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Cardano Blockchain Explained

What is Cardano

Cardano is an open-source blockchain project that is developed in layers. It is used to run financial applications which are globally used by businesses, consumers, and governments. Cardano makes it possible to send and receive digital money, ensuring quick, direct and safe transfers of cryptocurrencies. The layered development of the project allows the coders and engineers to maintain and upgrade the blockchain easily. ADA is the currency of the blockchain.

Cardano, like Ethereum, is able to run decentralized applications or dApps. In addition to ADA layer, there is a single processing layer for smart contracts related to financial regulations and legal agreements. Cardano is different from other blockchains since it has adopted a research-driven approach to solving the significant problems consumers may face.

What is Cardano Blockchain?

What is Cardano

Cardano is one of the most popular cryptocurrencies in a market with over 10,000 crypto coins. This cryptocurrency is Cardano and it’s individual unit is ADA.

Charles Hoskinson, a co-founder of Ethereum, founded Cardano in 2015. It began trading publicly in October 2017 on a decentralized public ledger. Like its counterparts, it uses blockchain technology to manages and tracks the cryptocurrency, recording and ordering every transaction that occurs using it.

Cardano makes use of a proof-of-stake decentralized system to validate transactions, verify their integrity. This system further helps ensure that the whole system is robust and error-free. Therefore, Cardano as a token enables powering or enabling apps specially to transfer cryptocurrencies.

What is ADA?

What is ADA

ADA is the native cryptocurrency of the Cardano platform. Just like the relationship between ETH token and Ethereum platform, ADA tokens is developed to fuel the Cardano blockchain. The crypto coin is used to pay transaction fees and are staked by stakeholders, or validators. Validators cooperate with Cardano to help maintain security and stability of the network in exchange for earning rewards.

Many discuss the future of ADA to be similar to ETH, a major cryptocurrency in digital market.

What does Cardano do?

Cardano empowers several different features on its platform:

  • Currency exchange: Owning a cryptocurrency wallet, users can send and receive Cardano or transfer it in exchange for goods and services.
  • Smart contracts: Cardano enables smart contracts that automatically self-execute if the contract’s conditions are met.
  • Decentralized finance: Following the nature of NFT market, Cardano also enables people to skip a third party, such as banks and other financial institutions, to transact directly with fewer but more secure permissions to other individuals or entities.
  • Digital apps: Cardano is a part of decentralized finance which allows lending, trading, asset management, insurance and other typical financial services.

Considering all its capabilities, Cardano can be defined as a token that powers various financial services as well as a currency.

What are the uses for ADA Cardano?

Similar to other cryptocurrencies, Cardano coin is used as a transfer of value. However, ADA has other applications, too.

PoS blackchain protocol is the core principle of Cardano which allows ADA stake to the blockchain and help “stake pool operators” successfully verify transactions on the blockchain. if users stake their ADA to the blockchain, they get more Cardano crypto in return. This staking system improves security throughout the blockchain.

ADA can also be used for voting. Cardon is also unique among other blockchains as it allows token holders to vote for important decisions with the blockchain. Therefore, Cardano crypto holders use their ADA to vote on new changes or developments to the blockchain. Thus, cryptocurrency owners have an active role in main decision making process.

According to Cardano roadmap, ADA will also power the smart contract platform on the blockchain in near future so that ADA is used to create smart contracts and applications that run on the secure, decentralized Cardano blockchain.

The major stakeholders of ADA

Hoskinson and Wood are the genius minds who developed the core principles and smart contract platform of Cardano, however they are not the operator or the owners of Cardano blockchain. instead, a variety of different stakeholders are there to run the project:

  • Cardano Foundation is a nonprofit, custodial entity for the entire project to support the blockchain and ensure its security.
  • IOHK. Charles Hoskinson and Jeremy Wood founded IOHK in 2015 which helped research and develop of Cardano blockchain with the design and engineering.
  • Embargo is a large funding entity to financially support Cardano and assist with its development.

How does Cardano work and what technology does it use?

Cardano model, compared to other blockchains, is slightly different. Cardano blockchain comes in two layers, a settlement and a computational layer. The first layer, which allows consumers to send and receive ADA tokens from one wallet to another, has already been completed, and it is functioning now. It is quiet similar to the method employed by Ether. Cardano team is working on the second layer and it is under development. The computational layer enables users to initiate and sign up on smart contracts. Some argue that it is similar to the Ethereum blockchain, but, in fact, it has some advantages over it.

First, Cardano is designed to be more adaptable to the requirements of end-users. For example, the same contract can be written in a way that it can fit different financial and monetary regulations in different countries. It can adapt the contract regarding information storage, process, and access relative to the desired regulations. It is worth noting that computational layer functions separately so ADA users in different contries can use the same currency and still comply with various laws and regulations.

Besides, the computational layer provides the Cardano team to apply required changes using soft forks with no disruption to the ADA or settlement layer. Cardano takes the advantages of the proof-of-stake protocol to verify transactions. As already mentioned, users, owning a certain amount of ADA coins, can vote on all process. As appreciation to their participation, Cardano reward them based on their stake.

What Are the Benefits of Cardano?

Cardano Advantages and Disadvantages

Layered Blockchain

Cardano includes two separate blockchains used with its token processing and smart contracts. Therefore, it can update the blockchain with soft forks without creating any distractions for the other part.

More Adaptable

Compared to other blockchains, Cardano is much more adaptable to conditions met, which means that a single, smart contract can be modified to benefit different users, ensuring compliance for all stakeholders.


The blockchain is also decentralised and, as the result, no single central entity controls the security and validation process of transactions.

Improved Financial Freedom

Cardano aimes to combine consumer convenience and regulatory compliance all together, which allows millions of people to access to financial freedom.

Is Cardano a good investment?

Is Cardano a good investment

Cardano price has been volatile recently. Observing all highs and falls in crypto market, Cardano has proved that it is not backed by any assets or cash flows. As you may know, the growth of a stock is a fraction of the progress with its relative company, so if that company grows over time, the stock will likely get a rise in price. However, traders in Cardano do not experience the same process. Cardano rises and falls as the optimism of traders waxes and wanes. The main motivation with Cardano is sentiment, speculation and the optimism of other traders, not the success of an underlying business. Indeed, traders notice that they may sell the coin later to someone else for a higher price.

Furthermore, with the development of applications to the cryptocurrency, more transactions will be accomplished with the crypto coin and, as the result, there will be more demand on that. All again, more investors come to the scene to take advantage on holding or trading the coins. Like many other cryptocurrencies, Cardano seems potential to fit the future demands of the market.

About Tiffany Ellis

She is a smiley curious writer from the USA. She loves Cryptocurrencies, Arts an also NFTs.

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