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What Is Cardano in 5 Minutes

What Is Cardano In 5 Minutes@2x

Summary

The Cardano blockchain protocol uses a Proof-of-Stake (PoS) consensus mechanism and has numerous use cases and applications. These include crypto transactions and staking, smart contracts, Internet of Things (IoT), non-fungible tokens (NFT), and more. Cardano was founded by Ethereum co-founder Charles Hoskinson, who has framed Cardano’s roadmap, tech, and development as having improved on learnings from the launch, success, and challenges faced by Ethereum. Cardano is powered by its native coin ADA, and is considered a third-generation blockchain protocol.

  1. The Cardano Crypto Origin Story

  2. The Five Phases of the Cardano Roadmap

  3. The Cardano Blockchain’s Key Technical Features and Tools

  4. Use Cases of the Cardano Crypto Ecosystem

  1. The Cardano Crypto Origin Story

  2. Development on the Cardano blockchain platform began in 2015 after a high profile Initial Coin Offering (ICO). Cardano was founded by Charles Hoskinson, a co-founder of Ethereum who departed the project to focus on Cardano with the intention of delivering a more complete network for decentralized programs. According to Hoskinson, he saw early iterations of Ethereum as a “proof of concept,” and set about improving on its shortcomings with Cardano. Following two years of research and development, the Cardano mainnet was officially launched in 2017, kicking off a five-phase, multi-year development process.

    Like Ethereum, Cardano is a decentralized network built for programmable assets and decentralized applications (dApps). However, Cardano was specifically constructed to improve on Ethereum’s scalability, security, and cost, in addition to launching with a Proof-of-Stake (PoS) network from the onset. Cardano uses its native ADA coin as the cryptocurrency of its PoS blockchain. Cardano has also aimed to solve for a number of challenges faced by Ethereum, like the occurrence of controversial hard forks and the existence of barriers to entry due to the exclusivity of Ethereum’s bespoke programming language Solidity.

    Cardano is known for its research-driven focus. The organization has published numerous peer-reviewed papers and partnered with several universities to facilitate blockchain research and education. Cardano is supported by three separate entities: the not-for-profit Cardano Foundation, its commercial arm Emurgo, and the blockchain software development firm Input-Output Global (IOG). All three entities work in tandem to push Cardano along its developmental roadmap.

  3. The Five Phases of the Cardano Roadmap

  4. The Cardano roadmap has five distinct phases that implement upgrades and add functionality to the Cardano protocol.  Like its blockchain and native asset — named after Gerolamo Cardano and Ada Lovelace respectively — the Cardano phases (and hard forks) are named after exceptional scholars, mathematicians, and scientists. Let’s take a look at Cardano update phases and objectives:

    1. Byron Phase: Named after poet and politician George Gordon Byron (a.k.a. Lord Byron), the Byron Phase is the first of five phases in Cardano’s developmental roadmap. After two years of development, the Cardano blockchain mainnet went live in September 2017, enabling users to buy and sell its native ADA coin — powered by its pioneering Ouroboros PoS protocol. Other notable features include the debut of the Daedalus and Yoroi ADA wallets.

    2. Shelley Phase: Named after author Mary Shelley, this phase is the second of five in Cardano’s developmental roadmap. It is designed as a safe and stable transition towards a more decentralized Cardano furnished by community-run network nodes that are incentivized to participate in the network’s decentralization goals. During the Shelley Phase, the Mary Upgrade — or Mary hard fork — rolled out an update that allowed users to mint their own Cardano tokens. This phase also saw the introduction of Cardano staking pools.

    3. Goguen Phase: Named after computer scientist Joseph Goguen, the Goguen Phase is the third of five phases in Cardano’s long-term roadmap. One of the primary goals of Goguen is to allow both technical and non-technical users to create smart contracts and decentralized applications (dApps). This was achieved in September 2021 via the Alonzo hard fork — or Alonzo Upgrade. Another notable feature was the release of the programming language Marlowe. As of Q4 2021, Cardano is still in the Goguen Phase.

    4. Bashō Phase: Named after Matsuo Bashō, a Japanese poet renowned for his haiku, the Bashō Phase is focused on optimizing both scalability and interoperability. A major goal of this phase is the introduction of parallel account models. The Cardano blockchain will continue to use its Extended Unspent Transaction Output (eUTXO) model; an accounts-based accounting model will be accessible via Cardano sidechains. The other major benchmark of Bashō is the implementation of Hydra, Cardano’s advanced Layer-2 solution.

    5. Voltaire Phase: Named after the French writer and philosopher, this final phase will be focused on integrating decentralized governance. There will be an open voting and treasury system funded by transaction fees. This means that, when the Voltaire Phase is implemented, Cardano will no longer be run by IOG; it will be fully governed by the Cardano community itself.

  5. The Cardano Blockchain’s Key Technical Features and Tools

  6. The Cardano protocol features numerous noteworthy features thanks to its prolific developer community. Below are a number of key innovations;

    • Ourboros consensus: Cardano’s PoS mechanism was the first to be peer-reviewed and independently security audited and verified by third parties. It uses ADA-powered staking pools to support the network. As of Q4 2021, it is now known as Ouroboros Praos.

    • Hard fork combinator: Designed for — and used by — the Cardano blockchain, the hard fork combinator (HFC) is designed to enable smooth hard fork updates without system stoppages or fundamental chain restarts. It does this by combining pre- and post-fork blocks for a transition period — with the ability to combine future blocks and their updates into a single combined property or ledger. This also helps prevent the types of (at times highly problematic) chain splits that have troubled the Bitcoin and Ethereum networks.

    • Plutus and Marlowe programming languages: While Cardano primarily uses Haskell, it also has a programming language called Plutus that is optimized for smart contracts; its code can also be used for powering both on-chain and off-chain functions. Marlowe is a supplementary programming language for users that aren’t programmers. It is designed to allow subject matter experts to create and test smart contracts without the need to learn complicated coding languages.

  7. Use Cases of the Cardano Crypto Ecosystem

  8. In addition to the 2021 upgrades that enabled Cardano tokens, Cardano smart contracts, and decentralized finance (DeFi) tools, Cardano has numerous other use cases for both individuals and institutions. Some of the offerings that are worth paying attention to include:

    • NFT minting and blockchain-based gaming: Cardano now allows for the minting of tokens, including non-fungible tokens (NFTs). The trending NFT industry has applications for digital art, collectibles, blockchain-integrated games, and more.

    • Digital identity and inventory tracking: Targeted towards governmental and corporate entities, Cardano has several applications that leverage its blockchain to offer Blockchain-as-a-Service (BaaS) services. These tools can cut down on fraud, improve transparency, and simplify legal compliance in certain jurisdictions.

    Cardano DeFi dApps and tools: ADA coin holders can use their holdings to earn rewards via Cardano staking pools. A Cardano DeFi fund has plans in the works to build a Cardano DEX, to be followed by a platform that will offer Cardano-based Initial DEX Offerings (IDOs) and peer-to-peer (P2P) DeFi lending and borrowing.

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