What is Cardano?
Cardano is the world’s first ever-built peer-reviewed blockchain. The responsibility and its authority are under a Non-Profit Organization that assembled a network of academics and scientists from various universities and put it under one platform named Cardamom. It also includes the University of Edinburgh and Tokyo Institute of Technology, who reviews the company’s protocols before they are released. It can be referred to as a 3rd generation cryptocurrency. It is a smart contract platform claiming to improve upon the various scaling problems taking place in bitcoin industry (bitcoin which is referred to as the first-generation coin) and ethereum (that belongs to second- generation)
There are two platforms, which completes the Cardano platform:
1. The Cardano Settlement Layer (CSL): This layer is responsible for settling
Transactions that use ADA, Cardano’s cryptocurrency
2. The Control Layer: This layer is planned to be used for smart contracts. Cardano’s hierarchical structure makes sure that it can be used for generating smart contracts and well as a medium of exchange.
How to mine Cardano?
Unlike bitcoin, Cardano does not work on a proof-of-work blockchain. Instead of that, Cardano has its proof-of-stake algorithm, which is known as Ouroboros, that works in a particular way as compared to many other proof-of-stake algorithms. So what Ouroboros does is, it divides up all the time slots called “epochs,” which can be further compared to working a shift. Each epoch is headed by one slot leader being elected who is being responsible for making an well as confirming blocks in the Cardano blockchain. If one slot leader fails to or does not create a transaction block in their epoch due to any reason, automatically the next “shift” leader will give his shot, with a minimum of 50% or above of the blocks created within one epoch. The transactions existing in the blocks produced by slot leaders are further approved by the input endorsers, who are being elected based on stakes. There can be one or more than one input endorser in each epoch.
The Ouroboros system provides rewards or incentives for availability and verification of the transaction, as opposed to proof of work which uses enormous amounts of power to mine coins.
Ouroboros – PoS
In a typical Proof of Stake algorithm, nodes having the highest number of coins, do create a transaction block in a blockchain. But this Ouroboros algorithm does the work implementation of the algorithm differently.
Talking on a broader level, Ouroboros works in the following manner:
Initially, it divides the physical time into epochs that are composed of slots, which are definite fixed periods. Slots can be compared similarly to working shifts in a factory. In Cardano, the time range consumed by slots varies from one to another, and it can be modified within the algorithm itself. Epochs work in a circular way or manner: When one epoch ends, another one takes charge and comes online.
Every epoch consist of a slot leader, who gets elected by stakeholders or nodes who have already generated their coins. The Slot leaders are responsible for creating as well as confirming a transaction block that needs to be added to the Cardano blockchain. However, If they fail to create such a transaction block in an epoch, then automatically the next slot leader gets another shot at it through the course of the next epoch. At least fifty percent or above blocks must be anyhow produced within a given epoch.
Input endorsers approve the transactions in blocks which are produced by slot leaders. They comprise the second set of stakeholders responsible for running this protocol. There can be one or multiple endorsers within a given epoch, and their election is based on stakes.
The election system is very much configured for two inputs to ensure unbiased results. The first input is named as a multiparty computation system. A group of stakeholders within the network first perform a computation, That is a digital equivalent value of a “Toss of a coin,” and share their results amongst each other. The second part is the distribution of the stake or we can say wealth. Nodes with greater coins or stakes have increased chances of being elected slot leaders.
Ouroboros is also unique amongst all other algorithms in two manners, type and the way of incentives being offered to stakeholders. The Proof of Work algorithm returns rewards in the form of coins as well as the transaction fees to the miners. But on the other hand, the Ouroboros algorithm’s design offers incentives for availability and well as the transaction verification over an investment in the massive computer power to mine the coins. Economic rewards provided are also divided amongst these three stakeholders: input endorsers, the slot leaders & multiparty computation stakeholders.
Criticism of Cardano
Ouroboros has been referred to as “first provably secure proof of stake algorithm.” This is proven based on transactional ledger two important properties: Persistence and Liveness.
Persistence assumes that a transaction is said to be “stable” if an honest node is broadcasting it as such to the other parts of the network. A new security parameter is being used by this property that is a quantitative measure of the ledger’s security.
Liveness is pretty much complementary to Persistence. As per this property, honest transactions broadcaster as such becomes “stable” in the network’s nodes only after a certain amount of predefined time, as mentioned in the algorithm.
The paper outlining Ouroboros highlights several “plausible presumptions” that has been made by the algorithm’s creators to design it. For example, it is assumed that nodes in its network do not remain absent for long periods. Besides, desynchronized nodes are assumed not to contain more than 50% of all transactions in their calculations.
Detractor says that the assumptions taken to implement all these properties are broken. For instance, they say that the properties presume synchronization among the ledgers at any given point of time. As per their point of view, such expectations are “not practical for a global blockchain.” This could not be the scenario if some nodes are offline or if some slot leaders have missed out their transactions during their epochs. Others who have pointed towards 51% denial of service attacks, this may result in a maximum number of the network going offline, as another case of a suitable assumption.
Ouroboros algorithm is also being criticized for not able to sort out the double-spending problem completely. There is a risk of ‘approval of the same transactions from 2 different slot leaders’ by input endorsers, who are being responsible for approving transactions for slot leaders. Some also have a point of view that ‘sharding’, which refers to a technique that is being checked on the ethereum blockchain to solve this problem, might take other several years before it gets implemented.
