Tell me what´s Cardano!
With why.cardano.org exists a website just to explain this section. There are far too many points to consider why people began to work on it in 2015 as an open source project. Since one of the central people in the project, Charles Hoskins, who was also involved into Bitcoin and Ethereum, one motivation was to tackle the disadvantages of those projects like high energy consumption of bitcoin or problems with scalability of Ethereum in a scientific way.
An often cited goal of Cardano is
“to provide financial services to the three billion people who don’t have them”
Also have a look at this short video which explains the mission of Cardano from the perspective of the IOHK company, which is mainly responsible for developing the platform. There are a lot of uses cases like education, retail or government, where Cardano tries to solve current problems with the help of technology and a decentralized community and infrastructure.
Transparency and organization
The project is open source and fully available on GitHub. There is also a place where you can have a look at the recent, important updates in the code. Like other blockchain projects, it is also possible to have a fully transparent look inside the public chain: https://explorer.cardano.org/
The project is maintained by three key players:
- The cardano foundation is a swiss-based non-profit organization which supervises and oversees the advancements of the Cardano project. It is also the owner of the brand.
- IOHK, which is a tech company founded by Charles Hoskins and Jeremy Wood and is contracted to build, maintain and design the platform.
- Emburgo is also a blockchain company and responsible e.g. for the Yoroi wallet. It tries to drive adoption for commercial ventures.
Decentralized consensus between members and stakeholders of the network is one of the central achievements of blockchain technology. In the real world people have to trust each other or need a centralized instance like a notary to come to an arrangement.
On the blockchain this state is being reached with the help of cryptography and mathematics — I can have a deal, transaction or whatever with somebody I never saw in my life and still can be sure it will work out. Bitcoin for example uses Proof of Work (PoW) which requires physical work provided by the often criticized computing power, where the miners try to solve mathematical equitations to create a new block. The other big type of consensus is called Proof of Stake (PoS). It relies not on your computing power, but on your stake in the network — normally your amount of tokens you own. The PoS implementation of Cardano is called Ouroboros. The project claims that this is the first deeply reviewed PoS mechanism which can guarantee the same security level like PoS without having problems of scalability or high energy consumption.
On a high level the process works like that: Ouroboros divides the chain into epochs, which are then also split in time slots. The process elects a slot leader for each slot who is responsible for adding a block to the chain. The election is in direct relation to the stake the player owns in the network.
Like mining for bitcoin, the common term for the PoS algorithm is staking. There are two ways to earn rewards in the network: By delegating your stake (or parts of it) to a public staking pool or by running your own pool. The amount of stake (up to a limit) in a single pool is the primary factor of choice for the Ouroboros algorithm. You can delegate your Ada simply by downloading the Deadalus wallet and add stake to a public pool by choosing one from a moderated list.
Cardano recommends, like most other project, not to store your tokens longer than necessary on exchanges and move them to a wallet where you control the ownership via private key. You can choose between the full-node Deadalus Wallet and the light wallet version called Yoroi, which comes as a browser extension or mobile app.
With Deadalus you have to download a full copy of the whole blockchain locally and help to add trust and security to the network — Yoroi is the small alternative to just manage your amount of ADA which connects to trusted servers without having the blockchain available on its own.
While the network and the platform is called Cardano, people often mix up the term with Ada, which is the native token of the Cardano network to exchange value over the network. But it also plays a central role in the consensus of the network. Ada represents a stake in the network for a single participant which is used to validate the chain and add new blocks to the system.