Cardano is known as the third-generation of cryptocurrency that came to fix the issues, which Bitcoin and Ethereum are facing with. It developed by Charles Haskinson and a professional academic team. The team consists of scientists from University of Edinburg and Tokyo Institute of Technology.
Cardano’s platform has two layers. The first called Cardano Settlement Layer (CSL) that is used to run smart contracts and settle transactions. The second is ADA and is used as cryptocurrency of the platform. It aimed to use both as a medium of exchange and a platform to use smart contracts.
Cardano uses Proof of Stake algorithm to mine coins. The protocol modified to reduce time and energy for mining.
What is Cardano?
Cardano is a decentralized, blockchain based system developed by one of co-founders of Ethereum called Charles Haskinson. Its network powered by its cryptocurrency named ADA. As we talked in the last section about the team behind Cardano project, a Japanese company called Emurgo along with IOHK began developing it in 2015, and the first layer named ADA released in 2017.
In fact, it aimed to create a durable ecosystem in order to separate the usage of smart contracts and ADA transactions into different layers. To have a clearer view about Cardano, imagine Bitcoin and Ethereum. Bitcoin is a blockchain based financial system and on the other hand Ethereum is a blockchain based smart contract system. Now imagine a system that has the features of both of them in a more efficient way. Bitcoin known as a first generation of cryptocurrency followed by Ethereum as second. So, Cardano considers as third- generation of cryptocurrency.
Although it is much like Ethereum in running Decentralized Apps (Dapps), Cardano uses multiple layers. It means it has a separate layer to run ADA exchange and another layer to run the smart contracts. As we mentioned above these two layers consist of Cardano Settlement Layer (CSL) and its cryptocurrency called ADA that uses as fuel in the platform.
Cardano could attract many corporations and companies because it could play the role as a safe and quick currency exchange and also operates various smart contracts and applications smoothly. It could be a solution for the companies, which involving heavy uses of contracts and make it a suitable choice amongst those who need trustworthy systems to execute large financial contracts.
The applications (Dapps) created and executed on this platform use its currency (ADA) in the application’s virtual ecosystem and also use its Smart Contract technology to create an interactive, virtual economy.