Can Cardano Beat Ethereum and Bitcoin?
Cardano is very much unique as compared to other digital currency projects due to several reasons.
1. Cardano refers itself as a third-generation blockchain, means that it tries to solve problems and issues which have plagued its predecessor coins and those who are yet to be solved more broadly across the industry.
2. Cardano is not implemented at this stage. It is a developing project, consisting of a network that is not ultimately deployed. ADA supporters keep an eye on the progress made by the coin’s developers using their website, which includes detailed information and updates about advancements made in the coin and the network. These supporters also believe in a fact that, once this network gets fully deployed, Cardano could probably topple some of the most prominent digital currencies of today’s generation.
The Ultimate Battle between Cardano Vs Ripple, and Ethereum
Cardano developers have a target map in mind and the most significant target to overcome is Ripple (XRP). XRP has made a prominent name in the market for itself by its development of payment solutions consisting of centralized agents such as banks. XRP transactions are exceptionally fast.
According to a source “Zycrypto.com”, Cardano practically implemented has recorded a final 20 second period having a processing ability of 257 transactions per second. Although Ripple itself has been developed with scalability in mind, Cardano makes a different approach to layer-based architecture.
Another target to get over is ethereum. In today’s world, Ethereum is dominating the smart contracts space, although Cardano also aims and have a similar vision to offer smart contracts which would prove out to be more productive and efficient than those of ethereum.
The DAEDALUS WALLET
Daedalus wallet is a full-node hierarchical deterministic (HD) wallet made for ada cryptocurrency, and it is bundled with full Cardano node. It can store the entire history of Cardano blockchain, and it validates all blocks and transactions for fully trustless and autonomous operation.
WALLET FEATURES – Cardano
The wallet has the following features:
1. PROVIDES MAXIMUM SECURITY AS WELL AS FULLY TRUSTLESS OPERATION
Daedalus is referred to as a full node wallet. This can be elaborated as unlike other light wallets such as Yoroi, Adalite etc., Daedalus wallet downloads a full authentic copy of the Cardano blockchain, and it independently validates every transaction in its history. By this way, we get maximum security and completely trustless operation, without centrally hosting 3rd party
2. PROVIDES UNLIMITED ACCOUNTING
This wallet can manage any infinite number of wallets with our hierarchical deterministic (HD) wallet implementation. It has more control over funds organization.
3. It SUPPORTS ALL DESKTOP OS PLATFORMS
Daedalus wallet supports all major operating systems, and it runs on Windows, Mac OS, and Linux.
The newsfeed column provides news to all Daedalus users directly through its user interface. News is provided in 2 ways, depending on its importance. News can either be provided in the newsfeed sidebar, towards the right of the Daedalus window, where it can be opened & closed. Important news may cover the whole screen.
Is Daedalus wallet considered safe?
Daedalus wallet is a secure wallet as discussed above, for the ADA cryptocurrency. It is essential to have this wallet to keep the ADA safe.
Why is it taking so long to synchronize my Daedalus Wallet?
Ans. After we install Daedalus wallet for the very first time on our device, it will take some time (1 hour to multiple hours) to synchronize your entire blockchain with your newly installed Daedalus wallet. For some users, this might even take many hours.
What is meant by ADA?
Public blockchains create and deploy tokens having a value, commonly referred to as cryptocurrency. Cryptocurrency on the Cardano blockchain is known ADA. With the help of Ada, you can send this value amongst your friends, pay a bill for any good or service or depositing funds on exchanges.
How Can You Buy Cardano (ADA)?
One can easily buy ADA at any crypto exchange supporting the digital currency. ADA can be easily stored on an exchange, or in a wallet
The heart of the Cardano’s platform is named as Ouroboros. This is an algorithm that uses Proof of Stake protocol to mine coins. The protocol is customized in such a way that it reduces energy consumption and the time required for building new coins.
Latest news trends:
1. The CEO of Input Output Hong Kong “Charles Hoskinson” also known as the inventor of Cordano, announced the launch date for Shelley. The Shelley hard fork will be taking place on July 29 2020, and the first staking rewards will be available right from August 18.
2. The rise in Cardona’s social volume does not seem to be enough for its price:
Without ignoring the fact that the Cardano team has been celebrating significant milestones over the last few months, but still its social volume has always remained low and did not show a rise in volume. While it is social volume did show some increase in the trend in the last week of April, but it was pretty much short-lived, and the coin’s social volume remained flat.
3. After a market-wide crash, Cardano recovers
From bitcoin to Cordano, the last few days have been flamboyant in terms of market value. “Recently Bitcoin sliced through the $10,000 resistance level for the first time since the beginning of the year.”
Following this new trend, a few prominent analysts existing in the industry affirmed that the increasing conflicts between the United States of America and China could propel Bitcoin towards its all-time high.
Read about Supply Chain Management.
Read about Smart Contracts: Here.
Read about Tokenization.
Read about Bonds Issuance on Ethereum: Here.
Kunal is a management professional with 3 years of experience in the technology industry. He hails from Delhi, Republic of India.