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Your Ultimate Guide to Cardano (ADA) Crypto
Cardano is an open-source, decentralized blockchain platform that supports smart contracts and uses the ADA cryptocurrency. The project distinguishes itself through a research-driven development approach, with each protocol upgrade based on peer-reviewed academic research and formal verification methods.
In this article, we’ll explore how the platformworks, what sets it apart from other blockchain platforms, and where you can buy ADA tokens.
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Cardano Pros & Cons
Pros
Fully open source
Code built from scratch by collective of experts and audited externally
Platform is designed to handle enterprise level usage (i.e. a bank)
Provably secure proof of stake algorithm
Cons
Project is designed to be long-term; risk of competition arising before completion
ADA Ratings
Supply
- Max Supply: 45,000,000,000 ADA
Network Speed
- Rating: Medium
- Reason: According to a test in 2017, the network is able to handle 257tx/s, with potential to scale beyond 1000tx/s.
Disbursement
- Rating: Medium
- Reason: The disbursement of ADA is well documented thanks to adascan. The top 1000 addresses hold 37% of the total supply. The top 10000 addresses hold 68% of the supply. This is an uncomfortable level of centralization, especially within a proof of stake ecosystem.
Developer Engagement
- Rating: High
- Reason: The platform has one of the most active GitHub repositories in the cryptocurrency ecosystem. With an impressive FCAS score of 950, the project is moving at a staggering rate. The repository can be visited here.
Liquidity
- Rating: Medium
- Reason: ADA launched in 2017, and given its limited time on the world stage, it is impressive to see what its accomplished in terms of market cap. ADA is traded on most global cryptocurrency exchanges, including Binance and Kraken, with a daily volume frequently topping $100 million.
General Overview of Cardano
Cardano’s development team consists of a large global collective of expert engineers and researchers. There are three main organizations overseeing the project: Input Output Hong Kong (IOHK) is in charge of engineering, Emurgo is in charge of business, and the Cardano Foundation which is in charge of community leadership.
ADA is the native token of the platform, which can be used to send and receive digital funds. The blockchain uses the proof of stake (POS) consensus method. The platform is being constructed in layers, which gives the system the flexibility to be more easily maintained and allows for upgrades by way of forks. After the settlement layer of ADA is complete, a separate computing layer will be built to handle smart contracts. the blockchain will also run decentralized applications, services that operate autonomously on a blockchain.
History of Cardano
Cardano was conceptualized by one of the co-founders of Ethereum, Charles Hoskinson.
Hoskinson felt that while Bitcoin and Ethereum were fine projects, they were just the first two generations, Bitcoin being the first to enable the transference of currency without a middleman, and Ethereum building upon that and introducing smart contracts to help govern the transference of currency, services, property or anything of value. Cardano is a third-generation project, building upon both of those generations accomplishments but road mapping a solution to the issues of scalability, interoperability, and sustainability.
How Does Cardano Work?
The platform addresses three major challenges facing cryptocurrency adoption: scalability, interoperability, and sustainability.
For scalability, the network uses Ouroboros, a peer-reviewed proof of stake consensus mechanism that’s far more efficient than proof of work systems. Its modular design supports features like delegation, sidechains, and adaptable synchronization assumptions, enabling the protocol to adjust as user numbers grow.
Interoperability is tackled through sidechains that enable seamless transactions between different blockchain ecosystems without intermediaries. These sidechains maintain a 1:1 peg with external assets like Bitcoin as they move in and out of the network. The platform also bridges traditional financial systems by allowing private transaction data to be selectively attached when needed for regulatory compliance, balancing privacy with anti-money laundering requirements.
Sustainability comes from a built-in treasury system funded by a portion of each block reward. Stakeholders vote on how these funds are distributed for future development, creating a self-funding model that becomes more decentralized as the network grows and gains more participants.
How Do I Buy Cardano?
You can buy ADA through a cryptocurrency exchange. Every exchange is a little different but there are numerous ones that offer Cardano. On some exchanges, you’ll be able to purchase directly with fiat (USD, EUR, CAD) etc, but it’s very common to swap another cryptocurrency like Bitcoin for ADA.
Here are some exchanges that offer Cardano:
Should You Use Cardano?
The platform offers several key benefits. It’s fully open source, built by blockchain experts, uses peer-reviewed code, and features a proven secure consensus algorithm. Two standout advantages are protocol flexibility and the separation of core functions into distinct layers.
Protocol flexibility allows network upgrades to occur smoothly when users reach consensus. Hard forks can implement new rules and continue the blockchain without creating new assets or causing major disruptions.
The architecture uses two separate layers: the Settlement Layer handles account balances and token transfers using proof of stake. The Computation Layer manages the logic and conditions for those transfers. This separation enables customized transaction rules and supports the project’s interoperability goals, particularly for regulatory compliance scenarios where specific conditions must be met.
The main consideration is the project’s ambitious scope and research-first approach, which prioritizes correctness over speed. This methodology means development timelines can be lengthy, potentially allowing competitors to launch similar features first. Whether this matters depends on your investment philosophy. Some view thorough development as an advantage, while others prefer faster execution.
As with any cryptocurrency investment, conduct your own research to determine if this approach aligns with your expectations.
Cardano Frequently Asked Questions
Yes! The platform is similar to Ethereum for two reasons. The first is that the platform was conceptualized by a co-founder of Ethereum, Charles Hoskinson. The second is they are both blockchains designed to run smart contracts. The two projects are not related otherwise, as Hoskinson left Ethereum because he felt the vision of the project did not cover the full scope of possible issues faced by cryptocurrencies.
There is no actual owner. The project is open source and decentralized. Three organizations, Input Output Hong Kong, Emurgo, and the Cardano Foundation, oversee the project but have no power to affect the network without getting the network users’ permission.
It takes about 20 seconds for a transaction to be validated by the network.
There is currently one verified source of free Cardano: https://freecardano.com/
In order to receive free Cardano you first need a wallet that can store ADA, like the platform’s own wallet Daedalus. Then you just participate on the website by completing games every hour and receiving free ADA as a reward. Please visit the website for more details.
The platform has many advanced features including its two-layer system, its flexibility and its Ouroboros consensus algorithm.
No, it is not possible to use any cryptocurrency directly on Amazon.
It is a fairly new project that has not caught mainstream attention like Bitcoin or Ethereum. The relative price per share (ADA) is low because the total supply is large – 45 billion ADA is currently in circulation.
ADA is a reference to Ada Lovelace who is often referred to as the first computer programmer. The platform named their cryptocurrency after her.
Yes, you can buy Cardano on Coinbase.
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