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What is Cardano (ADA) and why the asset became so popular

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Today, cryptocurrencies face numerous challenges, including scalability, power consumption and the ability to interact with common money. Cardano calls itself a third-generation blockchain. Your community is working to solve these issues and be better compared to its predecessors like Bitcoin and Ethereum.

Currently, Cardano (ADA) is the fourth largest cryptocurrency by market capitalization.

What is Cardano?

You’ve heard about first and second generation cryptocurrencies, right? Cardano calls itself “the first cryptocurrency of the third generation”. Like Ethereum, Cardano aims to be a platform where people can create autonomous contracts.

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It was created by a team led by Charles Hoskinson, in an attempt to create a “more balanced and sustainable ecosystem” for cryptocurrencies. Originally developed as a research project, Cardano has evolved into a blockchain platform in its own right.

Its creators believe that blockchain standalone contracts such as Ethereum face challenges related to scalability and interoperability, and that these challenges can be better addressed by a new platform, built from scratch.

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The main responsible for the creation of Cardano is Charles Hoskinson, one of the co-founders of Ethereum.

A brief overview

In 2015, Cardano started as a research project to explore how cryptocurrencies could be improved.

On September 29, 2017, the Cardano team released the Byron phase to the public, which only provided support for transactions with the ADA token.

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In July 2020, the Shelley phase was launched, which improved the network’s decentralization, meaning investors could staking the ADA.

Goguen, the third phase, implemented autonomous contracts through the bifurcation (or “hard fork”) Alonzo and the native issuance of tokens.

The remaining stages are Basho, which focuses on scalability, and Voltaire, which handles blockchain governance.

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The name of the stages of Cardano pays homage to English poets. The network has already completed the Byron and Shelley stages and is now in the Goguen stage.

What is so special about Cardano?

The team behind Cardano was inspired by the world of scientific publishing and adopted its peer review approach to its cryptocurrency.

Thus, all changes and new features presented are developed, reviewed and approved by academics before being used, including Ouroboros, the consensus algorithm of the network.

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The network code is written in the Haskell programming language, used by companies including Bank of America (BofA) and the telecommunications company American Telephone and Telegraph (AT&T).

Input Output (IOHK), the company behind Cardano’s development, has published numerous academic articles describing the platform and its technology.

But not only that!

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Currently, the Ethereum network uses the proof of work (PoW) consensus mechanism to verify transactions, which uses a lot of electricity and can only process a limited number of transactions at a time. Cardano uses proof of stake (PoS), which consumes less energy.

The network uses an algorithm called Ouroboros to choose who creates the next block and to validate blocks (the Ethereum 2.0 update will make Ethereum move to proof of stake soon).

Proponents of the proof of stake algorithm believe that a consensus mechanism focused on staking makes blockchain networks more secure while significantly reducing their power consumption and carbon footprint.

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“If we hit proof of stake, the network will be 250 times more decentralized than Bitcoin,” said Charles Hoskinson.

Developer IOHK has already made progress in managing identity and traceability, announcing numerous partnerships.

In 2019, IOHK teamed up with shoe manufacturer New Balance to address sneaker counterfeiting, allowing customers to confirm the authenticity of products using the Cardano blockchain.

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In April 2021, the company entered into a partnership with the Ethiopian government to present a digitization solution that will be implemented in schools.

Ultra-fast transaction timings and interoperability with other blockchains are also being developed.

What are Cardano’s other differentials?

Cardano consists of three parts:

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1) Cardano Foundation: supports the research and development of the network;

2) IOHK: company that works together with several research and development universities;

3) Emurgo: distinct company that was hired to work on the blockchain and make it more commercially attractive.

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How is ADA produced?

ADA, Cardano’s coin, is a tribute to Ada Lovelace, a 19th century mathematician recognized as the first programmer, in addition to being the daughter of the poet Lord Byron.

Cardano’s ADA currency is not mined like Bitcoin. Instead of miners, there are validators, which are chosen by the network based on how much ADA they have.

If they are selected to validate block transactions, they present a bet on how confident they are in verifying all transactions. If the blockchain checks the validator’s block, the validator wins the bet and is rewarded in ADA.

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What is Ouroboros?

Ouroboros is the algorithm that defines Cardano, the first blockchain protocol to be based on polls by party review, in addition to the project’s proof of stake solution.

