Hey wait, but… what is Cardano?
Cardano is a third generation cryptocurrency network, based on a public and peer-reviewed blockchain, and aimed to run smart contracts.
Cardano development has a research-driven approach. That means that they first scientifically research, trying to figure out issues and problems before they arise, and the development of the solutions is part of the roadmap. That avoids many problems other cryptocurrencies had in the past and in the present, as the scaling problems of Bitcoin and the gas and transactions fees of Ethereum.
Likewise, developers can use the Cardano blockchain for many other features, including running custom programming logic (smart contracts, as said) and building programs (decentralized applications).
In a typical Proof of Stake algorithm, nodes with the maximum stake (or the highest number of coins) create transaction blocks in a blockchain. But the Ouroboros algorithm implements the algorithm differently.
Ouroboros divides physical time into epochs that are made up of slots, which are fixed periods of time. Slots are similar to working shifts at a factory. In Cardano, the time range encompassed by slots varies and can be modified within the algorithm. Epochs work in a circular fashion: when one ends, another one comes online.
Each epoch has a slot leader, who is elected by stakeholders or nodes that have already generated coins. Slot leaders are responsible for creating and confirming transaction blocks to be added to the Cardano blockchain. If they fail to create a transaction block in an epoch, then the next slot leader gets another shot at it during the next epoch. At least 50 percent or more blocks must be produced within a given epoch.
Cardano was conceptualized by Charles Hoskinson who happens to be one of the co-founders of Ethereum.
While Ethereum does an admirable job as a smart contract platform, according to Hoskinson it is a second generation blockchain and needed evolution. What makes Cardano extremely remarkable is the sheer amount of care that goes into its upkeep. There are three organizations which work full time to develop and take care of Cardano.
- The Cardano Foundation.
In 2015, along with Jeremy Wood, Hoskinson found IOHK (Input Output Hong Kong). IOHK is a “research and development company committed to using the peer-to-peer innovations of blockchain to build accessible financial services for all.” They have been contracted to build, design, and maintain Cardano until 2020.
Finally, we have Emurgo. Emurgo is a Japanese company that “develops, supports, and incubates commercial ventures who want to revolutionize their industries using blockchain technology.” Much of IOHK’s funding comes from a 5-year contract with Emurgo.
The Cardano network consists of pool stakes, that must have two tipes of running nodes. A block-producing node and at least one relay node.
The block producing node is the core one, and is on charge of managing the block minting. The block-producing node will only connect with it’s relay, while the relay will establish connections with other relays in the network.
There are two official software wallets for Cardano, and a couple of hardware ones.
- Daedalus. It’s the most powerful and used. When you running you are really running a mini-node of the network on your local machine, which connects to the Ouroboros Network. It has the disvantage of the installation process, because it downloads the whole blockchain to your computer.
- Yoroi. It’s a lightweigth wallet based on a browser extension. Their initial setup is much faster, and it have Android app. The downside is that some times the transactions have some delays, as it has to sync with the blockchain online.
- Ledger Nano. Ledger wallets are hardware devices that physically store the keys needed to operate and store your ADA. They are the most secure and reliable way to operate with Cardano and cryptocurrencies in general, but they cost money.
Cardano has all the elements to be the winner in the next race to be the global currency and financial network that rules the world in the future. With this post, you now have all the necessary knowledge to be part of Astropool and our proyect.
Wanna make this journey with us? Check the next post, How to stake cardano.