Cardano is building a next-gen layered blockchain project
Cardano is a third-generation blockchain and cryptocurrency project that leverages a unique two-layer architecture to enable better security and scalability. It is also the first blockchain platform designed and built based on peer-reviewed academic research.
Conceptualized by Charles Hoskinson, one of the co-founders of Ethereum, the Cardano project emerged in 2014 in an effort to find the middle ground between the need for regulation and decentralization principles (including privacy) that are at the core of cryptocurrencies.
From September 2015 to January 2017, Cardano ran a lengthy crowdsale of its ada token, which raised approximately $72 million.
Of note, Cardano has a strong and active community of both supporters and developers.
How is the Cardano different from other blockchain projects?
The Cardano protocol is designed to address some of the big issues emerging in the cryptocurrency space:
- Scalability: Both the Bitcoin and Ethereum blockchains (the two largest crypto projects by market cap) experience congestion, which can be problematic for a few reasons, including driving up transaction costs. Scalability is a serious problem for both protocols (and for many other crypto projects too), but Cardano was built to handle scaling by using a different style of blockchain architecture. Instead of relying on consensus from all nodes of a blockchain, the Cardano model elects nodes to decide on consensus (in a decentralized format).
- Interoperability: The Cardano blockchain is designed like a Swiss Army knife. The goal is to have a blockchain that can interoperate with other blockchains and be used for a wide variety of functions (from simply sending a payment to someone, all the way to executing a complex contract with multi-signatures). To achieve this vision, Cardano is broken into two layers, the Cardano Settlement Layer, which acts like a ledger showing the blockchain’s transaction record, and the Cardano Computational Layer, which contains all of the rules, signature information, and other components of the transaction. The goal with the separate layer style is to enable functionality that doesn’t currently exist on other blockchains.
- Smart contracts: Cardano developers are building the protocol from the ground up to address potential security issues with existing blockchains. In the last few years, the deployment of decentralized applications, which are governed by smart contracts, have shown vulnerabilities that have resulted in hacks and theft of funds. Cardano’s developers plan to address these issues at the language level and implementing a stack of computer languages to enable more flexibility and functionality, particularly in regards to security.
- Funding: With an eye towards long-term sustainability, Cardano has created a treasury as a means to incentivize future development and improvement of its blockchain. Each time a new block of the Cardano blockchain is created, a portion of the block reward will go to the treasury. If a developer, or team of developers, has an idea for improving Cardano then they will be able to apply for a grant for the treasury to support the work.
The future of Cardano
In May 2018, the parent company behind the Cardano project, IOHK, signed a deal with the Ethiopian government to use Cardano to improve the nation’s coffee industry. The goal is to map the entire coffee supply chain, allowing for unprecedented transparency, eliminating third parties and inefficiencies. What’s more, coffee buyers will be able to use QR codes to track the entire production process of their coffee from the farm-to-mug.
The header image is from Cardano.
Please note: Abra does not endorse currencies traded on the platform. This post is for informational purposes only and should not be considered financial or investment advice.