Basically, the consensus protocol supports Cardano’s ability to be a decentralized proof of stake platform. It is used to ensure network security, validate transactions and issue new ADA tokens.

It was created by a team led by Charles Hoskinson, in an attempt to create a “more balanced and sustainable ecosystem” for cryptocurrencies. Originally developed as a research project, Cardano has evolved into a blockchain platform in its own right.

Advertisement

Its creators believe that blockchain standalone contracts such as Ethereum face challenges related to scalability and interoperability, and that these challenges can be better addressed by a new platform, built from scratch.

The main responsible for the creation of Cardano is Charles Hoskinson, one of the co-founders of Ethereum.

A brief overview

In 2015, Cardano started as a research project to explore how cryptocurrencies could be improved.

Advertisement

On September 29, 2017, the Cardano team released the Byron phase to the public, which only provided support for transactions with the ADA token.

In July 2020, the Shelley phase was launched, which improved the network’s decentralization, meaning investors could staking the ADA.

Goguen, the third phase, implemented autonomous contracts through the bifurcation (or “hard fork”) Alonzo and the native issuance of tokens.

Advertisement

The remaining stages are Basho, which focuses on scalability, and Voltaire, which handles blockchain governance.

The name of the stages of Cardano pays homage to English poets. The network has already completed the Byron and Shelley stages and is now in the Goguen stage.

What is so special about Cardano?

The team behind Cardano was inspired by the world of scientific publishing and adopted its peer review approach to its cryptocurrency.

Advertisement

Thus, all changes and new features presented are developed, reviewed and approved by academics before being used, including Ouroboros, the consensus algorithm of the network.

The network code is written in the Haskell programming language, used by companies including Bank of America (BofA) and the telecommunications company American Telephone and Telegraph (AT&T).

Input Output (IOHK), the company behind Cardano’s development, has published numerous academic articles describing the platform and its technology.

Advertisement

But not only that!

Currently, the Ethereum network uses the proof of work (PoW) consensus mechanism to verify transactions, which uses a lot of electricity and can only process a limited number of transactions at a time. Cardano uses proof of stake (PoS), which consumes less energy.

The network uses an algorithm called Ouroboros to choose who creates the next block and to validate blocks (the Ethereum 2.0 update will make Ethereum move to proof of stake soon).

Advertisement

Proponents of the proof of stake algorithm believe that a consensus mechanism focused on staking makes blockchain networks more secure while significantly reducing their power consumption and carbon footprint.

“If we hit proof of stake, the network will be 250 times more decentralized than Bitcoin,” said Charles Hoskinson.

Developer IOHK has already made progress in managing identity and traceability, announcing numerous partnerships.

Advertisement

In 2019, IOHK teamed up with shoe manufacturer New Balance to address sneaker counterfeiting, allowing customers to confirm the authenticity of products using the Cardano blockchain.

In April 2021, the company entered into a partnership with the Ethiopian government to present a digitization solution that will be implemented in schools.

Ultra-fast transaction timings and interoperability with other blockchains are also being developed.

Advertisement

What are Cardano’s other differentials?

Cardano consists of three parts:

1) Cardano Foundation: supports the research and development of the network;

2) IOHK: company that works together with several research and development universities;

Advertisement

3) Emurgo: distinct company that was hired to work on the blockchain and make it more commercially attractive.

How is ADA produced?

ADA, Cardano’s coin, is a tribute to Ada Lovelace, a 19th century mathematician recognized as the first programmer, in addition to being the daughter of the poet Lord Byron.

Cardano’s ADA currency is not mined like Bitcoin. Instead of miners, there are validators, which are chosen by the network based on how much ADA they have.

Advertisement

If they are selected to validate block transactions, they present a bet on how confident they are in verifying all transactions. If the blockchain checks the validator’s block, the validator wins the bet and is rewarded in ADA.

What is Ouroboros?

Ouroboros is the algorithm that defines Cardano, the first blockchain protocol to be based on polls by party review, in addition to the project’s proof of stake solution.

Basically, the consensus protocol supports Cardano’s ability to be a decentralized proof of stake platform. It is used to ensure network security, validate transactions and issue new ADA tokens.

Advertisement

Ouroboros divides transactions into “epochs” which, in turn, are divided into time “slots”. A slot leader is elected to take care of each time slot and is responsible for adding a block to the blockchain. A new slot leader needs to consider the latest blockchain blocks as transient. This is known as “delay of settlements” and is the mechanism by which registration is transferred, in a secure way, between participants.

