Cardano —— An Open-Source Public Blockchain To Support Smart Contracts
- Cardano (ADA) is an open-source Proof-of-Stake (PoS) blockchain network with its inception dating back to 2015. It utilizes a modified version of UTXO (EUTXO) to accommodate support for smart contracts, which is currently under development.
- It is supported by three main organizations: the Cardano Foundation, IOHK, and Emurgo. They all work in conjunction to support development, promotion, and commercial adoption efforts.
- Cardano’s progress of development is divided into 5 phases, which are concomitantly rolled out through a process that relies heavily on academic research and engineering best practices.
- Cardano is expected to implement full support for smart contracts by the end of 2020 with the final Goguen update.
- ADA is the native token of Cardano, every ada holder also holds a stake in the Cardano network.
What is Cardano (ADA)?
Cardano is a proof-of-stake blockchain platform that says its goal is to allow “changemakers, innovators and visionaries” to bring about positive global change. The open-source project also aims to “redistribute power from unaccountable structures to the margins to individuals” — helping to create a society that is more secure, transparent and fair.
Cardano was founded back in 2017, was ranked as the most actively developed cryptocurrency project in 2019 according to Santiment’s 2019 Market Report, full mainnet support for smart contracts remains absent, preventing the growth of decentralized applications and other tokens on its network.
Cardano is used by agricultural companies to track fresh produce from field to fork, while other products built on the platform allow educational credentials to be stored in a tamper-proof way, and retailers to clamp down on counterfeit goods.
Ada is the native token of Cardano, it is named after Ada Lovelace: a 19th-century mathematician who is recognized as the first computer programmer, and is the daughter of the poet Lord Byron. Every ada holder also holds a stake in the Cardano network. Ada stored in a wallet can be delegated to a stake pool to earn rewards – to participate in the successful running of the network – or pledged to a stake pool to increase the pool's likelihood of receiving rewards. In time, ada will also be usable for a variety of applications and services on the Cardano platform.
A two-layer approach on its platform
Cardano is composed of two separate layers that utilize proof-of-stake consensus throughout the system. Division of the network into a Settlement Layer (SL) and Computation Layer (CL) is meant to allow for developers to optimize each one independent of the other, thereby increasing the efficiency, scalability, and flexibility of the network.
Global state on the Cardano blockchain
Cardano currently maintains the state of the blockchain through the UTXO (unspent transaction output) model pioneered by Bitcoin. Inputs and outputs carry information regarding changes in value. However, the UTXO model is not optimal for the support of smart contract functionality. To address this issue, it plans to release its adapted version of UTXO, called Extended UTXO (EUTXO). EUTXO introduces mechanisms that split the execution of a smart contract into multiple transactions.
The Ouroborous Proof-of-Stake algorithm
Cardano is secured through an “environmentally sustainable, verifiably secure” PoS protocol that’s known as Ouroboros.
The project says that Ouroboros improves upon the security guarantees that are delivered by a PoW consensus mechanism while using substantially less power — claiming that it is four times more energy efficient than Bitcoin.
It is described as a blend of unique technology and mathematically verified mechanisms, with behavioral psychology and economic philosophy thrown in for good measure. Overall, the objective of Ouroboros is to achieve sustainable and ethical growth.
Cardano was founded by Charles Hoskinson, who was also one of the co-founders of the Ethereum network. He is the CEO of IOHK, the company that built Cardano’s blockchain. There are three separate organizations actively promoting and contributing to the project. The center is the Cardano Foundation, an independent body based in Zug, Switzerland. The Cardano Foundation primarily is responsible for overseeing and supervising the development of Cardano. Input Output HK (IOHK) is contracted to design and build Cardano while EMURGO, is a for-profit arm that aims to grow the Cardano ecosystem through commercial ventures. The three entities are separate in governance, ownership, and leadership.
Cardano is one of the biggest blockchains to successfully use a proof-of-stake consensus mechanism, which is less energy intensive than the proof-of-work algorithm relied upon by Bitcoin. Although the much larger Ethereum is going to be upgrading to PoS, this transition is only going to take place gradually.