What Is Cryptocurrency Cardano (ADA), And How Does It Work?

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Cardano

Before going into what Cardano is and how it works, let’s quickly recap what cryptocurrency and blockchain are. 

A cryptocurrency is simply a digital currency in which transactions are verified, and records are kept by a decentralised system rather than a centralised authority using cryptography.

A blockchain is a decentralised ledger that records all transactions on a peer-to-peer network. Participants can confirm transactions using this technology without needing a central clearing authority.

What Is Cardano?

Cardano is a blockchain project founded in 2015 by a former co-founder of Ethereum, Charles Hoskinson. His reason for creating Cardano was to provide a more balanced and sustainable ecosystem. Hoskinson envisioned addressing the three most pressing issues confronting all blockchain networks: scaling, interoperability, and sustainability.

According to Cardano’s website, Cardano is a proof-of-stake blockchain platform: the first to be founded on peer-reviewed research and developed through evidence-based methods. It combines pioneering technologies to provide unparalleled security and sustainability to decentralised applications, systems, and societies.

How Cardano Came Into Existence?

Cardano shares some notable history with Ethereum, which goes far back as when Hoskinson was a co-founder of Ethereum in 2014 before they parted ways in June that same year. This was due to an alleged disagreement over creating a non-profit organisation for Ethereum. Hoskinson desired to create a for-profit entity for Ethereum, while Vitalik desired that Ethereum development be solely non-profit.

Read also: Is It Too Late To Buy ADA? Cardano Price Prediction 2022-2030

Hoskinson left Ethereum due to disagreements, forming the for-profit company Internet Online Hong Kong (IOHK) in 2014. As CEO of IOHK, he oversaw the development of Cardano beginning in 2015.

Three significant players have assumed primary responsibility for the continued development of Cardano’s protocol and ecosystem.

  • Emurgo is a global technology company that deals with the commercial adoption of Cardano’s protocol and enabling integrations with various businesses.
  • IOHK, a for-profit organisation with a primary focus on developing the Cardano platform.
  • The Cardano Foundation, a non-profit organisation responsible for promoting, 

protecting and standardising Cardano’s protocol.

Why is Cardano Popular Today? 

Cryptocurrencies are all risky investments. Despite this, Cardano has a strong team behind it and has achieved a lot in a short period of time.

The double blow inflicted on cryptocurrencies in mid-May 2021 ushered in a period of delayed recovery for many coins. Cardano, on the other hand, not only held its own but saw its share price rise significantly throughout the month.

Compared to other big wigs in the crypto space, Cardano has suffered a lesser drop in value within the same time. Cardano’s ADA coin was the world’s third-largest cryptocurrency by market capitalization in May 2021.

Many investors are optimistic about the potential of the project and its ability to bounce back quickly.

Related article: 5 Things to Consider Before Buying Cardano (ADA)

How To Buy Cardano

To buy Cardano (ADA) through two different means. First,  prospective investors can purchase Cardano through a crypto exchange (CEX) or through an individual who wants to sell their ADA. You can do this by using your fiat or swapping another cryptocurrency coin to ADA. 

However, keeping your coins in a cold wallet with private keys accessible to no one other than yourself is advisable. 

Conclusion

While its initial use case is a cryptocurrency, Cardano has a strong track record and a long-term vision for blockchain and cryptocurrency. Cardano’s blockchain plans to extend beyond coins to provide services not currently available in the cryptocurrency ecosystem. Given that it is still early, the vision’s execution is critical.

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