How to acquire ADA?

Among the top ten cryptocurrencies, you can buy or trade ADAs at the top crypto brokers, including Coinbase, Binance, Kraken and eToro.

What is ADA for?

Although you can buy and trade ADA just like any other cryptocurrency, and used to pay transactions on the Cardano blockchain, it is not considered a currency, just like bitcoin, which can be used to purchase goods and services.

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On the Cardano platform, users need to purchase ADA to make transactions, participate in governance, become a slot leader and get a share of fees paid for transactions.

“[Cardano] does everything we wanted to do using cryptocurrencies, which is to create an operational financial system for people who don’t have access to one — one that can really compete with the global financial system,” explained Hoskinson.

In July 2020, the Shelley update enabled delegate staking. For the first time, ADA holders could pool their coins with other users to earn interest on the cryptocurrency.

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The Alonzo Bifurcation

In September 2021, the main Alonzo network was launched, integrating standalone contracts with Cardano.

The launch allows Cardano to be on the same level as other blockchains that use autonomous contracts, such as Ethereum, which has been using autonomous contracts since 2015. Hoskinson, the founder of Cardano, said that Alonzo would usher in “a new era of Cardano”.

However, the launch of the Alonzo fork did not go smoothly.

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The first decentralized application (dapp) launched on the platform, a multipool brokerage called Minswap, was forced to suspend its activities shortly after its launch, as it had problems processing multiple transactions at once.

IOHK denied accusations that dapp had problems performing simultaneous transaction processing, describing these criticisms as “total FUD [‘medo, incerteza e dúvida’] and misinformation”.

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In one publication, IOHK argued that Cardano’s stand-alone contract design is a feature rather than a flaw, resulting in improved security and a reduced possibility of unexpected fees and concurrency issues such as those faced by Minswap, can be avoided.

The future of Cardano

Issuing ADA consumes a fraction of the energy needed to produce bitcoins. As such, Cardano is one of a number of proof-of-stake cryptocurrencies to benefit from a new emphasis on more sustainable crypto references after Elon Musk, CEO of Tesla, debated the issue.

In May 2021, shortly after Musk’s announcement that Tesla would no longer accept bitcoin as a means of payment, “sustainable” cryptocurrencies, including Cardano, soared to new record highs.

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In July, digital asset manager Grayscale added ADA to its fund with the largest capitalization cryptocurrencies (GDLC).

In September, a report published by VC Outlier Ventures revealed that Cardano is barely behind Ethereum in terms of monthly active developers, as Cardano dominated most monthly contributions on GitHub between July 2020 and June 2021.

At the recent Cardano Summit virtual conference, Hoskinson debated Cardano’s future to an audience of digital avatars, announcing a dapp store for the network, as well as a mobile wallet and integration with Chainlink.

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Despite the problems facing Alonzo, if Cardano proves that its rigorous approach to cryptocurrencies can draw big companies into the blockchain world, the network could be at the forefront of a crypto revolution in the coming years.

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Cardano

Here’s What Cardano Founder Charles Hoskinson Wants For Christmas

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Christmas is just around the corner and Cardano founder Charles Hoskinson is already in the Christmas spirit. The founder went live on YouTube on Monday to do another surprise AMA where he answered questions from the community. As usual, Hoskinson responded to a number of questions from community members who asked about the Cardano project.

What Cardano Founder Wants For Christmas

During the AMA, Hoskinson gave a rundown of what he would like for Christmas and it was not your usual itemized list of stuff people want for Christmas. Instead, Hoskinson decided to address a pressing issue in the crypto space and that is the divide that is very much present among investors of different projects.

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Cardano has been one of the harder hit projects when it has come to FUDs in recent times. The project had been subjected to what can be described as hateful comments all-around social media especially since its token ADA began its two-month-long decline. To this end, Hoskinson wants everyone in the crypto industry to start getting along.

“The one thing I want for Christmas is for everyone to start getting along in our industry. It’s extraordinary to me that when people are so close in philosophy and viewpoint, and in some cases technology, they can be so far apart as people. It’s extraordinary,” the founder said.

Cardano price chart from TradingView.com
ADA trending low at $1.4 | Source: ADAUSD on TradingView.com

Pushing For Better Systems Going Forward

Hoskinson also addressed the systems that have kept investors against each other for years. He said that the crypto space is where this is more prominent as other industries do not see as much hate between each other as the crypto industry.

