Cardano

Cardano operates as a proof-of-stake blockchain platform with the stated objective of enabling “changemakers, innovators and visionaries” to drive positive global change. This open-source initiative also seeks to “redistribute power from unaccountable structures to the margins to individuals,” fostering a society that is more transparent, secure, and fair.

Established in 2017, the project is named for Gerolamo Cardano, a 16th-century Italian polymath. Its native token, ADA, honors Ada Lovelace, the 19th-century mathematician considered the world’s first computer programmer. The ADA token is structured to let owners take part in network operations, granting holders the right to vote on proposed software changes.

Developers of this layered blockchain state that compelling use cases already exist for their technology, which aims to support the modular development of smart contracts and decentralized apps. In August 2021, Charles Hoskinson announced the Alonzo hard fork, leading to a 116% price increase for Cardano over the next month. The ‘Alonzo’ hard fork officially went live on Sept. 12, 2021, introducing smart contract capabilities to the chain. Within the first 24 hours following the launch, more than 100 smart contracts were deployed.

Currently, agricultural firms use Cardano to trace fresh produce from field to fork. Other applications built on the platform enable retailers to combat counterfeit goods and allow educational credentials to be stored in a tamper-proof manner.

Charles Hoskinson established Cardano. He previously served as a co-founder of the Ethereum network and currently acts as the CEO of IOHK, the firm responsible for developing Cardano’s blockchain.

Hoskinson noted that his initial professional engagement with the sector occurred in 2013, when he developed a Bitcoin course that attracted 80,000 students.

In addition to being a technology entrepreneur, Hoskinson is a mathematician. In 2020, his tech company contributed $500,000 worth of ADA to the University of Wyoming’s Blockchain Research and Development Lab.

Cardano stands out as one of the largest blockchains to effectively implement a proof-of-stake consensus model, which consumes less energy than the proof-of-work system Bitcoin uses. While Ethereum is also moving toward proof-of-stake, that shift is expected to occur gradually.

The project emphasizes subjecting its technology to peer-reviewed research, allowing bold concepts to be scrutinized before validation. The Cardano team states that this academic approach fosters durability and stability, helping to foresee potential issues early on.

In 2020, the Shelley upgrade was implemented with the goal of making the network “50 to 100 times more decentralized” than other major blockchains. Hoskinson predicted at that time that this would enable hundreds of assets to operate on the platform.

The Alonzo hard fork, scheduled for launch in September 2021, is set to conclude the Shelley era and begin the Goguen phase. This update will allow users to create and deploy smart contracts, facilitating the development of native decentralized applications (DApps). Prior to this launch, the price of ADA surpassed $3, reaching an all-time high of $3.101 on Sept. 2, 2021.

Honoring Vasil Dabov, a key Cardano contributor and late Bulgarian mathematician, the Vasil hard fork is regarded as one of the most eagerly awaited upgrades for the network. As the third development epoch for Cardano, this hard fork aims to enhance the Plutus smart contract language and boost network capacity.

Although initially scheduled for June 2022, the launch has faced multiple delays.

Vasil intends to deploy five key mechanisms to bolster scalability and usability: CIP-31, CIP-32, CIP-33, CIP-40, and diffusion pipelining.

• CIP-31, known as “reference inputs,” creates a new input type that lets developers view an output’s result without spending it, thereby optimizing throughput and concurrency.
• CIP-32 seeks to enable inline datums. Instead of linking datum to hashes as currently done, this proposal would let developers attach datums directly to outputs. This allows scripts to reference inputs directly, facilitating faster and simpler datum value communication.
• Cardano Improvement Proposal 33 permits attaching reference scripts to outputs. These scripts can meet validation requirements instead of the spending transaction, which streamlines validation and reduces transaction size.
• CIP-40 introduces collateral outputs, a new transaction output type designed to improve overall network scalability.
• Diffusion pipelining serves as the consensus layer’s scaling solution. By overlapping certain steps a block undergoes while moving across the chain, this proposal aims to support concurrent transactions and encourage greater DApp deployment.

Cardano has a capped maximum supply of 45 billion ADA, with a circulating supply of approximately 31 billion at the time of writing. The project conducted five public token sales from September 2015 to January 2017. During the pre-launch phase, the price was $0.0024, which implies a return of over 1000x based on current prices.

Upon the network's launch, IOHK received an allocation of roughly 2.5 billion ADA. Emurgo, a founding entity and global blockchain technology firm, was granted an additional 2.1 billion ADA. Furthermore, the non-profit Cardano Foundation, which works to drive adoption and promote the platform, was assigned 648 million ADA.

In total, the project’s founders received about 16% of the total ADA supply, while investors were allocated the remaining 84%.

Cardano relies on Ouroboros, a Proof-of-Stake (PoS) protocol described as “environmentally sustainable, verifiably secure.” The project states that this system enhances the security assurances provided by Proof-of-Work (PoW) consensus while consuming significantly less energy, asserting it is four times more energy efficient than Bitcoin. Ouroboros combines distinct technology with mathematically verified mechanisms, incorporating elements of behavioral psychology and economic philosophy. Its primary goal is to foster ethical and sustainable growth. Additionally, an incentive structure rewards network participants for their engagement.

Cardano launched its long-awaited Alonzo upgrade on Sept. 12. This update enables the blockchain to handle smart contracts and non-fungible tokens (NFTs), along with decentralized exchanges. Project founder Charles Hoskinson stated that Alonzo brings “programmability” to the network, comparing the shift to the introduction of JavaScript, which transformed static websites into dynamic platforms like Facebook and YouTube. The upgrade honors American mathematician Alonzo Church, recognized as a pioneer in computer science.

With this change, Cardano joins Ethereum in supporting applications beyond a native token, placing it firmly in the same category as the leading blockchain for decentralized finance. Since the upgrade, smart contract adoption has risen, with the network exceeding 1,000 smart contracts on Jan. 27, 2022. Wallet numbers also climbed sharply, growing 1,200% from 190,000 in December 2020 to over 3,000,000 by February 2022.

Developer engagement reflects this expansion, with Cardano recording more Github contributors than established chains like Solana and averaging over 50 daily repo contributions. Despite this growth, the network has faced challenges with smart contract execution, including user complaints regarding the slow launch of the SundaeSwap decentralized exchange in January 2022.

Given Cardano’s status as one of the largest cryptocurrencies by market capitalization, locating a major exchange to purchase it is generally straightforward. Platforms such as Binance, Bittrex, eToro, and HitBTC all offer ADA.

If you cannot find a direct trading pair linking ADA to your local fiat currency, you may refer to a guide on converting fiat into Bitcoin, which provides a pathway for acquiring altcoins.

Commonly available Cardano trading pairs include:

• ADA/USD
• ADA/JPY
• ADA/KRW
• ADA/CNY
• ADA/GBP
• ADA/AUD