Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

72.12% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

Cardano

Cardano (ADA)

Cardano is one of the biggest cryptocurrencies by market cap with the native digital coin ADA. It’s designed to be a flexible, sustainable, and scalable blockchain platform for running smart contracts, allowing the development of a wide range of decentralized finance apps, new crypto tokens, games, and more.

This article describes the history of the project, pros and features that make this project unique, tools that make this project secured, and, finally, reasons to consider investing in ADA coin.  

History of Cardano

Think of Bitcoin as Crypto 1.0. It's essentially digital gold, but the system has scalability issues. Ethereum, the second largest cryptocurrency, is often referred to as Crypto 2.0.

Cardano, created in 2015 and launched in 2017, is Crypto 3.0, with the goal of improving upon the functionality that Ethereum was initially missing. Charles Hoskinson founded Cardano, and he's also a co-founder of Ethereum. Hoskinson left the Ethereum team due to a dispute with co-founder Vitalik Buterin in 2014 regarding whether the Ethereum project should be commercial or not.

As a result, he moved on to launch Cardano as a more scalable, interoperable, and sustainable blockchain, intending to improve upon Bitcoin and Ethereum.

What makes Cardano unique?

There are the dozens of other PoS blockchains already present on the market. But what makes Cardano different from them?

The main feature of Cardano is that, unlike other projects, it didn't release a whitepaper. Instead, it aims to be a scientifically peer-reviewed blockchain, always using the best practices to provide the optimal crypto ecosystem. To achieve this, Cardano boasts the following characteristics:

Layered architecture

The Cardano blockchain is composed of two main elements:

  • The Cardano Settlement Layer (CSL) – where all the transactions are carried on.
  • The Cardano Computational Layer (CCL) – used to deploy smart contracts and govern the network.

layers.png

Two layers of the Cardano blockchain

Cardano’s developers wanted to build a system that separates the value of a transaction from its computational data.

The Cardano Settlement Layer is designed to manage the movement of the value (or the currency) between the sender and the receiver. In other words, the settlement layer is the routing layer for all the control layers and systems.

The CSL uses two dedicated scripting languages, Plutus and Marlowe, for moving the value and enhancing support for overlay network protocol.

The Cardano Computation Layer helps Cardano to replicate the Bitcoin (BTC) ecosystem’s smart contract platform, Rootstock (RSK blockchain). The reasoning behind CCL’s implementation lies in its ability to help scale specialized protocols over the years. This involves adding hardware security modules (HSM) to the existing stack of protocols as technology advances.

The two layers of the Cardano blockchain allow the ecosystem to proactively implement changes to support faster and more secure transactions while eliminating any user metadata that proves to be irrelevant to the process.

Ouroboros Proof of Stake

A second unique aspect of Cardano is its proprietary consensus mechanism called Ouroboros Proof of Stake. In this validation mechanism, users can become full node validators or delegate their stake to other superusers to validate transactions on the network.

In Ouroboros, time is divided into epochs, and for each epoch, a new set of validators is voted in by the system. It allows for better diversity and decentralization of the pool of validators.

Validators are rewarded with new ADA tokens to distribute to everyone who delegated their stake, effectively creating an opportunity for passive income.

Five Advantages of Cardano

Cardano has a wide array of advantages. Below are five of the most important ones compared to competitors in the crypto sphere.

Fast transactions. Cardano was created to be highly scalable. At the moment, it provides 250+ transactions per second, compared to Ethereum's 30.

Cheap gas fees. Additionally, the PoS model allows Cardano to offer nominal transaction fees on its network. The average cost of a transaction on Cardano costs around 0.17 ADA, which equates to a couple of cents. Compare this to the price of Ethereum of $0.7 per transaction.

A higher degree of decentralization. The network becomes increasingly decentralized because everyone can become a node validator in Ouroboros. At the moment, there are more than 2500 validator pools in Cardano.

Eco-friendly. One of the main concerns in the 2021 bull run is the high amount of electricity required by PoW blockchains such as Bitcoin. Cardano, with its PoS mechanism, consumes 99% less electricity than the number one cryptocurrency.

Passive income. Finally, every Cardano holder can gain passive income by staking their ADA coins.

What is Cardano’s Vasil Hard Fork?

A hard fork is a network upgrade by adding or fixing certain features to the ecosystem. Vasil hard fork was designed to help improve the ecosystem’s scalability and general transaction throughput capacity as well as advance Cardano’s decentralized applications (DApps) development capacity.

Moreover, the hard fork bolstered the network’s stability and connectivity, which is a huge and prominent step forward for Cardano as the upgrade reduced the network’s transaction costs while increasing transaction speeds.

How Is the Cardano Network Secured?

Cardano network uses a proof-of-stake consensus mechanism, which is more secure and energy-efficient than proof-of-work algorithms used by other cryptocurrencies like Bitcoin.

In proof-of-stake, validators are selected to validate transactions and create new blocks based on the amount of stake they hold in the network. This incentivizes validators to act honestly, as they stand to lose their stake if they engage in malicious behavior.

Cardano’s consensus mechanism has been mathematically proven to be secure under the assumption that the majority (>50%) of its participants are honest. The fact that it relies on this assumption means that it’s not resistant against 51% attacks.

Additionally, Cardano's blockchain is built on a series of peer-reviewed scientific research papers, ensuring that the underlying cryptography and consensus mechanism are thoroughly vetted and secure.

How Many Cardano (ADA) Coins Are There in Circulation?

Cardano launched in 2017 with a total supply of 45 billion and a public sale of 25.9 billion ADA coins. About 5.2 billion coins were distributed privately between three entities, namely, Input Output Global (IOG), Emurgo, and the Cardano Foundation. That meant that 19.1 billion ADA coins were out of circulation.

As of February 2023, the number of ADA tokens in circulation is up to 34.6 billion, leaving 10.4 billion inaccessible to market holders. The availability of the extra coins helps to keep its price stable when the crypto market experiences volatility.

The Bottom Line

The potential value of Cardano as a project is subjective and depends on individual opinions and perspectives. Here are a few factors that could be considered when evaluating the potential of Cardano:

Development: Cardano has a strong development team and is actively working on improving its technology, including features such as smart contract capabilities and scalability.

Community: Cardano has a growing and dedicated community of users and developers, which can help drive adoption and further development of the platform.

Partnerships: Cardano has established partnerships with various organizations and companies in the blockchain and tech industries, which can help drive adoption and increase its overall value.

Use cases: Cardano is positioned as a blockchain platform for financial applications, including stablecoins and decentralized exchanges. If these use cases gain traction, it could have a positive impact on the value of Cardano.

Ultimately, it's important to keep in mind that cryptocurrencies and blockchain projects are inherently risky, and the future value of Cardano is uncertain. Fortunately, FBS traders can trade cryptocurrencies both ways long and short, gaining capital on the rising and falling market.

Gain the experience trading cryptocurrencies with FBS crypto account!

Back

2023-02-16 • Updated

Choose your payment system

Feel the Team Spirit

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later