Cardano is one of the most established blockchains in the industry. The highly performant ADA token has seen tremendous adoption with the introduction of Cardano staking. There is a great deal of excitement surrounding the platform as we enter the penultimate phase of the Cardano roadmap. This will see the introduction of Cardano smart contracts, which will propel the platform into the world of decentralized finance (DeFi).
In this article, we’re going to dive deep into the Cardano ecosystem. Plus, we’ll look at the ADA token, Cardano smart contracts, Cardano staking, and the Cardano roadmap.
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What is Cardano?
Cardano is a third-generation blockchain platform that uses the Ouroboros Proof-of-Stake (PoS) consensus mechanism. Ouroboros is the first PoS consensus mechanism to be proven to be secure. Also, Cardano is the first blockchain to use peer-reviewed research to develop sustainable and secure technologies using evidence-based methods. Cardano aims to empower businesses and individuals by promoting human betterment, positive change, and societal progress.
Furthermore, Cardano aims to be a highly scalable development platform for decentralized applications (dApps) using a multi-asset ledger and verifiable smart contracts. Developed by Ethereum co-founder Charles Hoskinson in 2015 and launched in 2017, the Cardano development community takes heavy influence from academic research.
Each stage of the Cardano roadmap undergoes stringent testing and auditing before sharing with the public. Though this has attracted criticism from some in the broader crypto community, the Cardano community has remained faithful in the pursuit of a provably secure, diverse, and scalable blockchain. Now, the Cardano community is bracing for the next step in the Cardano roadmap. After several years and many doubters, Cardano is on track to be among the top smart contract-enabled blockchains in the industry.
Furthermore, IOHK and the Cardano engineering community show continuous commitment to providing a low-cost, scalable, and interoperable platform. Moreover, both parties focus on avoiding excessive energy consumption, high network fees, and slow transaction confirmations.
Cardano has three main partners. Each of these partners plays a crucial role in the development and expansion of the platform. From community engagement, platform maintenance, and technological advancement, these bodies are largely responsible for the reputation and success of the Cardano ecosystem.
The Cardano Foundation
The Cardano Foundation is the legal custodian of the Cardano protocol and owner of the Cardano brand. Also, the Cardano Foundation is an independent standards body that is responsible for the growth and development of the Cardano ecosystem. The goal of the Foundation is to increase the adoption of the Cardano community and help inform legislation and industry standards.
Promoting adoption of the Cardano platform, the Cardano Foundation focuses on implementing new ideas and engaging with the broader blockchain community. Furthermore, the Cardano Foundation includes a governing council. The governing council plays a major role in the governance of the Cardano platform until the final phase of the Cardano roadmap is complete.
EMURGO is a founding member of the Cardano protocol and works as the “for-profit arm of Cardano”. With offices across the world, EMURGO creates commercial opportunities by assisting businesses in integrating Cardano’s technologies. Furthermore, EMERGO boasts an extensive network of industry partners working to drive the adoption of blockchain industrywide, including finance, healthcare, supply chain management, retail, and the internet of things (IoT).
As the brainchild of Charles Hoskinson and Jeremy Wood, IOHK (Input Output Hong Kong) is a technology and engineering company that creates cryptocurrencies and blockchain infrastructures for enterprises, governments, and academic institutions. IOHK is responsible for the designing, building, and maintenance of the Cardano network.
Furthermore, IOHK comprises a global network of dynamic teams working toward a shared goal of “delivering the highest standards in software engineering based on rigorous peer-to-peer reviewed science”. As a leader in distributed computing systems, IOHK is pushing the boundaries in cryptographic research and cryptocurrency architectures.
With a commitment to open-source principles and decentralization, IOHK aims to create ethical, purpose-driven technologies that benefit society. Blockchain education is paramount to IOHK. As such, IOHK promotes the academic study and research of blockchain technology for various use cases.
IOHK & Cardano Technology
Rather than adapting the technologies from legacy blockchains, the underlying technology behind Cardano features development by world-leading researchers and academics. Most of this technology is subject to rigorous academic peer review. This process enables Cardano and IOHK to assess the possibilities and limitations of these technologies and how best to implement them.
Alongside a world-leading team of researchers, Cardano also works with a technical prototyping team. This team works through experimenting with implementations and functions as a result of the research. The aim of this is to learn about the real-world functionalities of technical implementations and iron out any issues before building and launching new products.
Using the results and findings from this research and prototyping, the Cardano and IOHK development community create and publish technical specifications to outline how technologies should function and behave. This ensures that final implementations of Cardono’s technologies still align with the initial goals outlined by the previous research initiatives and that all products can feasibly achieve their desired functionality.
Furthermore, Cardano and IOHK engineers use formal development methods to create highly advanced and accurate mathematical testing techniques. Many of these techniques seldom operate outside of high-risk applications such as space flight and advanced banking software. This ensures that any software or technology available works precisely as it was intended to.
Moreover, IOHK uses functional programming languages such as Haskell to minimize ambiguity and human error. Such programming languages are much easier to test than other programming languages, adhering to Cardano’s rigorous testing and auditing processes.
