What is the technology stack behind Stellar
Cardano: That's behind the new star in the crypto sky
First came Bitcoin, then came Ethereum, and then came Cardano: At least that's what Charles Hoskinson, one of the brains behind the new Cardano crypto movement, believes. Hoskinson is one of the co-founders of Ethereum, but with his company Input Output Hong Kong (IOHK) and in association with the Cardano Foundation in Switzerland and the Japanese company Emurgo, he wants to take cryptocurrencies to the next level. Nothing less than the third generation of crypto currencies after BTC and ETH is to be developed by 2020.
The crypto community is apparently quite impressed by the concepts surrounding Cardano and the associated crypto currency Ada. According to CoinMarketCap, Ada has risen from nowhere to the sixth largest cryptocurrency by market capitalization in the past few weeks - it is now at a market cap of around 12 billion dollars and is larger than Dash, Bitcoin Gold, IOTA, NEM or Monero.
What does Cardano want?
Cardano sees itself as a technical platform for the crypto currency Ada, which can already be traded. The platform should be able to do several things: End users, as well as organizations and governments, should be able to make transactions with Ada, faster and easier than with Bitcoin or Ethereum, for example. The Ada token is designed as a voucher. A separate layer is to follow later in order to be able to map “smart contracts” so that companies can conclude digital contracts in the future. Furthermore, it should also be possible to program decentralized apps ("dApps") on the platform.
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It is also important to the creators that Cardano can meet the requirements of regulatory authorities and harmonize the requirements with laws with the wishes of users for privacy. For Bitcoin, for example, this is currently a problem. Due to the high anonymity of Bitcoin, more and more politicians (e.g. in the EU) are calling for crypto exchanges and wallet providers to identify users (Trending Topics reported). This is intended to prevent misuse for money laundering, for example. At Cardano, compliance with regulatory requirements is seen as a prerequisite for adoption on the mass market.
What is special about Cardano?
Cardano wants to distinguish itself from other crypto projects by having a strong scientific basis. A team of crypto researchers recognized in the scene (including Bernardo David, Duncan Coutts) has formed around Hoskinson, who work with feedback from the scientific community. It is said that the suitability of the technology is checked regularly via peer reviews.
The platform itself is being built in such a way that, in theory, it can also be used by Fortune 500 companies and governments. This is not unreasonable: Reports or at least rumors keep coming up that countries like Russia, Venezuela or Estonia are planning their own crypto currencies. Large companies are also pushing into the area.
While Ethereum is currently primarily important for ICOs from startups, trading and fun things like CryptoKitties, Cardano wants to dock with its platform with large organizations and institutions and, above all, score points with regulatory compliance.
Who is behind Cardano?
There are essentially three organizations behind the Cardano project. The company Input Output Hong Kong (IOHK) run by Charles Hoskinson (with Ethereum until 2014) is a research company that specializes in blockchain technologies. She has been commissioned to develop the Cardano platform fully functional by 2020. IOHK was also involved in the Ethereum spin-off, Ethereum Classic.
The Cardano Foundation around the chairman Michael Parsons is based in Zug, Switzerland and is supposed to take care of the regulatory aspects of the cryptocurrency. Finally, the Japanese company Emurgo is the project's partner who is supposed to take care of the business. The first step is to ensure that 25 ATMs will be set up in Japan over the next year, at which Ada can be bought and sold.
Where can you trade Ada?
According to the operators, the Ada cryptocurrency can currently be traded on four crypto exchanges: Bittrex (Las Vegas), Binance (Hong Kong), Coinnest (South Korea), UpBit (South Korea) and Mr. Ripple (Japan). There are a total of 45 billion Ada tokens, of which only around 26 billion are currently in circulation. This means that large parts of the Ada tokens are under the control of a few people or organizations and are not freely available on the market.
According to CoinMarketCap, Ada is currently mainly traded on Bittrex and Binance (together around 90 percent of the trading volume).
Which wallet do you need for Ada?
In order to be able to send and receive Ada, you need your own wallet. This is called Daedalus (named after the figure from Greek mythology) and can currently be installed on Windows PCs and Mac computers (Linux is to follow). Apps for Android and iOS are also planned, but there is currently no time frame for them. Functions for the wallet are also being developed so that Ethereum can also be used in it. In principle, every currency should be able to be supported.
Fun fact: The two Austrian developers Stefan Malzner (maker of the Franz app) and Dominik Guzei are also working on the Daedalus Wallet.
What should you be able to do with Ada?
You can currently trade with Ada purely on the crypto exchanges mentioned. Once there are apps that support Ada, you should be able to use the token designed as a voucher to pay for services or send money to friends in the form of Ada.
The goal, however, is for users to be able to use digital money to pay in everyday life. For this purpose, there will be a separate ATM card to enable the bridge to offline trading. This concept is already known from other crypto projects such as TenX (more on this here).
Can you mine Ada?
No, not at the moment. Unlike other cryptocurrencies, Ada does not work according to the “Proof of Work” concept, but rather according to the “Proof of Stake”.
With "Proof of Work", the computing power of a participant in a network is used to let an algorithm determine who receives the coins created as a reward when generating blocks. Bitcoin or Ethereum are designed according to the "proof of work".
With “Proof of Stake”, the amount of coins that the respective participants have in the network determines who receives newly generated coins. With “Ouroboros”, IOHK has developed its own algorithm that “Proof of Stake” was supported. However, “Proof of Stake” has not yet established itself or proven itself. More details on Cardano's “Proof of Stake” algorithm can be found here.
What's on the roadmap?
In the first quarter of 2018, the Cardano project plans to publish a “Computation Layer”. This should enable users to develop decentralized apps with their own stack that run on the Cardano platform. The company IOHK, which was commissioned with the development, is committed until 2020 to fully expand the platform. Means: The project has to prove in the next few years that the ambitious goals can be achieved.
After phenomena like IOTA, Bitcoin Cash or Stellar or Monero, Cardano is the next crypto project that quickly came to the top. It remains to be seen whether it can hold its own there or whether it will soon be replaced by the next hype.
Editor’s Note: Investments in crypto coins or tokens are highly speculative and the market is largely unregulated. Anyone contemplating activity should consider that their entire investment could be lost.
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