Cardano is a cryptocurrency and decentralized network built on blockchain technology. In addition to the popular Cardano cryptocurrency, the Cardano network enables smart contracts and decentralized apps (ĐApps) on its environmentally friendly software while maintaining the security provided by similar blockchains.
Stick around for a detailed look at how Cardano works, special features of Cardano, and how you can buy or get involved in the Cardano community.
What Is Cardano?
Cardano is a blockchain-based network that powers the Cardano cryptocurrency and other applications. In addition to the Cardano coin, which trades under the symbol ADA, the Cardano network is useful for smart contracts and other distributed applications.
The idea of Cardano came about in 2015 with the vision of addressing challenges of scale, interoperability, and sustainability faced by existing blockchain networks. The first version of the network and its currency, ADA, were launched in 2017.
ADA is named after 19th-century mathematician Ada Lovelace, who is credited as the first computer programmer.
There are three organizations that play an important role in the Cardano ecosystem. The network is maintained by the nonprofit Cardano Foundation, which is responsible for its governance and advancement. EMURGO is one of the founders of Cardano and is deemed the for-profit arm of the network involved in driving its commercial adoption. Blockchain infrastructure firm IOHK is the third partner, providing technology and engineering insights to the network.
Special Features of Cardano
ADA is the principal currency on the Cardano network and it also is used to pay for any fees incurred for transactions. It is considered to be more environmentally friendly compared to other cryptocurrencies because of the way transactions are verified on the Cardano network. But more on that a little later.
Outside of the environmentally friendly Cardano currency, the Cardano network powers smart contracts and ĐApps.
For example, developers at IOHK announced in April 2021 that they would build a platform using the Cardano network to handle needs such as escrow, operating centralized stablecoins, and tracking supply chains. In partnership with Scantrust, Cardano tracks supply chains of physical goods to combat fraud and track ownership histories.
Another interesting application the Cardano network offers is creation of your own multi-asset cryptocurrency tokens. While there are some requirements prescribed for the creation of such tokens, any fees or costs associated with such tokens must be settled using ADA.
Because Cardano ties to real-world business-use cases, it has become a popular coin many enthusiasts believe gives it a good chance for long-term success.
|Already Mined / Total Supply (as of July 26, 2021)||32.84 billion / 45 billion ADA|
|Special Feature||Powers smart contracts and ĐApps through a highly decentralized, environmentally sustainable network.|
How To Mine Cardano
Unlike some competing coins, such as Bitcoin and Litecoin, you can’t mine Cardano to create new coins. Cardano follows its own Ouroboros protocol and uses a proof-of-stake method to verify the creation of new blocks. This means that instead of miners solving complex problems, Cardano creates new blocks based on the stake participants control in the Cardano network.
People who own ADA can delegate their currency to stake pools that vote to select a stake leader for block creation. In return, those who stake their ADA are rewarded, and you can calculate your reward using this Cardano staking calculator.
This proof-of-stake method uses far less energy than the competitive proof-of-work networks where electricity hungry mining computers race to create the next block and earn a Bitcoin (or other coin) reward.
How To Buy/Invest in Cardano
Buying and investing in Cardano has become easier as its popularity increased. You can now buy ADA on most major cryptocurrency exchanges such as Coinbase, Kraken, and Bittrex, among others.
Cardano recommends two of its own wallets–Daedalus and Yoroi–to store, transact with, and stake ADA.
According to Cardano, it is not recommended to store ADA on exchanges as it increases the risk of fund loss.
Other ADA compatible wallets include hardware wallets such as Trezor Model T, Ledger Nano S, and Ledger Nano X. You may also consider Ellipal, Infinito Wallet, Atomic Wallet, Guarda, and Tangem.
According to cryptocurrency exchange Kraken, each ADA transaction requires 15 confirmations, which takes about 10 minutes to complete. Coinbase, on the other hand, requires 10 confirmations for an ADA transaction, but does not specify times.
Each ADA transaction incurs a minimal transaction cost on the network, which is calculated using a formula and paid in ADA. Fees charged by exchanges on which you transact may be additional.
Cardano is unique in its fee structure because the network fees don't only go to the block producer. It is shared among all block-producing stake pools.
The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.