Cardano At a Glance
Cardano (ADA) has now become the 5th largest cryptocurrency with a market capitalization of over $25 billion (CoinMarketCap). It’s making headlines this week along with Stellar, another newcomer to the top 10 cryptos, Currently, it is trading at $1.00. This is around a 30% growth just within the last few days. Cardano functions as an open-source, decentralized platform. Its blockchain has been implemented using the Haskell programming language, which is supposed to maximize security. Haskell is a purely functional programming language, like Python.
Users of its platform will be able to take advantage of its “complex programmable transfers”, which promise to offer scalability. Scalability, as most crypto investors know, has been one of the areas of concern with bitcoin. Cardano is the product of a collaboration between, IOHK, a blockchain development company, and the University of Edinburgh, the University of Athens, and the University of Connecticut to name a few.
How Does It Work?
Unlike bitcoin, which works on the proof-of-work algorithm, Cardano uses the proof-of-stake algorithm (PoS). Its version of the PoS is called Ouroboros, which is backed up by peer-reviewed academic research. Designers of the platform have divided its implementation into two layers: the Settlement Layer and the Control Layer. The Settlement Layer manages the public ledger along with the transactions between accounts. The Control Layer executes smart contracts (terms and conditions of transactions) and runs distributed applications.
One of the benefits of having two layers is that the privacy of transactions is enhanced. Since the Control Layer exclusively contains transaction data, additional information (metadata) is not required. Updates can be formed more efficiently, because you can zone in on the part you want to update (the control or settlement layer). The next big update to the Cardano platform is due sometime in the 2nd quarter of 2018. Among other things, this update (called Shelley) will fully decentralize everything. It’s quite possible that the Shelley update, along with other scheduled updates, could bring about further increases in price and value.
Why Has It Become So Popular?
There could be a number of reasons for Cardano’s rise. One reason might be that the platform intends to offer support for smart contracts programmed using Ethereum’s Solidity language. This, obviously, creates much more flexibility and makes Cardano more friendly towards other platforms. Perhaps another reason why is that more people are realizing that the Ouroboros PoS protocol has proven itself mathematically to be secure. Furthermore, most of Cardano’s other technology and components have gone through comprehensive academic peer-reviews.
Even though Cardano is backed up by a reputable academic community, a long and proven industry track record is something that it lacks. Ethereum, one of its main competitors, is clearly more established. The level of competition will continue to rise as newer technologies are introduced to the cryptocurrency market. It will become more and more like the survival of the fittest.