The blockchain by far can be divided into three generations: Bitcoin & money transfer, Ethereum & smart contracts, and then the third one: “Cardano.” This one-sentence introduction of Cardano is enough to point at what kind of innovation-backed giant it is, and what kind of potential it holds. On the occasion of Cardano’s anniversary, it is important to highlight how this innovative platform is leading and contributing to the crypto industry.
What is Cardano?
Cardano is an open-source, decentralized public blockchain and crypto project. It is the brain-child of Charles Hoskinson, who is also the co-founder of Ethereum. Unlike other platforms, Cardano is backed by scientific philosophies, and the strong research work gives it the strength it holds. It is a playground of intelligent researchers and engineers who come up with innovations now and then.
Only four years ago, in 2015, it began its journey in the crypto industry. And in such a short period it has achieved mention-worthy accomplishments. The main purpose of this platform is to create a balanced and fertile ecosystem where there is a lot of scope for innovation and support for individuals and other platforms alike.
The vision that made Cardano a blockchain generation in itself
Under Cardano, three organizations work towards its development. They are:
- The Cardano Foundation: It is a non-profit custodial organization of Cardano. It “standardize, secure, and promote” the innovations from Cardano.
- IOHK: IOHK stands for Input Output Hong Kong. It is a research platform, where peer to peer innovations are used to offer better financial services. It is responsible for building, designing, and sustaining the platform.
- Emurgo: It is a Japanese company, which is responsible for developing and supporting the commercial side of the blockchain projects. For instance, it supports IOHK funding.
Cardano is not in the arena with goals that other platforms usually have. This platform rather gives more importance to “design principles, innovative engineering practices, and exploration.” The following are a few of many features that set Cardano, class, apart:
- At Cardano, accounting and computation are treated separately.
- The platform is looking into the never explored: “decentralized funding mechanism” development for the near future.
- Modular functional code is used at the core level.
- Interdisciplinary teams are used to bring about new perspectives.
- Upgrades take place swiftly without any effect on the network.
- Cardano is in for a long-haul. It is focusing on improving cryptocurrency design, on making it more secure and user-friendly
Other features include metadata for maintaining a fine balance with the legacy system, being open to learning from peers, and balancing regulators’ needs and the core features of Bitcoin.
The Five Eras of Cardano
The Cardano will be fully released by 2020. There are “five eras” as per Cardano, out of which four have been released, and one will be released by the next year. These five eras are:
- Byron Era: It allows users to transfer and trade Ada cryptocurrency. During this phase, Cardano’s main net was also released.
- Shelley Era: In this phase, they designed to achieve a smooth, low-risk transition without service interruptions.
- Goguen Era: The prime focus of this era has been the “integration” of the smart contracts.
- Basho Era: In this phase, the main focus of Cardano has been on improving the scalability and interoperability of the network.
- Voltaire Era: This one will last till 2020. The main purpose of this one is to add a treasury system and proper governance.
You must have got a fair idea of how systematically the platform functions. Now, let us have a look at what results this scientific research-based approach has fetched for Cardano.
Cardano looks at scalability in a much wider manner, that goes beyond just the number of transactions per second. In Hoskinson’s view, three elements contribute to it, and they are: Throughput, network, and data scaling. Let us look into all three to see how Cardano is contributing to these departments:
When it comes to throughput, Bitcoin and Ethereum fail to impress, with Bitcoin offering 7 transactions per second and Ethereum offering 15 to 20. Here Cardano comes in with its consensus mechanism called “Ouroboros.” It is a proof of stake algorithm which is peer to peer verified mechanism.
The proof of stake process will turn crypto mining into a virtual process and thus save a lot of energy, computation, and time.
With the increase in the number of transactions, the requirement of a solid network becomes necessary. Usually, in a network, the nodes are to relay messages. But in a decentralized network, the same structure hinders the growth of the scalability factor. Cardano, to solve this issue, has come with a technology called “RINA,” which stands for Recursive Inter-Network Architecture. John Day created RINA, aims to offer privacy, transparency, and scalability; while working in sync with TCP/IP protocols.
RNA frees the network from the dependency on too many mechanisms and offers a safe environment.
- Data Scaling
With the increase in the number of users and therefore, the increase in the number of nodes, the data storage scale on the blockchain network gets bulkier. And if not solved, this could have been another challenge for the industry. Thanks to the researchers and the engineers at Cardano, who have proposed a solution to this issue.
Cardano thinks that “Not everyone needs all the data.”, therefore, It offers simple options such as: “pruning, subscriptions, and compression.”
In addition to the above solution, Cardano also proposes “partitioning,” which allows the users to have access to a part of the blockchain rather than the entire network. Cardano does this with the help of sidechains.
To bridge the traditional financial world with the crypto world, interoperability is required. Without it, the two giants lose on their powers and stay aloof. The interconnection between the two also creates friction such as hacking, loss of efficiency during upgradation, storing a large amount of money generated from ICOs in the banks and the related clarification on the source of money, and so on. To solve this, Cardano is looking into:
- Internet of Blockchains
- Use of Sidechains that are backed by “non-interactive proofs of work.”
- Focus on the better use of metadata, attribution, and compliance.
That is one of the factors which is quite difficult to achieve, as per Hoskinson. Usually, two routes “Patronage” & “ICOs” are used to solve this issue; They both come with their own set of challenges. The former has centralization related issues, whereas the latter has sustainability issues.
That is why Cardano is taking inspiration from Dash, in respects of having a treasury. With every addition of a new block to the blockchain, a part of that gets rewarded to the treasury. The treasury keeps on filling itself as the platform progresses. But here too, issues related to voting, and decentralization of the entire process becomes a challenge. By far, Cardano has come up with two solutions to handle this issue:
- Liquid democracy,
- Incentivized treasury model.
Cardano is built on the excellence of science-based well-researched technology and philosophy. With such a grand structure functioning to solve the core issues of the crypto industry, the success of this platform is guaranteed. The competitors of this platform will need to come up with ground-breaking innovations to stand in the arena with Cardano. Wishing Cardano a happy anniversary is not only a subject of happiness, but it involves a lot of proud feelings as such a platform is the giant force, that is improving the crypto industry through every night and day. While others are playing with waves and at the most, small tides of the ocean, Cardano is standing strong in the whirlpool of the core fundamentals of the crypto industry mechanisms. With its sound approach and through preparedness backed with science, research, and technology, we can say, we are eager to see what Cardano has in store for the future. Wishing is once again a very happy Anniversary!