This cryptocurrency was mainly designed to eliminate some common issues including scalability, interoperability, and regulatory compliance.
Charles Hoskinson, the co-founder of Ethereum, launched Cardano in 2017. Cardano is more environmentally friendly compared to Bitcoin and Ethereum because it processes transactions using a proof of stake mechanism.
The unique thing about Cardano is that it allows users to customize the rules of its transactions individually.
Brief History of Cardano
Cardano’s development was started by IOHK, a blockchain engineering company, back in 2015. Charles Hoskinson co-founded this company after leaving Ethereum Foundation. This engineering company was focused on fixing the major problems found in the leading cryptocurrencies at that time.
Cardano was launched in 2017 and it was funded through an Initial Coin Offering (ICO). The coin became really popular within a short span of time as it achieved a market cap of $33 billion in 2018 while its market cap was only $600 million on its debut.
Over the years, Cardano has donated thousands of dollars to different institutes including the University of Wyoming and the University of Edinburgh for the development of blockchain technology. IOHK is also deploying its technology in different industries of Ethiopia since 2018.
Recently, Ethiopia’s Education Ministry announced that they’re working with IOHK to launch an identity and record-keeping system for local students.
Things You Need to Know About Cardano
Cardano is the 6th largest cryptocurrency with a market cap of around $64 million. Cardano has successfully maintained its position in the leading cryptocurrencies for many years.
Cardano is More Energy Efficient
Bitcoin and Ethereum use a proof of work system for verifying transactions while Cardano uses a proof of stake mechanism. The beauty of the proof of stake system is that it only allows a limited number of devices to verify transactions at a time while the proof of work system doesn’t have any such features.
So, Bitcoin and Ethereum’s blockchains consume more energy as compared to Cardano because they don’t limit the number of devices. Bitcoin’s annual energy consumption is almost equal to the Netherlands’s annual consumption. Similarly, Ethereum’s annual consumption is equal to Portugal.
On the contrary, Cardano’s energy consumption is almost equal to 600 U.S. homes. Some bigger companies have already announced that they would suspend accepting bitcoin payments if its energy problem isn’t resolved. In this situation, Cardano may have an edge over other cryptocurrencies because it’s one of the leading cryptocurrencies that are energy efficient.
Cardano is Developed by a Team of Academics
Some of the World’s top academics, including the University of Wyoming, University of Edinburgh, and several other institutes, regularly monitor Cardano’s network. Unlike other cryptocurrencies, Cardano’s development cycle takes quite some time because Hoskinson believes in making incremental improvements rather than immediately introducing the people to a ready-designed system.
Cardano can Handle a Large Number of Transactions
Cardano has the ability to process around 257 per second while Bitcoin and Ethereum can only process 5 and 15 transactions per second respectively. Cardano’s team is now working on adding another layer to Cardano’s blockchain that will ultimately enable it to process more than 1 million transactions per second.
Cardano has a limited Supply
Like Bitcoin, Cardano also has a limited supply which makes it a better option than other cryptocurrencies. Currently, there are around 32 billion ADA coins in circulation. The system is designed to generate a maximum of 45 billion ADA coins. The limited supply isn’t enough for boosting a coin’s price but it may play a vital role if Cardano earned more popularity in the future.
How Does Cardano Work?
Cardano’s blockchain consists of two layers called the settlement layer and the computational layer. The settlement layer is already operational and it enables users to transfer funds to each other quickly and safely.
The computational layer is under development and it will be launched pretty soon. This layer is going to help users who want to launch smart contracts on a secure and environmentally friendly blockchain. The unique thing about Cardano’s smart contracts is that the users can customize the terms of these contracts according to their requirements.
Cardano’s smart contract program is expected to receive more appreciation than other blockchains because it can easily fit into the legal framework of different countries. So, whatever rules are implied by the local government, the users can customize the contracts accordingly.
The developers can also use Ada’s blockchain for building different decentralized apps. Over the years, Cardano’s blockchain has proved to be more flexible than Ethereum because it works on the proof-of-stake protocol. Thus, it offers much faster transactions with lower gas fees.
How to Mine Cardano?
Unfortunately, Cardano isn’t the right option for miners who have mining rigs installed because it works a bit differently. As we’ve mentioned that Cardano works on Proof-of-stake protocol while other cryptocurrencies work on proof-of-work systems.
Thus, Cardano offers a much better option for those who want to earn rewards. The miners don’t need to install ASICs or GPUs for mining. They just need to buy some Ada coins and then stake them on different platforms. They will start receiving coins right after they stake their coins.
So, Cardano is a more affordable option compared to other cryptocurrencies because investors don’t have to spend money on equipment, power, and cooling for validating transactions.
Conclusion
Cardano is commonly recognized as Ethereum Killer because it’s launched by the co-founder of Ethereum. So, he’s pretty much aware of weaknesses found in Ethereum or other leading cryptocurrencies. Cardano is collaborating with government organizations and institutes to boost the development of Blockchain technology. It’s expected to become more popular as soon as it’s smart contract program is launched.