The ADA Token
The cryptocurrency underpinning the Cardano Proof-of-Stake (PoS) consensus mechanism is ADA. Sometimes people refer to this as the ADA token. The ADA token takes its name from the 19th-century mathematician Ada Lovelace. Ada Lovelace is the daughter of renowned poet Lord Byron and is widely recognized as the first-ever computer programmer.
Anybody can access the ADA token anywhere in the world as a secure medium of exchange that does not rely on intermediaries. Plus, all ADA token transactions are transparently and immutably stored on the Cardano blockchain.
Also, with the introduction of Cardano smart contracts and the various decentralized applications (dApps) they will service, the ADA token will play a crucial role as a base currency across an emerging DeFi ecosystem. Just as ETH is essential for interacting with Ethereum-based dApps, ADA tokens will be required to use many Cardano-based applications.
The ADA token has seen tremendous price action in recent months, firmly establishing itself as a top 5 cryptocurrency. At the time of writing, the ADA token is trading at around £3, after reaching a new all-time high of $3.09 in September 2021. According to CoinGecko, the ADA token is the third-largest cryptocurrency, with a market cap of $97 billion.
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All ADA token holders can participate in Cardano staking. Using the novel Ouroboros Proof-of-Stake (PoS) consensus mechanism, Cardano staking plays a crucial role in securing the network. Also, ADA holders that don’t wish to participate in Cardano staking can pledge their stake to a stake pool and receive rewards in return.
The Cardano roadmap consists of five phases; Byron, Shelley, Goguen, Basho, and Voltaire. Below we discuss the key features of each phase of the Cardano roadmap and what they aim to achieve.
Phase 1: Byron
The first phase of the Cardano roadmap marking the launch of the Cardano blockchain is Byron. This was Cardano’s minimally viable product (MVP) that enabled users to send and receive transactions.
Phase 2: Shelley
Phase two of the Cardano roadmap is Shelley. With much anticipation surrounding its release, the Shelley update marked the beginning of Cardano staking. In the months leading up to the Shelley release, the market cap of the ADA token saw a substantial increase. Since, it has remained firmly in the top 5 cryptocurrencies by market cap.
The primary goal of the Shelley milestone was to make the Cardno blockchain decentralized. Initially, the Cardano network was operating with a small group of validators before the implementation of Shelley. However, the introduction of Cardano staking along with the Proof-of-Stake consensus mechanism means that anyone can become a Cardano validator. Not only does this open up doors for earning a passive income from staking rewards, but it also makes the Cardano network more secure and robust.
Phase 3: Goguen
The Goguen update will enable smart contract compatibility on the Cardano blockchain. Using the Marlowe programming language, people with little or no programming knowledge will be able to create and execute smart contracts on the Cardano blockchain. Also, Goguen will introduce cross-chain token support to Cardano with the ERC-20 converter. This will allow users to ‘translate’ Ethereum-based tokens into Cardano-compatible tokens of the same value. Furthermore, users can seamlessly convert these tokens back to ERC-20 tokens, facilitating interoperability between blockchains and decentralized applications (dApps).
Phase 4: Basho
The Basho milestone will see the use of sidechains on the Cardano blockchain. The aim of this is to enable greater scalability and higher throughput throughout the Cardano ecosystem. Sidechains work by taking transactions off the main Cardano chain onto a separate sub-network. Sidechains periodically batch together transactions to send to the main chain to validate. This helps save computational resources on the Cardano blockchain to prevent network congestion, slow transaction times, and high network fees. To learn more about sidechains, save our Polkadot article for later!
Phase 5: Voltaire
Voltaire is the final stage of the Cardano roadmap. This will introduce decentralized governance to the network, enabling ADA token holders to vote on proposals to make changes to the protocol. Also, ADA token holders will have a say on how the Cardano treasury should use funds and the areas of development that should take place throughout the network.
Cardano Smart Contracts
On September 12, 2021, the Alonzo hard fork will enable Cardano smart contracts to become fully operational on mainnet as part of the Guegen update. Furthermore, The introduction of Cardano smart contracts will open up a whole new ecosystem of decentralized finance (DeFi) platforms. In the coming months, we can expect to see a wide range of decentralized applications (dApps) using Cardano smart contracts.
What is Cardano? Summary
Competition in the blockchain space is fierce. Many blockchains and decentralized finance (DeFi) protocols rush to get products to market. However, Cardano has been focusing on comprehensive testing and auditing for several years. Rather than testing in production with half-ready applications and protocols, Cardano’s peer-reviewed technology and evidence-based methods position the platform as one of the most reliable and robust blockchains in existence.
Furthermore, the introduction of Cardano smart contracts positions the platform to become one of the most prominent smart contract-enabled blockchains. As such, numerous decentralized finance (DeFi) platforms are lining up and waiting for Cardano to burst onto the DeFi scene. Moreover, the implementation of Cardano smart contracts and cross-chain interoperability are the penultimate steps in the Cardano roadmap.
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