Cardano is a third-generation blockchain based on Proof-of-Stake. One of the most stable, reliable and mathematically verified blockchains of our time — more than five years of operation without an outage. In the beginning of 2023 Cardano showed growth of 12%, which means that this is one of the best blockchains for сreating decentralized applications. The Cardano network is great for starting your own web 3 projects, but you have to learn about required features such as a Cardano node or installing Cardano-wallet.
How does the Cardano work
Cardano was founded by Ethereum co-founder Charles Hoskinson. He spoke of Cardano’s roadmap, technology and development as an improvement on the launch experience, success and challenges that Ethereum once experienced. Hoskinson believes that access to transparent banking will help billions of people improve their standard of living. Cardano is based on DeFi and targets some of the poorest regions of the world. Hoskinson thinks that if the technology works in these places, it will be an indicator of its success.
Cardano’s internal cryptocurrency is called ADA. It got its name from the English mathematician Ada Lovelace. It is believed that she wrote the world’s first computer program.
Any blockchain platform employs an algorithm that helps to create blocks and verify transactions. Cardano is using the Ouroboros Proof-of-Stake (PoS) consensus algorithm, which is more secure, energy efficient, and scalable than Ethereum’s Proof-of-Work (PoW).
To prevent double-spending, each of the nodes in the network records transactions. When a new transaction becomes available, it is analyzed to see if it modifies the unspent output associated with each address in the network.
The Proof-of-Concept Stake consensus eliminates the need for expensive equipment to mine new blocks; instead, there are validators — those who own the ADA cryptocurrency. They take part in the block verification procedure. They should approve the transaction before it is added to the new blockchain. Unlike PoW, PoS rewards validators for participating rather than miners. Furthermore, validators expend significantly less energy and time exclusively checking transactions, resulting in faster and cheaper transactions.
This consensus is perfect when you want to run your own nodes. Crypto enthusiasts can reach Cardano network, if they are in need of creating their web 3 project.
Features of Cardano
Cardano actively conducts scientific research and uses mathematical code testing when creating new products or performing upgrades. As a result, users of Cardano products can be assured of their reliability.
Cardano is a unique platform, and even at the development stage it was expected to be innovative. The main problems this decentralized blockchain platform seeks to solve are related to sustainability, interoperability, security and scalability.
If you’d like to start your own project using Cardano Network, you can go to NOWnodes. With it you will get aт API key that provides instant access to more than 60 blockchain networks.
Given how promising the Cardano story is in terms of growth and development, as well as its potential in the future, this digital currency is definitely worth paying attention to. As to the blockchain, it has a lot of great features:
- High scalability. Scalability is the ability of a system to function without limitation or disruption as the network load increases. Cardano blocks have the ability to scale linearly as they are used. This is accomplished through the Ouroboros (Proof-of-Stake) consensus protocol.Ouroboros divides the Cardano network into “epochs,” within which slots are located. Cardano scales by adding new slots within an “epoch” or by running multiple “epochs” in parallel.
- Interoperability with other blockchains. Cardano uses KMZ sidechains protocol technology to exchange data between blockchains. KMZ is essentially a bridge between blockchains. But the bridge is more secure and reliable, as it also works in the Cardano network, rather than being some third-party project, as it is usually arranged.
- Resilience to change and innovation. Any decentralized system (namely, according to plans of developers, the Cardano project should become such a system) runs the risk of obsolescence and degradation due to lack of managing persons, responsible for funding.
Cardano solves this problem by creating a special treasury (DAO), in which commissions are paid from the mining of new blocks. Users who contribute to the development of the Cardano network are rewarded with payments from this treasury. This means that developers will continue to work on the development of Cardano. There is no Cardano masternode, but it’s possible that it will appear in the blockchain later.
You can buy ADA tokens on any major cryptocurrency exchange (Binance, ByBit, OKX, etc.) and store tokens there as well. But it is safer to store cryptocurrency on non-custodial wallets.
Cardano cryptocurrency (ADA): features and stacking
Cardano’s native cryptocurrency trades under the ticker ADA. ADA’s main function is transfers in the Cardano blockchain. According to Messari, in September 2022, the average transfer fee was about 0.33 ADA, which equaled $0.15-$0.17.
Stacking is available for ADA. In Cardano, the delegation mechanism is built into the official wallets: Daedalus (developed by IOHK) and Yoroi (developed by Emurgo). The current yield on ADA delegation is between 3.7% and 4.2% per annum.
Staking pools are involved in the network’s consensus algorithm — Cardano now has about 3,200 of them in total (data as of September 2022). In addition to the size of the stack involved, the profitability of the pool depends on some other parameters.
Cardano blockchain is currently one of the most stable and reliable blockchain projects. For the past two years, Cardano has been unwaveringly in the top 10 cryptocurrencies by market capitalization. And during the last bull run, the ADA token showed record growth, surpassing even its main competitor, Ethereum, in terms of claims.
To interact with the Canado network in the most secure and confidential way, you can access nodes with the help of a node provider or run a Cardano node on your own.