Cardano (ADA) is a third-generation smart contract protocol that aims to do away with the current bottlenecks hindering the wider adoption of a blockchain-driven economy.
Keeping scalability, interoperability, and sustainability at its ideological core, Cardano has cemented itself among the leading distributed ledger technology (DLT) projects today. Now, having successfully launched the highly-anticipated Shelley phase, things are only looking more promising than ever for Cardano.
In this Altcoin Explorer, we deep dive into this fascinating smart contract protocol which happens to be the world’s first peer-reviewed blockchain project driven by academic research and scientific philosophy. A multi-layered smart contract protocol, Cardano is committed to laying the building blocks for tomorrow’s decentralized economy.
History of Cardano and ADA
In 2015, former Ethereum co-founder Charles Hoskinson along with Jeremy Wood – his co-worker during his time at Ethereum – co-founded Input Output Hong Kong (IOHK), one of the three entities (others being Cardano Foundation and EMURGO) behind the development of the Cardano blockchain.
For the uninitiated, IOHK describes itself as a “research and development company committed to using the peer-to-peer innovations of blockchain to build accessible financial services for all.” Officially, IOHK has been contracted to build, design, and maintain Cardano until 2020.
Coming back to Cardano, the project was found on the idea of creating a scalable, decentralized, and stable blockchain protocol that fosters a society without power intermediaries.
Fast-forward to 2017, the project carried out its initial coin offering (ICO) raising a healthy $63 million through the sale of its native digital coin, ADA.
In September 2017, IOHK officially launched the Cardano blockchain which to rise through the ranks to establish itself as a force to reckon with in the rapidly growing blockchain and crypto space.
At the height of the 2017-18 ICO frenzy, Cardano’s ADA hit its ATH value of $1.18. Since then, despite the wider crypto market simmering down, ADA remains as one of the top-performing digital assets in the space consistently ranking among the top 10 coins by total market cap.
Today, ADA is one of the most recognizable cryptocurrencies in the industry with several major crypto exchanges supporting it. Individuals can trade ADA on exchanges such as Binance, Kraken, Binance.US, Huobi, and KuCoin, among many others.
What is Cardano?
While many like to dub promising smart contract protocols as potential “Ethereum killer,” Cardano is anything but that. Rather, Cardano is the first of its kind project which is laying grounds for the inevitable future “Cardano killer” blockchain projects.
Fundamentally, Cardano is a proof-of-stake (PoS) blockchain platform developed through evidence-based methods. According to its official website, Cardano combines pioneering technologies to offer unparalleled security and sustainability to decentralized applications (dApps), systems, and societies.
Cardano differs from the vast majority of other smart contract platforms in that its architecture is based on sound mathematical and scientific research. The project firmly believes that its academic-driven approach to blockchain will help it promote the wider adoption of the emerging technology.
The academic rigor of the project can be estimated from the fact that, to date, IOHK has published more than 60 academic papers that outline the technological infrastructure underpinning Cardano. Further, the firm has also inked academic partnerships with numerous prestigious universities across the world.
IOHK chose Haskell as the coding language for Cardano as it offers unparalleled security. For those not in the know, the Haskell programming language is used widely in information sensitive industries such as banking, finance, and defense.
The Triad Behind Cardano
The propulsion of Cardano among the heavyweight blockchain projects is the result of continual efforts by the three major entities working in the background. These are, namely, the Cardano Foundation, IOHK, and EMURGO.
The Cardano Foundation
The Cardano Foundation is the project’s independent standards body that oversees and supervises the advancement of the Cardano ecosystem. The Cardano Foundation, being the legal custodian of the protocol and the owner of the Cardano brand, performs various functions including driving protocol adoption, growing the global Cardano community, and shaping legislation and commercial standards.
The Cardano Foundation discharges the aforementioned duties through its governing council, a professional executive team, and community managers, who collectively burn the midnight oil to ensure the Cardano ecosystem continues to grow bigger.
The Cardano Foundation is just as much outward-looking as it is inward. To date, it has inked several partnerships with entities across different industries contributing to the expansion and wider adoption of Cardano. Further, the Cardano Foundation has also played an instrumental role in raising awareness about Cardano by launching myriad educational programs and courses.
As mentioned earlier, IOHK was founded by Hoskinson and Wood to oversee the design, development, and maintenance of the Cardano platform.
A leader in building distributed computing systems and decentralized technology solutions, IOHK is committed to formulating open-source principles in the field of cryptographic research and the architecture of cryptocurrencies.
Similar to the Cardano Foundation, IOHK is working toward promoting the academic study of distributed ledger technology (DLT) via educators, academic partners, and tailor-made courses.
Last but not the least, EMURGO is the commercial arm of Cardano that “develops, supports, and incubates commercial opportunities” and helps integrate them into the Cardano ecosystem. In essence, EMURGO can be considered the for-profit arm of Cardano that seeks to promote its adoption through successful commercial ventures.
