Cardano: Blockchain With A Scientific Philosophy
Updated: Apr 7, 2020
Consensus algorithm: Proof-of-Stake (PoS) called "Ouroboros"
Native blockchain: The Cardano Blockchain
Release date: 2015
Supply: 25.927 billion (as at July 2019)
Official website: https://www.cardano.org/en/home/
What is Cardano?
Cardano is a decentralised public blockchain and cryptocurrency project and is fully open source. Cardano claims to be developing a smart contract platform which seeks to deliver more advanced features than any protocol previously developed. It is the first blockchain platform to evolve out of a scientific philosophy and a research-first driven approach. The development team consists of a large global collective of expert engineers and researchers.
Cardano is a project that began in 2015 as an effort to change the way cryptocurrencies are designed and developed. The overall focus beyond a particular set of innovations is to provide a more balanced and sustainable ecosystem that better accounts for the needs of its users as well as other systems seeking integration.
In the spirit of many open source projects, Cardano did not begin with a comprehensive roadmap or even an authoritative white paper. Instead it embraced a collection of design principles, engineering best practices and avenues for exploration.
From this unstructured set of ideas, the principals working on Cardano began both to explore cryptocurrency literature and to build a toolset of abstractions. The output of this research is IOHK’s extensive library of papers, numerous survey results such as this recent scripting language overview as well as an Ontology of Smart Contracts, and the Scorex project. Lessons yielded an appreciation for the cryptocurrency industry’s unusual and at times counterproductive growth.
Cardano's large team of expert engineers and researchers drawn from around the world started by deconstructing the concept of a cryptocurrency. Then, incorporating their "Proof of Stake" algorithm, Ouroboros, the IOHK team employed a first principles approach driven by peer reviewed academic research to build Cardano from the ground up.
This uniquely collaborative effort steadily constructed what they claim is the 'most precisely engineered cryptocurrency' yet - a product that brings together such disciplines as distributed systems, mechanism design and cryptography. The result is the first cryptocurrency to be based in Haskell code, an industrial strength product that delivers the resilience necessary for mission-critical systems, in this case securing investment.
Completely open source and patent-free, Cardano was built in a spirit of collaboration.
"Proof-of-Stake" Mining with Ouroboros
Cardano uses a new proof-of-stake algorithm called 'Ouroboros', which determines how individual nodes reach consensus about the network.
The algorithm is a crucial part of the infrastructure that supports the Ada cryptocurrency and is a major innovation in blockchain technology.
Ouroboros eliminates the need for an energy-hungry proof-of-work protocol, which stands as a barrier to blockchain scaling up for much wider use.
Designed by a team led by IOHK Chief Scientist, Professor Aggelos Kiayias, Ouroboros is the first proof of stake protocol that has mathematically been shown to be provably secure, and the first to have gone through peer review through its acceptance to Crypto 2017, the leading cryptography conference.
What is Proof-of-Stake?
In "proof-of-work", the algorithm used by the Bitcoin blockchain, miners invest computing power to compete to be chosen as the leader who gets to make the next block and win a reward for doing so. By contrast, in proof of stake, the stakeholder who will form the next block is randomly selected, proportionally to the size of the stake that they have, according to the blockchain ledger.
“Proof” means having evidence that blocks of transactions are legitimate. “Stake” means the relative value held by addresses on the node. “Relative value” is all the value held by wallets on a particular node divided by total value in the system.
There have been a number of attempts by other cryptocurrencies to develop a proof of stake algorithm, although these protocols have suffered from flaws and have not been shown to be provably secure.
For a blockchain to be secure, the means of selecting a stakeholder to make a block must be truly random. An innovation of Ouroboros to produce the randomness for the leader election process is to do this by way of a secure, multiparty implementation of a coin-flipping protocol.
Daedalus - The Ada Cryptocurrency Wallet
To use Ada you must download Daedalus. Daedalus is a secure, multi-platform wallet for the Ada cryptocurrency.
Daedalus allows you to send and receive Ada, and view a history of the transactions you have made.
For more information about Ada transactions that have taken place and about the Cardano blockchain itself, you can use the Cardano Block Explorer. This specially built tool can be used to search for transactions. You can also see information about the state of blockchain, for example about its slots and epochs.
Beyond being used to send and receive Ada, the Daedalus wallet has many special features, which make it easy to use and give you a high degree of confidence about its security.
Encrypted private keys and spending passwords, offering protection against security threats such as malware.
Wallets can be exported to paper certificates, giving the maximum security option of placing funds in cold storage.
Ada redemption is built directly into Daedalus and supports encrypted and unencrypted redemption certificates.
Configurable transaction assurance level monitoring, allowing users to be sure when transactions become irreversible.
Engineers are in the process of designing and building many more useful features.
Plans for development include:
Ethereum Classic and Bitcoin support.
A mobile wallet for Android and iOS.
Staking, which enables Ada holders to participate in the block generation process, and earn more of the currency.
An application store with community-built applications and support for virtually any cryptocurrency.
The Cardano Support Network
There are three organisations that are contributing to the development of Cardano.
1. The Cardano Foundation
The first is the Cardano Foundation, an independent standards body based in Switzerland with core responsibilities to support the community of Cardano users and to work with authorities on regulatory and commercial matters.
The Cardano Foundation's main goals are to:
To Study and Propose Blockchain and Cryptocurrency Regulation
To act as a Blockchain and Cryptocurrency Standards Body
To Protect, Enhance and Evolve the Cardano Ecosystem
To Aggregate, Educate and Grow the Cardano Community
To Serve as an Objective Organization for Enterprises to Join
The second entity working on Cardano is IOHK.
Founded in 2015 by Charles Hoskinson and Jeremy Wood, IOHK is a world-class engineering and technology company committed to using peer-to-peer innovations to provide financial services to three billion people that don’t have them. The group is contracted to design, build, and maintain the Cardano platform through to 2020.
The final business partner is Emurgo.
The role of Emurgo is to develop, support, and incubate commercial ventures and help integrate these businesses into Cardano’s decentralised blockchain ecosystem.
Emurgo is investment focused and invests in two ways:
Through direct investment into start-up ventures, and
By developing commercial partners who want to use blockchain technology to revolutionize their industries.
Emurgo has established research and development centers in key geographies such as the Philippines, South Korea, and Vietnam, and has headquarters in Japan.
In the first phase of building the community Emurgo wants to focus on establishing infrastructure so it can later deploy funds to strategic projects and application builders.
Emurgo will grow the community by helping existing companies implement a blockchain strategy and develop decentralized applications on Cardano software for key industries. Companies can get assistance from specialized ventures in the Emurgo community such as Emurgo Finance, Emurgo Legal, and Emurgo Logistics which will focus on developing commercial applications for businesses seeking solutions in their respective fields.