ADA, the Cardano cryptocurrency, entered the market just recently, in October last year, but it already occupies the fifth position by market capitalization ($18.6 billion).
About the Cardano project
The Cardano Project was launched in 2015 by a group of investors and entrepreneurs headed by Charles Hoskinson—one of the first Ethereum developers. According to founders of the project, Cardano is to become an independent, decentralized cryptocurrency economy based on blockchain, smart contracts, and its native coin.
A group of researchers had been engaged for several years in the analysis of existing cryptocurrencies and blockchains to build a secure blockchain platform that would give users a new cryptocurrency and the opportunity to use numerous smart contracts. To achieve this goal, developers chose the Haskell coding language that provides a high level of security. The language is used to run smart contracts and decentralized applications on Cardano.
A new algorithm, Ouroboros, based on Proof-of-Stake was developed to achieve consensus on the network. So, to create a new block, the node is chosen at random in proportion to its share in the system. It is worth mentioning that the Ouroboros algorithm is an integral part of the Cardano network, which facilitates sidechains creation, allows protecting users' privacy, and supports the network cryptocurrency ADA.
The founders of the project are speaking openly about the need for regulatory control and regulation, including financial regulators. At the same time, they point out that users' confidential data must be protected. Cardano is planning to achieve these goals through innovative software architecture, namely:
To monitor the conditions of commercial relations carefully through smart contracts;
To use personal data for authentication by using hardware security modules (HSM);
To create a decentralized autonomous organization (DAO) in the future, as a tool for a modular regulation.
Advantage over Bitcoin
The key Cardano advantage over Bitcoin is that the Cardano network was designed in layers.
In other words, the developers divided the movement of value and computation into two independent levels. The first level is "making transactions"—Cardano Settlement Layer (CSL). It is designed for the conclusion and monitoring of transactions within the network and works like the value and transaction ledger.
The second "computing" level is Cardano Computation Layer (CCL). It is intended to run the code that is used in decentralized applications and smart contracts and can exist apart from CSL.
It is due to CSL and CCL levels that Cardano platform is flexible and does not require any forks to make any changes to its work. ...
The Cardano project includes three agencies, and each of them is responsible for a particular range of duties:
The Cardano Foundation acts as a supervisory and educational body for Cardano. Their mission is to standardize, protect, and promote the Cardano Protocol and its applications.
IOHK is a world-class engineering and technology company headed by Charles Hoskinson and committed to design, build, and maintain Cardano through to 2020.
Emurgo is the venture building entity in the Cardano ecosystem; its goal is to foster Cardano blockchain applications.
Expert opinions on Cardano
With the release of a new cryptocurrency, expert opinions—as it happens in most cases—are divided into "for," "against," and "it is early to judge."
One of the first critics was Daniel Larimer, co-founder of EOS platform and Bitshares cryptocurrency, CEO of Cryptonomex, and the Head of a decentralized social network Steemit. He published a post describing in detail the reasons for his doubts about the promising future for Cardano:
"Cardano’s Ouroboros algorithm is not mathematically secure due to bad assumptions regarding the relationship between stake and individual-judgment being distributed by the pareto principle. Furthemore, their algorithm is not “new” but a less secure slower variation of the DPOS algorithm I originally introduced in April 2014. I am going to go a step further and claim that much of the academic research and proofs performed by Cardano’s team only bolsters the support and justification of many core DPOS concepts, even if their approach is suboptimal compared to designs of EOS, BitShares, and Steem."
It is worth noting that the Cardano platform is a direct competitor of several Larimer's companies. Nevertheless, Litecoin founder, Charlie Lee, expressed his doubts about the rapid capitalization growth of a new cryptocurrency too. Last December, he posted the following tweets:
When the tweet drew Charles Hoskinson's (Cardano founder) attention, Charlie Lee explained the reasons for his surprise:
Harry Tucker, author of the Australian business edition Finder, predicts promising future for Cardano. In his opinion, if we think of Bitcoin as a first generation crypto, Ethereum as a second generation, Cardano is pitched as the third generation cryptocurrency. The Cardano project wants to solve the three biggest issues with current coins—sustainability, scalability, and interoperability. Moreover, Cardano has the potential to be the new default platform for decentralized applications development and smart contracts. The author with Bitsonline, William Pister, described the Cardano project as "blockchain 3.0."
Cryptocurrency ADA and how to buy it
Despite the fact that the Cardano cryptocurrency—ADA—entered the market only in early October last year, it is already popular among investors. Since its launch, the cryptocurrency price has increased by more than 600%. It is noteworthy that ADA was named after Ada Lovelace, who is the first female computer programmer.
To use ADA, you should first download Daedalus Wallet, the digital HD wallet, which is available for MacOS and Windows. The wallet allows you to send and receive the cryptocurrency and view transaction history.
Now you can perform any operations with ADA. According to the developers' plans, in the future, the wallet will support other cryptocurrencies, such as bitcoin and ether, and a mobile application for Android and iOS will be available.
This year, 25 ATMs with the new cryptocurrency will appear in Japan. ADA holders will also be able to get Cardano debit card that will make it possible to use ADA as any other currency, automatically converting ADA into local currency.