EMURGO has offices in leading tech countries such as Singapore, Japan, USA, India, and Indonesia, and strives to ink partnerships with local blockchain players and national governments to give them a taste of the Cardano advantage.
As reported by BTCManager in February 2019, EMURGO had launched a blockchain academy in India to train close to 2,500 blockchain developers by the end of the year.
The Cardano Roadmap
Being a research-driven project, Cardano has a long roadmap which eventually strives to create a self-sustaining, scalable blockchain ecosystem that is governed by its community. Cardano’s roadmap is divided into five phases with each of them taking the project one step closer to its self-sustaining form.
Phase 1: Byron
The first phase of the project, Byron laid the foundation for Cardano in September 2017 after spending close to two years in development.
This phase enabled users to buy and sell Cardano’s native digital currency, ADA, named after revolutionary programmer Ada Lovelace. At the same time, Byron also introduced the cutting-edge Ouroboros protocol which is the first PoS protocol based on extensive academic research with a mathematically-proven level of security. You can learn more about this protocol here.
Further, the Byron phase also witnessed the release of Cardano’s official desktop wallet named Daedelus and Yoroi, a light-weight wallet from EMURGO to promote routine use of the ADA digital currency.
Phase 2: Shelley
The highly-anticipated Shelley upgrade marks the era of network decentralization for Cardano.
Officially launched on July 29, 2020, the Shelley upgrade is a watershed moment for the entire Cardano community as it entails the shift in the network’s structure from a federated one under Byron to a community-driven one. This means that under the Shelley phase, an increasing number of nodes will be a shift toward being run by the Cardano community, thereby giving it greater security and robustness.
Shelley brings with itself a plethora of new features and incentive mechanisms to the Cardano network aimed toward encouraging ADA holders to stake their coins to maintain network decentralization.
These include the introduction of a delegation and incentive scheme and a reward system to drive stake pools and community adoption. Toward the end of the Shelley phase, Cardano is expected to become 50-100 times more decentralized than other major blockchain networks.
Phase 3: Goguen
Once the network is sufficiently decentralized, smart contracts will be integrated into the Cardano network during the Goguen phase to make it ready for the development and deployment of enterprise-grade dApps.
Many might be unaware of the fact that the word for Goguen has been running simultaneously with Shelley, therefore, the Cardano community will not have to wait for a long period of time for the onset of this phase.
Unlike many other smart contract platforms that require advanced coding skills to develop blockchain-based dApps, Goguen will allow both users from technical and non-technical backgrounds – especially those with finance and business backgrounds – to develop dApps on the network without any hassle.
This will be achieved via Marlowe, a high-level domain-specific language for financial products built on Plutus which is a purpose-built smart contract development language and execution platform built on top of Haskell.
Phase 4: Basho
With a decentralized, smart contract-enabled network at hand, the next step for Cardano would be the optimization of the network to improve scalability and interoperability. This will be achieved during the Basho phase.
The Basho phase will introduce sidechains which are essentially new blockchains interoperable with the main Cardano chain. These sidechains can be leveraged as a sharding mechanism to reduce the load from the main chain to pave way for better network efficiency.
Additionally, the Basho phase will introduce parallel accounting styles. The introduction of account-based models into the Cardano network via sidechains will not only increase network interoperability but also serve the purpose of extending the scope of use-cases for Cardano.
Phase 5: Voltaire
The final phase of the Cardano blockchain, the Voltaire era will focus on the governance aspect of the network to complete its transformation into a self-sustaining system.
This era will introduce voting and treasury system that will allow network participants to use their stake and voting rights to chart the future course of Cardano.
Interestingly, the treasury system will be funded via a fraction of all transaction fees in the network to provide ready funds to finance the development activities to be performed as per the voting decision.
With a functional voting and treasury mechanism in place, the Cardano network will be decentralized in the true sense of the term and will no longer be under IOHK’s management. From there on, the network will run by the Cardano community itself.
In a fast-paced industry such as blockchain, a project following a methodological approach could easily stand out as an outlier. However, it is often the slow and steady that wins the race and the same can be expected of Cardano.
Cardano is a time-tested blockchain network that has not only successfully weathered all the ups and downs of the broader cryptocurrency industry but also continues to snowball into a larger protocol with each passing day.
Instead of taking the shorter route of borrowing the technical infrastructure from Bitcoin or other cryptocurrency systems, Cardano works with world-leading academics on fundamental research, most of which are subject to peer review, with papers presented at top-tier international conferences.
This longer and innovative approach to developing network infrastructure is a testimony to Cardano’s endeavor to become the leading smart contract platform to fuel an economy that is true to blockchain’s ethos of decentralization, transparency, and security.