What is Cardano Network and the ADA Ecosystem?

Charles Hoskinson, one of the founding members of Ethereum, built the Cardano network to solve the problems of existing crypto networks. Cardano is an open-source blockchain network designed to process transactions using a proof-of-stake consensus protocol.

Hoskinson started developing Cardano in 2015 because he had realized that scalability, sustainability, and interoperability issues can’t be fixed with the proof-of-work mechanism. The goal of introducing Cardano was to provide faster transaction speed to the users while reducing the gas fees.

What is Cardano Network?

Cardano, the decentralized proof-of-stake blockchain, was launched in 2017 and it has positioned itself as Ethereum’s alternative. ADA is the native currency of this blockchain platform that can be used for sending/receiving payments or staking the coins to earn some rewards.

Cardano is determined to provide a secure and energy-efficient blockchain platform to the developers. Cardano is considered to be an updated version of Ethereum as it can also run Smart Contracts on its blockchain. Thus, it enables the development of several applications including Decentralized Finance (Defi) apps, games, new crypto tokens, and more.

Identity management and traceability are the two main applications of Cardano that are currently implemented in different sectors. New Balance, a famous footwear manufacturer, collaborated with the IOHK team in 2019 to enable their customers to confirm the authenticity of the sneakers they’re willing to buy.

Similarly, the Ethiopian Government started using the Cardano network to implement an identity solution for their schools in 2021. It shows that Cardano is trying to establish a strong bond between the digital and the physical world.

A Two-Layer Blockchain

Cardano’s blockchain consists of two layers known as Cardano Settlement Layer and Cardano Computational Layer. Both the layers boost the blockchain’s ability to process transactions quickly and securely.

Cardano Settlement Layer – Cardano Settlement Layer uses Plutus and Marlowe (the scripting languages) for securely transferring the value (currency) from the sender to the receiver.

Cardano Computational Layer – The computational layer separately stores the computational data of the blockchain. This layer establishes Cardano’s ability to implement new protocols as technology advances.

Managed By Three Organizations

The Cardano Foundation, IOHK, and Emurgo are the three different organizations responsible for Cardano’s growth in different sectors.

The Cardano Foundation – The Cardano Foundation is a non-profit organization responsible for expanding the Cardano Network. This organization takes care of research and development while collaborating with government organizations and institutions worldwide.

IOHK – A Hong Kong Based organization that is responsible for blockchain development. This organization also collaborates with different Universities to bring innovative changes to Cardano Network.

Emurgo – Emurgo makes Cardano’s blockchain appealing for the businesses that are willing to utilize it for some projects.

Cardano Development Phases

Cardano Ecosystem is planned to be established in five phases. Each of the five phases is referred to as an era and are named after influential historical figures.

  1. Foundation (Byron Era)

The first two years of the development are known as Byron Era. The development of the blockchain started in 2015 and it was launched publicly in 2017. Emurgo and IOHK also released two ADA-supported wallets with the official launch of Cardano. During this era, the organization was focused on building a strong community that may help with the growth of the Blockchain.

  1. Decentralization (Shelley Era)

Shelley era is supposed to improve the decentralization of the Cardano Ecosystem by involving more participants. This stage will also bring more investors to the Cardano ecosystem by introducing the staking principles and reward system. Another major goal of the Shelley era is to achieve better safety and robustness.

  1. Smart Contracts (Goguen Era)

Goguen Era runs in parallel to the Shelley Era and its main goal is to prepare the Cardano Network for developers who want to build decentralized apps (Dapps) on the blockchain.

During this era, the team will introduce a smart contract development language that will enable users to build their own smart contracts even if they don’t have any technical knowledge. The Goguen era will also enable users to build NFTs on Cardano’s network.

  1. Scaling (Basho Era)

The implementation of smart contracts may affect the performance of Cardano Network. Therefore, the next era of the Cardano Ecosystem will be focused on improving the optimization and scalability of the Cardano network. During this era, the developers will implement sidechains to reduce the load from the main chain.

These chains will be used to test the new protocols before they’re implemented on the main chain. Similarly, they may be used as parachains to improve the network’s overall capacity.

  1. Governance (Voltaire Era)

This is the final era where vote and treasury systems will be introduced to make Cardano a completely decentralized network. During this era, a self-sustaining governance system will be introduced that will eliminate the need for IOHKs management.

From here, the network participants will start using the voting system for different proposals. Thus, the community will become the in-charge of the Cardano network in a true sense.

What Makes Cardano Different?

Cardano is a third-generation cryptocurrency project that is designed to fix the scaling and infrastructure issues of first and second-generation cryptocurrencies. Cardano offers fast transaction processing by using a set of Proof-of-stake (PoS) protocols known as Ouroboros.

Using this mechanism, Cardano can process 257 transactions per second. The team is even working on improving the network’s ability to process around 1 million transactions per second. On the Contrary, Bitcoin only processes 5 transactions per second, and Ethereum’s current network can perform around 12-15 transactions per second.

Cardano team is also planning to establish side chains to enable cross-chain transactions between cryptocurrencies and the global financial ecosystem. Cardano is going to fix the problem of messy hard forks by introducing a self-sustaining economic model.


Cardano is a third-generation cryptocurrency developed to fix the serious problems found in previous generations of cryptocurrency. The best thing about this crypto project is that it’s managed by academics and it’s dedicated to building a bridge between cryptocurrencies and the global financial system.

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