Cardano: everything you need to know about ADA

What is Cardano?

Cardano, like Ethereum, is a platform for decentralized applications and uses its own token called ADA. The academics behind the project build upon mathematics and scientific philosophy. 

The Cardano blockchain platform is named after Girolamo Cardano, an Italian physician and universal scientist. Cardano made the first systematic calculations of probabilities, making significant contributions to information technology. The platform's digital token is named after the daughter of poet Lord Byron, Ada Lovelace, who was a mathematician and the world's first computer programmer. 

Hoe does Cardano work?

Like other cryptocurrencies, Cardano (ADA) is a digital currency that can be used to store value or send and receive money. This is not very different from other cryptocurrencies like Ethereum and Bitcoin, but ADA also has other applications: 

• A Proof-of-Stake blockchain protocol, where ADA is staked to the blockchain. Those who stake their ADA on the blockchain are rewarded for their efforts with more Cardano cryptocurrency. This staking system helps maintain the security of the entire blockchain. 
• The use of ADA in voting. Unlike other blockchain projects, it's not miners who vote and decide on changes to the protocol; it's the token holders. This way, anyone holding the cryptocurrency has a say in its development.

The ADA-token

The ADA token runs on the Cardano blockchain, a first-of-its-kind decentralized network based entirely on scientific and mathematical principles and designed by experts in cryptography and engineering. The Cardano blockchain can be used to build smart contracts and, in turn, decentralized applications and protocols. 

Cardano aims to solve many of the current issues in the blockchain industry, including through: 

• Using mathematics to provide a provably secure blockchain that is less susceptible to attacks. 
• Separating accounting and computation layers. 
• Creating a secure voting mechanism for token holders. 
• A consensus mechanism that is infinitely scalable. 

The Technology Behind ADA

The Cardano platform consists of a layered blockchain structure that improves transaction flexibility and simplifies maintenance. Because the layered structure provides better access to various platform features, there is more room for upgrades through soft forks. A soft fork is a change in software protocols where previously valid transactions are made invalid so participants can add new transaction types. 

The platform uses a settlement layer, designed to run the digital token ADA, used for transactions. A separate computational layer is used for handling smart contracts, which utilize the Ouroboros Proof of Stake model. 

Blockchain architecture

The Cardano blockchain consists of two core components. The Cardano Settlement Layer (CSL) serves as the accounting unit and is where token holders can immediately send and receive ADA with minimal transaction fees. The Cardano Computational Layer (CCL) is a set of protocols that form the backbone of the blockchain, helping execute smart contracts. It also ensures security and compliance and enables other advanced functionalities, such as blacklisting and identity recognition. Cardano's open-source code is written using Haskell, a universally recognized and secure programming language. 

Cardano operates on a specially designed proof-of-stake (PoS) blockchain consensus protocol called Ouroboros. This consensus mechanism ensures that ADA can be easily and securely sent and received at all times while also safeguarding the security of smart contracts on the Cardano blockchain. Simultaneously, as a PoS consensus mechanism, Ouroboros offers rewards to token holders who stake their ADA on the network and help ensure network consensus. 

Ouroboros

The biggest advantage of Ouroboros is the mathematical security in selecting blockchain validators. Other blockchains claim to randomly choose block validators, but these claims are unverifiable. In contrast, Ouroboros offers a provable way to randomly select a validator and ensure that all ADA token holders staking on the Cardano blockchain have a fair chance to mine a block and receive the associated reward. This eliminates the need for excessive computational power often seen in proof-of-work (PoW) blockchain networks and guarantees an objectively fair staking model not found in any other PoS blockchain protocol. 

Daedalus wallet

Unlike other major cryptocurrencies like Bitcoin and Ethereum, Cardano has its own wallet for ADA cryptocurrency. With the Daedalus wallet, users not only get a wallet but a full blockchain node, giving them complete control over their funds and the ability to ensure transparency of the Cardano blockchain. 

Moreover, Daedalus is the only wallet where ADA holders can participate in the Cardano staking system. As Cardano employs a PoS blockchain protocol, as mentioned earlier, token holders can earn rewards by delegating ADA or running a staking pool within the Daedalus wallet. This gives Cardano (ADA) holders the opportunity to earn cryptocurrency while supporting the network. 

Benefits of Cardano

Many savvy traders have an interest in Cardano. What are the main reasons to invest in this coin? 

• High scalability. 
• Environmentally friendly ecosystem. 
• Multilayer cryptographic security. 
• Peer-reviewed network. 
• Fast transactions possible. 

Drawbacks of Cardano

There are opportunities to be found everywhere, but often there's a catch. What should you consider when investing in Cardano? 

• While Cardano has been highly praised for years, can the coin live up to its expectations? Cardano doesn't have nearly as extensive a track record as, say, Bitcoin, and competition among altcoins is fierce. 
• The academic background of founder Charles Hoskinson has been questioned multiple times. Also, his promises from the past, such as having hundreds of assets on the network by 2021, didn't come to fruition. 

Who is the founder of Cardano?

De oprichters van Cardano ADA, Charles Hoskinson en Jeremy Wood, zijn twee van de meest invloedrijke figuren in de cryptocurrency-industrie. Hun visie voor een nieuwe generatie van cryptocurrency was baanbrekend. Hun platform wil revolutie teweegbrengen in de manier waarop mensen omgaan met digitale activa. Met hun expertise en toewijding aan innovatie helpen Hoskinson en Wood de toekomst van blockchaintechnologie vorm te geven.

Price forecasts for Cardano

In 2026 experts expect a minimal price of €1.39 and a minimal price of €4.61 in 2031.

Frequently asked questions