What Is Cardano (ADA)?
With respect to market capitalization, Cardano (ADA) is one of the most significant digital currencies in the crypto ecosystem. The coin’s abbreviation is named after the famous 19th-century mathematician Ada Lovelace. She was among the first computer programmers in the world.
Cardano is a public blockchain platform, and ADA is the cryptocurrency associated with this platform. It is an open-source, decentralized solution that works on the proof-of-stake concept. This digital currency has adopted the idea of Ethereum to develop a next-generation platform.
The Cardano blockchain provides a decentralized, sustainable, flexible, and scalable platform. It is designed to run smart contracts and support the development of decentralized financial applications.
Who Created Cardano (ADA)?
Cardano was launched in the year 2017 and is considered the third-generation cryptocurrency. This digital currency was launched to improve the functionality of Ethereum. It worked towards all the factors missing in the second-generation cryptocurrencies.
The co-founder of Ethereum, Charles Hoskinson, is the founder of Cardano. After falling out with Vitalik Buterin, the founder of Ethereum, he started his digital currency. He created the new generation of cryptocurrency to provide a more scalable and sustainable blockchain environment.
How Does Cardano (ADA) Work?
When Cardano was founded, the main goal was to create a sustainable blockchain network. For this reason, this digital currency works with the Proof of Stake concept rather than Proof of Work.
The PoW concept is not environmentally friendly and energy-intensive. This concept is used by major cryptocurrencies such as Bitcoin and Ethereum. In the PoS concept, however, validators stake their own coins, making it more environmentally friendly.
To verify all transactions, the blockchain network requires a foolproof method. Since there is no central bank, the underlying technology should do the work. In the PoS concept, validators use their ADA coins to stabilize the network and verify transactions.
Here is how validators stake their data and secure the blockchain platform.
- This network rewards the participant who has invested the most in the platform with coins. Cardano network chooses the winner based on the number of Cardano coins a validator has in the pool. The amount of time is also taken into account.
- The selected winner then validates the transaction made on the blockchain network. Other validators in the network must also confirm this validation. When enough confirmations are made, the platform updates the public ledger.
- When the blockchain is updated, validators who participated in the process are rewarded with ADA. These rewards are distributed based on their stake.
The Cardano network is divided into two layers – CCL and CSL. These two layers allow the platform to validate millions of transactions every second. The Cardano Computing Layer is where all the computations are performed by apps running through this blockchain. On the other hand, the Cardano Settlement Layer manages the public ledger of accounts and balances.
Is Cardano (ADA) a Good Investment?
Cardano is undoubtedly one of the more stable coins that offer promising applications in the blockchain network. Some factors determine the value of this coin. Since the number of ADA coins is limited, they are inflation-proof. This implies that the more coins are mined, the more demand will increase.
While the decentralized aspect of this digital currency makes the platform secure, the multi-layered architecture makes it scalable. This makes this cryptocurrency one of the most trusted coins on the market, with great potential.
Another reason why Cardano is a beneficial investment is the trust investors have in this digital currency. ADA was developed by one of the co-founders of Ethereum, the second-largest cryptocurrency in the world. This boosts investor confidence in the technology behind the Cardano network.
The success of the Cardano app also depends on the number of decentralized applications developed on the platform. The platform would grow continuously with many start-ups working in this field. In conclusion, Cardano has a good chance of making its mark in the blockchain industry.
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