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What is Cardano (ADA)?

Introduction

  • Cardano is an open source project that began in 2015, which wants to change the way crypto-currencies are designed and developed.
  • The main focus is to make a more balanced and sustainable ecosystem which can equally understand the needs of the users while being able to integrate into different information systems.
  • Cardano learns from the 1000 altcoins before it and has a high emphasis on research.
  • Sojourn’s End–  There are two collections of protocols. 1. a provably secure proof of stake based crypto-currency called the Cardano Settlement Layer(CSL) 2. Cardano Computation Layer(CCL).
  • Social Element of Money– There are always disagreements about philosophy, monetary policy, or even just between the core developers lead to fragmentation and forks. The cardano settlement layer will have a layer on top to handle all these issues. Cardano will propose hard and soft forks to vote on.
  • Scripting- Scripting of smart contracts can be done unlike bitcoin. Plutus is a general purpose smart contract language and can be used for DSL inter-operability.
  • Sidechains-  Cardano will have the feature of sidechains in the future called KMZ sidechains.
  • Signatures- Signatures are needed to securely move value from one person to another. Cardano is interested in integrating quantum computer resistant signatures, which cannot be solved even when brute forced by a quantum computer.
  • User Issued Assets(UIAS)- Just like how the ethereum network has an ERC-20 standard for creating tokens, users can issue assets in cardano. One alleged drawback in ethereum is that all transaction cost must be paid in ether. This will not be the case in cardano.
  • Scalability- Scalability is achieved in most crypto-currencies by adding more number of nodes to deal with the incoming transactions. All nodes must have the copy of the blockchain and also all nodes are not active as generally they are randomly selected while the rest sit idle. Ouroborus, a delegated proof-of-stake consensus, selects a group of nodes which have the responsibility of maintaining the network for a period of time. This can accommodate the needs of large corporations such as Facebook and Google.
  • Cardano Computation Layer(CCL)-  The problem in crypto-currencies or anything decentralized is that it can be used for wrong purposes such as trafficking child pornography or selling government secrets. There is no way to stop this but Cardano Computation Layer requires consensus node to willing to include these transactions in these blocks. This can help protect the users.

 

Interoperability

  • The Grand Myopia- There is a need for an unbiased judge, an uncaring digital judge which perfectly executes according to a constitution. The problem occurs when we want to mix this new fintech with the traditional financial systems. Land can be tokenized but can’t be enforced to be given by technology. There is no way to ensure the transfer of a gold bar cannot happen by itself.
  • Legacy- There is a need to upgrade fintech to new technology and not be stuck with the old. Many banks still use backends using  COBOL. The problem is there is no bridge to move from old system to new systems. Cardano believes there are 3 main concerns that have to be addressed.
    • Representation of information and belief in its accuracy.
    • Representation of value and its associated ownership.
    • Representation of entities and, a particular user’s alongside the aggregate level of trust in such entities.
  • Tokenized assets must also be actualized in legacy applications. If Tom has a token of land and sells it on SwitchMyCrypto and if they have not updated to the new ledger there should not be a problem.
  • CryptoCurrency Interoperability-  This problem is easier solved than the legacy one. Each Distributed ledger has its own protocols and standards which can be quantified. It is a question of converting and translating messages. Plutus can be used for interoperability scripts.
  • Maze of Daedalus- The question is, what about the interoperability to something that Cardano does not provide? Should that be out of the scope? They have decided to experiment with this paradigm by deploying our reference wallet’s front end on Electron. It is an open source project maintained by Github that combines both Node and Chrome together. Cardano’s build of Electron is called Daedalus. This allows developers to use JavaScript, HTML5, and CSS3 to build their applications to bridge any need gaps in interoperability.

 

Regulation

  • The truth is all financial systems when big enough require regulation or at least there emerges a desire for regulation. Cardano has chosen to divide between individual rights and the rights of a marketplace. Individuals should have sole access to their funds.
  • Cardano knows that in the future users will have to send metadata(data about the transaction) to Tax Officials or other government authorities. But this should only be done with the consent of the user.
  • As the blockchain is immutable, has timestamping and provides auditability some metadata should be posted to the blockchain. The question arises how much should be posted and how much would just be bloat.
    • Daedalus will support over the next 12 months a large array of features to label transactions and financial activity. These metadata can be exported and shared on demand with whoever the user deems necessary. Furthermore, the data can be operated on by three party applications for domain-specific purposes (for example, tax accounting).
    • Cardano is also experimenting with some fields being encrypted so the metadata would not be revealed publicly.
  • Marketplace DAOs- Smart contracts can be used to create a commercial system using self- enforcing and free of ambiguity code. These smart contracts where there is a deterministic relationship are called marketplace DAOs. There is no need to create a new protocol or any mutability in the ledger. Regulation is done directly by the code and enforced by the code.

ADA coin

  • Total ADA = 45,000,000,000
  • 25,927,070,538 Ada were sold at launch
  • 25,927,070,538 Ada were sold at the ICO
  • This make amount is circulation equal to 31,112,484,646 ADA.
  • The remaining Ada, 13,887,515,354, will be issued after the launch through minting.

 

Additional Notes/Updates

Click here to learn how to buy ADA.

 

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