What is Cardano?
A peer-reviewed cryptocurrency being built by a scientist may be the next big thing
Though it had predecessors, Bitcoin is considered a 1st-generation cryptocurrency. It was followed up by 2nd-generation coins that added new features or that sought to improve areas where Bitcoin was lacking, such as making it more scalable or more private. These 2nd-gen coins were usually just forks of Bitcoin, or at least borrowed heavily from it.
Even newer, 3rd-generation coins have learned from what was built before, and often start their coding from scratch to avoid the mistakes inherent in older coins.
Cardano – Built with the Scientific Philosophy
One of the youngest, Cardano, has taken this to a whole new level. Not only is it implemented from scratch in the Haskell programming language, it’s following a process of scientific peer review to ensure that they build a cryptocurrency that is more scalable and secure than anything that has come before.
Cardano, and its developer IOHK, have released a number of scientific papers that have undergone peer review in the scientific community, incorporating feedback from cryptographic, mathematics, and Infosec experts along the way. The hope is that this process will lead cryptocurrency able to handle future demands better than existing currencies:
As a corollary, enterprise users cannot commit millions of dollars worth of resources to protocols where the roadmap and actors behind them are ephemeral, petty or radicalized. There needs to be an efficient process through which social consensus can form around a vision for evolving the underlying protocol. If this process is enormously burdensome, fragmentation could break the community apart.
The key underpinning of the Cardano network, and it’s currency, Ada, is Ouroborus, a secure proof-of-stake system that defines how nodes in the network reach consensus about the state of the Ada ledger. Other cryptocurrencies use proof-of-stake, but Ouroborus is designed to prevent bad actors from exploiting issues that may exist in proof-of-stake systems that are not utilizing high-quality randomness.
You can read the Oroborus White Paper for more details.
Following software development best practices, Cardano is being built in layers. The Cardano Settlement Layer (CSL) handles accounting, meaning moving payments between users, and the Cardano Computation Layer (CCL) handles computation via Smart Contracts. Additionally, Cardano aims to develop side-chains which will be able to interact with the main Cardano network but run domain specific tasks locally.
Governance and Funding
Cardano plans to implement a funding mechanism similar to Dash, but more cryptographically secure. A portion of all newly minted Ada will be placed into the Cardano treasury and can be dispersed to fund proposals voted on by users in the blockchain. Proposals may range from funding the development team to implementing new features in the network.
Its still very early days for Cardano, which launched to the public at the end of September 2017. The system is currently highly centralized – you can’t mine Cardano yet, as that feature isn’t planned until Q2 2018. And while work on the computation layer has begun, there isn’t even a date yet set for its release.
If you’re interested in using Cardano, or storing Ada, you can use the Cardano wallet – Daedelus.