Launched in 2017, Cardano is a decentralized public blockchain and cryptocurrency project which is fully open source and was built to support the creation of decentralized financial applications (dApps). It claims to have more advanced features than any protocol developed and to have the first currency to evolve out of scientific philosophy, academic theory, and peer-reviewed research. Appropriately, the platform takes its name from Gerolamo Cardano, an Italian polymath who is regarded as one of the greatest mathematicians of the Renaissance.
The native cryptocurrency of Cardano is called Ada (ADA), named after Ada Lovelace, a 19th-century mathematician (and daughter of Lord Byron) who is often referred to as the first computer programmer. The currency is integrated natively into Cardano’s settlement layer, making it an essential part of the platform; however, this is something that Cardano reportedly intends to supersede.
Ada enables users to send value over the internet securely and quickly. After launch, Ada had one official wallet called Daedalus. The circulating supply of Ada was 25 billion in 2018, with a maximum potential supply of 45 billion. Unlike most cryptocurrencies, Ada offers the ability to stake coins (essentially earn interest on holdings); however, due to the limited number of coins, the block reward is expected to drop over time.
Cardano is spearheaded by three entities, each of which is separately owned and managed. The first is the non-profit Cardano Foundation, an independent body based in Switzerland with core responsibilities to help supervise the development of Cardano and its ecosystem. The second entity is Input Output HK (IOHK) which is contracted to design and build Cardano. The third is Emurgo, a Japanese incubator acting as the for-profit arm working to boost the Cardano ecosystem through commercial ventures.
Rather than stemming from a whitepaper, Cardano is the result of a number of academic papers. The goal being that considerable peer review efforts via academic partnerships will ensure that Cardano is built and operated using qualitative ‘high assurance code.’ Cardano is being developed using Haskell, a programming language unique to the platform, featuring a high degree of fault tolerance. Smart contracts are created in another functional language called Plutus which enables stricter contracts.
Like Ethereum, Cardano is a smart contract platform. It features a unique consensus algorithm (called Ouroboros) that validates transactions without high energy costs, aiming to dramatically increase transactions per second while boosting computational power. The platform is considered ‘third-generation’ and is intended to improve on second-generation platforms like Ethereum and first-generation platforms like Bitcoin. This is partly achieved by employing the ‘Ouroboros proof-of-stake’ model rather than a proof-of-work model.
Both Ethereum and Cardano (or IOHK, the entity that designs and builds Cardano) were co-founded by Charles Hoskinson. Charles is a Colorado-based technology entrepreneur and mathematician who also founded a third cryptocurrency-related start-up – Invictus Innovations.
IOHK’s second founder, Jeremy Wood, was formerly Manager of Operations at Ethereum, which he left to consult various entities on cryptocurrencies before co-founding Input Output.
A key focus of Cardano is to use its coin and technology to provide assistance in countries with an acute lack of access to banking. Cardano has explicitly stated that its currency’s ultimate value will be based upon hard work, real-world use, and the utility of the platform, not on making day traders rich.