“You don’t see this in other industries,” Hoskinson said. “You don’t see in physics or biology, or cellphone manufacturing, or whatever, pick an industry, the amount of tribalism, hate, and vitriol that our industry has for each other.”

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The founder went on to explain that as long as people keep hating each other, there will be no way to fight the real enemy, which he identified as the legacy systems. He said this system has held down three billion people and will continue to do so. The founder also acknowledged that this will not be easy as there will always be those who try to divide others in the space.

Hoskinson explains that there will be books and podcasters saying things to divide people. Even on social media, where the majority of the vitriol will be spilled. However, it is up to everyone in the industry to take a stand and put a stop to the hate.

“That has to stop and the only way it’s going to stop is if we get better systems that are more fair. And the only way we do that, is we have to work together. So, we’ll see, 2022, whether that’s accomplished.”

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Cardano Launches Converter Testnet for Project by AI Pioneer Behind Robot Sophia

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The AGIX ERC20 converter has been launched in testnet mode.

Holders of SingularityNET’s AGIX token can now ditch Ethereum and migrate to the Cardano blockchain.

According to a Dec. 7 announcement made by Input Output, its AGIX ERC20 converter has now launched in testnet mode.

ERC20 tokens can be converted into the new format and transferred to ‎EMURGO’s Yoroi or Input Output’s Daedalus.

SingularityNET functions as a blockchain-powered artificial intelligence marketplace that aims to enable seamless monetization of various AI services.

Its utility token was initially launched on the Ethereum blockchain under the AGI ticker. In May, it was revamped to Cardano-compatible AGIX.

SingularityNET is helmed by AI trailblazer Ben Goertzel, who is famous for working on humanoid robot Sophia while he was the chief scientist at Hong Kong-based firm Hanson Robotics.

Goertzel said that migrating to Cardano will allow the project to add new functions:

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The importance of this port for SingularityNET and the whole blockchain and AI ecosystems cannot be overestimated – it will yield not only a far faster and more economical AI network but also a massively superior foundation for adding advanced new functions to SingularityNET and moving toward realizing our vision of decentralized AGI.

The partnership between SingularityNET and Cardano was announced last September. The AI project, however, is not completely giving up on Ethereum: its users will have to pick the preferred platform.

In September, the Cardano blockchain was integrated into Grace, the SingularityNET humanoid robot nurse that aims to disrupt eldercare.

Input Output is also working on allowing users of other blockchains to migrate their tokens to Cardano.

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Cardano price remains trending downwards while crypto markets rebound

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  • Cardano price is paring back losses that occurred last weekend. 
  • ADA price is still trending lower in line with a very well-respected trend line.
  • Expect bulls to test and try to break $1.67, depending on the strength of the tailwinds.

Cardano (ADA) price has been declining since mid-November when its trend accelerated in the spillover from the Bitcoin flash crash. Now ADA price sees bulls returning to the scene as Cardano trades at an attractive discount. It is possible this may be a short-term reaction, however, as the downtrend is technically still in play, and buying volume will only pick up once bulls break above $1.67 to the upside.

Cardano investors sidelined as downtrend still active

Cardano price has already lost 51% of its value since the high of November when it reached $2.40. ADA would be expected to see quite some inflows from investors and buyers at the current price who may be looking to pick up some interesting cryptocurrencies at a discount. However, the uptick in buying volume is mild as traders know that the downtrend in ADA is still very much alive, with the black descending trend line acting as a reference for that trend.

ADA price will see investors start to buy back in once bulls can break above $1.67 around the intersection from the descending black trend line and a historical level that has been well respected since June. The two false breakouts on December 2 and 3 will make investors nervous, and would only see them starting to buy in when the price can consolidate above that level. That push higher will depend on whether the current tailwinds linked to the rebound in global equity markets extends.

ADA/USD daily chart

ADA/USD daily chart

ADA bulls will, therefore, be closely watching for any breaks and the behavior of price action around $1.67. Once through there, expect bulls to quickly face further resistance at $1.90, with the 200-day and 55-day Simple Moving Average merging just above that level. So, price action is facing some pretty hefty resistance.. Should current tailwinds start to fade once again, expect a quick dip back below the red ascending trendline near $1.30, and a further correction towards $1.0.

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