Cardano is a fully decentralized cryptocurrency project that is developed based on open source software (open source). Experts and engineers from all over the world take part in the creation and development of the project.
Cardano - meet the ethereum killer in the guise of a samurai
Common in the world cryptocurrency I used to talk about Cardano that is "Japanese Ethereum" or "ethereum killer".
Names arose spontaneously as a result of two simple facts: the majority of investors and developers of the Cardano project come from Japan, and the main goal of the project was to solve the problem Ethereum associated with scalability and improvement of computability for smart-contractów in the network, including increasing the number of transactions per second tps.
Unlike most cryptocurrency projects, there is no single startup or group of students behind Cardano.
The Cardano project is an open project.
Any specialist with appropriate education and skills can contribute to its development.
The openness of the software and the openness of the Cardano foundation mean that the Cardano project is joined by specialists with academic facilities.
These specialists can conduct research on a "living organism" blockchain.
This is ensured by the layered construction of the entire project. The current developed layer of the project is CSL - Cardano Settlement Layeron which the portfolio, nodes and network operate.
The expanding layer is CCL - Cardano Computation Layerthey have to act on this layer smart contracty and decentralized applications (The so-called. Dapps).
With this solution you can make so-called soft forks on one layer making the project very susceptible to implementing new solutions in a given layer without damaging the other layers and without interference to the network itself Cardano.
Proof-of-Work and its disadvantages
One of the main assumptions of the Cardano project and cryptocurrency based on it ADA is basing the network on a mechanism that will ensure: energy saving, network security and decentralization.
In the proof-of-work model, transaction confirmation is done by any network users called network nodes and colloquially called “miners”, and they receive remuneration for confirming transactions.
The remuneration comes from the pool of coins allocated for it and the commission paid by network users in a given block.
At a time when Bitcoin was not very popular and the network difficulty was relatively low, everyone could afford to maintain their network node and "mine" the BTC cryptocurrency on their home computer.
This was in line with BTC's original vision of node disperse and decentralization. The original White Paper BTC at 4 tells us that one processor = one voice.
This means that the security and stability of the network should be ensured by the majority of nodes established by network users, where everyone has the same important vote.
Over time, however, the value of BTC grew, the number of users setting up their own node, and therefore "digging" the BTC cryptocurrency, also increased.
As a result, the difficulty of the network began to increase rapidly and ordinary processors soon became insufficient to "mine" the block. Special computing units were created to "mine" BTC.
Later, companies dealing with the production of devices intended for "digging" BTC, such as for example Bitmain.
In this way, the original vision was quickly distorted and now the main BTC nodes or mines are really great data centers for the network.
There would be nothing wrong with that energy consumption such a solution.
According to various calculations, the current annual electricity consumption of the BTC network may exceed at the end of the year 70TWh for comparison Poland consumes the whole year 142TWh !.
So it's a terrible waste of energy right now.
Another disadvantage following the above is the centralization of the main network nodes due to the high energy-intensive and high capital-intensive entry barrier.
Currently, the main BTC nodes (mines) are located in countries with relatively cheap electricity.
Proof-of-Stake and its disadvantages!
Currently, many cryptocurrencies are based on the principle Proof-of-Stake, this rule assumes that nodes do not need to perform increasingly difficult calculations to confirm transactions.
Each user can have his own node and the "work" done is counted for each one with a certain voting weight.
In most cases, the weight of the voice is affected by the amount of cryptocurrency you own on a given node.
In short, therefore, Proof-of-Stake can work on any computer, e.g. in the form of a wallet of a given cryptocurrency.
The amount of remuneration is calculated on the basis of an algorithm that takes into account the amount of coins in a given cryptocurrency.
This solution means that the network is not energy-consuming and to maintain it a fraction of the energy that is currently consumed by the network is sufficient BTC and regardless of the popularity of the cryptocurrency in the future.
In addition, this solution means that everyone can receive a remuneration regardless of their equipment, all you need is the right amount of coins on your wallet and here is unfortunately hook.
The problem is that the standard Proof-of-Stake model means that the user who has the most coins in circulation and starts the node will receive these coins; most of the pot.
So the richest user will get richer faster without leaving any chances to other users.
If we add to this the possibility of voting changes in the project where the voting power will depend on the number of coins held, we have a straight path to centralization i cryptocurrency murderagainst which he would successfully defend proof-of-work.
Cardano has a better solution based on Proof-of-Stake
Project Cardano improved the Proof-of-Stake algorithm by adding additional elements to it, their flagship algorithm describing the original Proof-of-Stake is called Ouroboros.
This algorithm works based on the following assumptions:
- lists epochs (epochs) i slots (slots) as time units specific to the operation of the algorithm. The slot lasts 20 seconds and the epoch takes 21 600 slots meaning 5 days.
- The salary is paid every one epoch.
- The salary for one epoch is divided according to one of two scenarios: in proportion to coins held at the beginning of the era or in proportion to the number of slots, during which stake pool was chosen as the leader. The algorithm introduces a voting system for the so-called leader. stake poola. Stake pool is nothing but an association of smaller nodes, which for the purposes of the article, let's call a network of nodes. Such an organization increases the chance of getting a reward from the block, Each such network of nodes has a specific leader. The prize is awarded to the leader and individual nodes belonging to the node network. This solution makes that even the richest node will not be able to act alone because the remaining smaller nodes may form a network of nodes that will have more coins and thus will receive a greater reward.
The algorithm does not favor the largest node networks. It does this in the following way: the maximum prize for one network of nodes can not be higher than 1 / k where k - number of nodes network.
For example: let's assume that the number of node networks in a given epoch was k = 100, the share of individual node networks, say A and B, was A = 0,3% and B = 12%, respectively, despite this, the network of B nodes will get the maximum remuneration of 1% because 1 / 100 = 1%.
In this way, large and rich networks of nodes will always get a limited reward, it affects the "traffic" between the nodal networks and prevents the formation of cartels consisting of the richest nodes.
Basic information about Cardano
Cardano has an ADA cryptocurrency: ADA has a named wallet Daedalus-the-wallet.
The wallet is dedicated to the ADA cryptocurrency. In circulation we have: 25 927 070 538 ADA the total number of tokens in circulation will be: 31 112 483 745 ADA. The technology behind the ADA and the scientific base of the foundation makes it one of the most interesting cryptanalytic projects.
If you want to buy the ADA currency from Cardano you can do it on one of the exchanges: