12th Aug 2021

Cardano: An Ethereum Killer?

Blockchain

Written By, Ankit Pareek

Overview

When it comes to decentralized applications the first thing that comes in our mind is the Blockchain on which all the decentralized application is run on, but there are also various types of Blockchains available in the decentralized world and from all these name there is also a type of Blockchain which is Cardano and the popularity it is gaining due to advance concepts it provides and the some challenges it solves faced by other popular Blockchains so, in this blog post I will give you a brief introduction about Cardano which it is called as third-generation Blockchain and why is it so…let’s just dive in.

What is Cardano?

Cardano is the third-generation proof-of-stake Blockchain which is based on the research-first driven approach. Cardano was first introduced in 2015 by the co-founder of ethereum ‘Charles Hoskinson’ aims to provide a balanced and sustainable environment for the cryptocurrencies.
The Platform is designed by the top engineers who have the expertise in the field of Blockchain and Cryptography. It is fully an open-source project and it mainly focuses on sustainability, scalability and transparency. It also has its own cryptocurrency called ‘ADA’ which is named after a lady Ada Lovelace who is known as the world’s first computer programmer.
Cardano is written in ‘Haskell’, a functional programming language which is said to be a very secure and Intelligent programming language as compared to other popular programming languages like Java, C, C++, etc. This type of programming is based on mathematical functions.

Why use Cardano?

As we know that Cardano is the third generation Blockchain which simply means it has some advanced features from both the prior generation Blockchain, let’s discuss it one by one. The first generation blockchain(Bitcoin) which was introduced in 2009 by Sathoshi Nakamoto, gives us the public ledger which records transactions immutably but the problem is we cannot do anything else from that or we cannot build applications on that. And then the Ethereum was introduced in 2013 by a programmer named Vitalik Buterin which gives us the second-generation blockchain in which the transactions is managed by writing Smart Contracts and one can create the Decentralized applications(DApps) on the top of the ethereum, but the problem with ethereum is it not scalable by which the network cannot handle network traffic sometimes which leads network down.
That’s where the Cardano comes into the picture which has both the functionality of the prior generations Blockchain as well as it also solves the challenges faced by both previous generation Blockchains. So we’ll discuss it one by one.

  1. Scalability :- Cardano is designed in such a way that its ledger is capable of handling large numbers of transactions at a time without affecting the network performance.Scalability also provides bandwidth which means that each transaction can contain or carry a significant amount of data which can easily be managed within the network.
  2. Interoperability :- It ensures that it is the most multi-function platform for financial businesses and commercial enterprises so this enables the users to not only interact with one type of currency but with multiple types of currencies having multiple Blockchains. Cardano is developed to support cross-chain transfers, multiple token types, mostly used smart contract languages.
  3. Sustainability :- Cardano is built in such a way that the developers community can continue its development by participating, proposing and implementing system improvements. Cardano uses proof-of-stack protocol so this itself ensures that this will be a self-sustained Blockchain.

Proof of Stake

All Blockchains use some consensus protocol to make the network reliable and maintain the ledger which is stored on all the nodes and to make the history of the blockchain true. So what makes the proof-of-stack protocol more beneficial as compared to proof-of-work protocol, So the proof-of-work is costly as it requires too much computational power to compute the hash which is not environment friendly and those miners who aren’t make it to find the correct hash are not being paid anything so this is something which needs to be solve. Then proof-of-stake comes into the picture which which is more of a environment friendly as compared to proof-of-work, In proof-of-stack the nodes will get selected to mine a new block by staking in which they stake their mined cryptocurrency in the network so more staking means more chances to mine and broadcast new blockchain in the Blockchain so this will will decide who will gonna mine new block and not all blocks are needed to use their computational power everytime.

proof-of-stake

About ADA and how to purchase it

As we have discussed earlier, ADA is the native or principal cryptocurrency of the Cardano Blockchain. This means that anything you want to make a payment for is done with ADA like fee payment or to make deposits and all the miners who are rewarded for mining get ADA cryptocurrency for that. Lovelace is the smallest denomination of the ADA cryptocurrency which means that 1 ADA = 1,000,000 Lovelaces, Yess…you all must be thinking that Bitcoin and Ethereum have denomination of 18 means 1 BTC = 1,000,000,000,000,000,000 because the thing here is ADA have 6 decimals which makes it easier for it to get divisible into fractions.
Cardano also provides an environment to create native tokens, so that the users, developers and businesses can create the tokens(digital assets) for specific purposes. We can create either the fungible(replaceable) or non-fungible(unique) tokens for payments, give rewards or Confidential information holders.

cardano-ada

Now you must have a question in your mind, how do i get it if i want to, so let’s follow some steps to buy ADA,

  1. First thing you must follow is to choose a wallet either browser or hard wallet which supports the ADA cryptocurrency and this wallet will help you store all of your cryptocurrencies.
  2. After choosing a wallet, just set up your wallet with a password and also you are given a seed phrase by which you can access your wallets accounts and balances but make sure to keep your seed phrase somewhere safer.
  3. Next step is to choose a cryptocurrency exchange portal which supports the ADA and then after choosing create your account there and then it will take some hours or days to verify your account.
  4. Then after verification is done, just sign into your account and select a buy/sell options which is usually at the top, click buy and choose the ADA(Cardano) the one you wish to purchase then enter the amount of ADA you want to purchase and then select the buying option by which you will pay you fiat currency to buy the ADA.
  5. Then after done with the payment the ADA will be transferred to the exchange account from where we will withdraw it to our account because it is not highly recommended to store any crypto there, so just enter your personal wallet address and withdrawn it into that and then you can check that you have received it or not and try withdrawing with small unit of amount to check everything is working fine and then withdraw the whole amount.
  6. Then just go to your wallet and select the account where you have withdrawn ADA to and check the balance of the ADA which you have purchased from the crypto exchange.

Conclusion

So this is the basic introduction which I have to give you in this Blog post as it is not yet to be best introduction but you can easily get the basic overview of the Cardano Blockchain and you can also tells someone about this and you can also go deeper into it and search or study a lot on it and you can also try to implement something by using tools provided by the Cardano and can build decentralized applications(DApps) with it, which helps you to solve real world problems. In the next blog post I will give you some implementation on cardano by using its given tools so stay tuned.

Reference Links

https://docs.cardano.org/introduction
https://blockchain.news/insight/cardano-price-bullish-momentum-ada-sixth-largest-marketcap
https://roadmap.cardano.org/en/

Written By,

Blockchain Developer at Yudiz Solutions Pvt. Ltd