Cardano is a Blockchain network. It is open source and decentralized. It has had slower growth compared to other cryptos. But lays the groundwork that can lead to massive growth and more Dapps and DeFi projects to Cardano in the later future. In this article, we want to explain Cardano and take a look at its origin and characteristics and compare it with Ethereum.explain cardano
Cardano is a Blockchain network similar to Ethereum, Bitcoin or Solana. It was founded in 2015 by Charles Hoskinson. He was the co-founder of Ethereum and later also co-founder of IOHK (Input Output Hong Kong). IOHK helped create the Cardano. It is a Proof of Stake blockchain. This helps to save electricity, but also improves transaction speed. It can process 250 transactions per second, but can be further improved to process more.
Cardano is named after an Italian mathematician Gerolamo Cardano. The cryptocurrency ADA and sub-currency Lovelace are named after Ada Lovelace. This helps to save electricity, but also improves transaction speed. It can process 250 transactions per second, but can be further improved to process more. It is the 7th largest cryptocurrency and has a market cap of $37 billion.
Cardano is deflationary. It means it only has a limited coin supply of 45 billion ADA coins to ever be made and no more than that. This means that over time, as demand increases, Cardano’s value will increase. It focuses on 3 main goals:
- Scalability: To scale the blockchain as the user base grows. Increase transaction speed over time.
- Interoperability: Acting as the internet of blockchains. Help transfer assets between different blockchains.
- Sustainability: Being self-sufficient and operating independently.
To achieve these goals, Cardano uses different methods and technologies. These features help shape it and are the reasons Cardano has such massive community support. Let’s take a look at some of those features and how they accomplish the 3 main goals.
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In a Proof of Stake blockchain, one random person is selected to validate the transaction. Ouroborus is a proof-of-stake protocol. In this protocol, the time between the creation of data blocks is divided into epochs. Epochs have multiple slots. People participate in these slots. Some are randomly chosen as slot leaders. The slot leaders are now responsible for mining or validating trades in that slot. This whole process is called Ouroborus
One block is added per Epoch and must be completed before the next Epoch. If the closing leader does not validate the trade for the next era, someone else is selected. The advantage of this protocol is that multiple parallel epochs can be run simultaneously and the number of slots in the epoch can be increased to increase scalability.KMZ side chain protocol
One of Cardano’s goals is interoperability between different Blockchains. Currently, there is no way for different blockchains to communicate. Or even transfer assets without using a crypto exchange. Cardano wants to change that and become an internet of Blockchains. They use protocols like KMZ Sidechain to enable a seamless transfer of assets between Cardano and another Blockchain. Cardano is working on more solutions to improve interoperability with bridges.Treasury System
Treasury is a smart contract. It stores money collected from the transaction fees applied to each Cardano transaction. The money is safe and cannot be used by anyone. This money is then used to pay the developers who want to improve the blockchain. The developer can suggest what he is going to change or improve and how much he wants in return. The community votes on the proposal, and if it is selected, the Treasury will deposit the requested funds into the developers’ crypto wallet.
This system helps create a sustainable structure that provides incentives to developers who want to help develop the blockchain, while also giving stakeholders and miners a reason to participate.Ethereum vs Cardano
Charles Hoskinson created Cardano after he left Ethereium. He built it with the idea of improving it over Ethereum and solving its limitations. He wanted to create a more widely accepted blockchain network and overcome the hurdles faced by Ethereium.Limited stock of coins
Ethereium has no limit on the supply of Ether coins. This means that more Ether coins will be created every year and there will be an unlimited supply of Ethereum coins.
Cardano, on the other hand, has a limited supply of 45 billion coins. Only 45 billion ADA coins will ever be produced. It makes Cardano a deflationary currency. It means that over time, as the users of the blockchain consume more coins and the supply of the coin decreases, the value of the coin will increase.Cheaper transaction costs
Ethereum is notorious for its high gas prices. It is the fee for validating and processing transactions. The high gas prices are the result of the proof of work system Ethereum uses to validate the transactions. It is slower and can only process 15-30 transactions per second. So you have to pay a high fee if you want your transaction to be validated quickly.
On the other hand, Cardano uses a Proof of Stake system and can validate multiple trades in parallel. This means that it not only saves a lot of electricity but also helps with faster processing speeds. Less resources and energy are spent on Cardano mining, therefore transaction costs on Cardano are significantly low.
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Cardano has active development plans to improve and grow. It is likely that it will grow more in the near future and appreciate in value over time. It is working on interoperability with Ethereum blockchain, allowing more Dapp projects to shift and work with Cardano. We hope we helped you explain Cardano, it works and all the features it offers.
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