Cardano Launches ADA to Tackle Issues Plaguing Ethereum
The Cardano blockchain network launched digital currency ADA, named after Ada Lovelace, who wrote the first computer program.
ADA is fast, secure and has low fees. Cardano, however, is more than just a digital currency network. It is also a platform that can run decentralized applications (dApps). These dApps add functionality to the network, similar to adding functionality to our smartphones by through mobile apps.
A global team of academics and engineers designed Cardano specifically with the aim to solve problems inherent to other digital currencies. Their research was published in a series of academic papers tackling issues of scalability and security.
The team behind Cardano was led by its CEO Charles Hoskinson, who is a co-founder of Ethereum.
Charles’ concept with Cardano was to take the technology behind Ethereum and push it even further. Creating Cardano with the intent of improving on what he learned from Ethereum has led to many calling Cardano the Ethereum Killer.
A secure proof-of-stake protocol
Cardano’s network consensus is provided by a proof-of-stake protocol called Oroborus.
The original digital currencies like Bitcoin used a proof-of-work consensus model. In a proof-of-work network, consensus is provided by a process called mining. Users on the network donate CPU power to process transactions on the network and receive rewards for their efforts in the form of blocks of digital currency.
Proof-of-work mining is raising concerns over the environmental impact created by the vast amounts of electricity used to maintain the network. Many digital currencies, in response, are moving towards a proof-of-stake consensus.
Proof-of-stake consensus, on the other hand, provides consensus virtually.
Rather than donating CPU power to maintain the network, people stake their ADA and are rewarded with more ADA in a ratio equal to the percentage of ADA they are staking. Someone with 1% of the total ADA would be rewarded with 1% of the total rewards on the network. This model is similar to collecting a dividend from a traditional stock.
The one problem with proof-of-stake currencies, though, is they potentially are less secure than proof-of-work currencies.
Cardano claims to be the first provably secure proof-of-stake network. Cardano is confident in making this claim because they say all of the code has been thoroughly vetted by some of the world’s leading mathematicians and engineers.
Overcoming scaling issues
A major hurdle for digital currencies has been their ability to scale. The recent surge in Bitcoin’s popularity led to bottlenecks in the network and skyrocketing fees. One proposed solution to the scaling issues of Bitcoin is the lightning network.
The decentralized nature of Bitcoin, though, makes changing it very hard since the whole network must agree. The process often draws comparison to changing the wheels on a moving car.
Cardano’s major advantage is that they solved the scalability issues before deploying the blockchain. This ultimately saves them the need to ‘change the wheels on a moving car’.
The solution they came up with is implementing multiple blockchains on top of each other.
If transactions on a blockchain were like cars on a road, then having a single blockchain is like having one road to leave a city. Should everyone try to leave the city at once, they will likely create a traffic jam. If you have multiple blockchains (‘highways’) running concurrently, when one road out of the city is busy you can choose a road that has less traffic on it.
Real world test of Cardano
The main network of Cardano launched September 29th, 2017. Since then, the network garnered a lot of attention from the digital currency community, impressed by the team’s desire to create a truly scalable, secure and dependable blockchain platform.
Since its launch in September, the currency ADA quickly rose to rank 5th in overall market cap, beating out Litecoin.
The next stage of their road map launched January 4th, 2018. Planned upgrades include increased security and dependability while reducing the risk of vulnerabilities.
Still new on the scene, Cardano will have to see if the research leads to real world results.
Cardano teamed up with GRNET, according to Bitcoin Magazine, to provide the platforms first use case for its dApp technology. The Greek based GRNET designed a dApp which will store information regarding university degrees on the Cardano blockchain.
An ethereum killer?
Time will tell if Cardano is really the ‘Ethereum Killer,’ a term initially coined by Ethereum co-founder Vitalik Buterin when he joked that “Ethereum is the Ethereum Killer.”
Perhaps the more likely case is that, the two blockchains will grow together, on similar but different paths. The field of blockchain research, though, has an understanding that progress in one currency benefits everyone. This shared belief often leads developers to exchange and integrate each other’s findings into their own projects.
Regardless of what happens, Cardano is off to a great start and we are eager to watch where it is heading.
Image credit: Cardano
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