native cryptocurrency, ADA, then you must know about its potential uses in voting. The token holders have complete privilege over determining the future direction and changes in the protocol. Cardano crypto holders can use their tokens for voting on proposals for new changes or developments in the Cardano blockchain. In addition, ADA also presents some favorable prospects for creating smart contracts on the decentralized blockchain network. The native Cardano coin can serve as a crucial tool for executing contracts.
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Benefits of Cardano Blockchain
The value advantages of Cardano set it apart from other blockchain networks. First of all, you have an environmentally sustainable blockchain protocol based on Proof of Stake consensus. On top of it, Cardano is the first research and evidence-based blockchain protocol. Cardano also complies with the fundamental tenets of blockchain networks by offering a secure and trustless environment for transactions among completely anonymous actors.
In addition, community support with incentivized participation is another notable advantage of the Cardano cryptocurrency network. You can buy the Cardano coin on any popular exchange with fiat currency or by trading for other crypto assets. Most important of all, the simple and easy-to-use interface alongside comprehensive documentation offers practical guidance on using the Cardano blockchain.
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The detailed overview of the Cardano crypto network shows that it is a promising alternative to existing blockchain platforms. With the power of Ouroboros Proof of Stake consensus protocol, the Cardano blockchain can enable staking. At the same time, the native cryptocurrency, ADA, has evolved as a prominent tool in the Cardano ecosystem.
Subsequently, one could not miss out on the Daedalus Wallet, which allows ADA token holders to operate their own staking pools. You can join the Cardano ecosystem by getting your hands on ADA coins from any popular exchange. Start exploring the design of the Cardano blockchain in detail.
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*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!