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  • Writer's pictureCastleCardano

Intro to Cardano

Updated: Sep 12, 2021

Welcome to the beginning of Quest 2 which will cover everything Cardano. If you are just beginning you may want to go through Quest 1 first which will give you the foundational knowledge of cryptocurrencies and blockchain.

What is Cardano?

It is very difficult to articulate everything Cardano is about in one sentence but here is an attempt:

Cardano is a 3rd generation, proof of stake blockchain that brings a fast, secure, trustless and sustainable global operating system through its years of peer reviewed scientific research and innovative industry leading technology.

The native cryptocurrency asset that fuels the Cardano blockchain is ADA. In this article we will dissect this statement and explain each part.

Cardano is a 3rd Generation Blockchain

1st Generation Blockchains (1999)

Bitcoin is a 1st generation blockchain that created a decentralized global currency that moved the power from governments and banks to the people. It's only functionality is to move Bitcoin via transactions.

2nd Generation Blockchains (2015)

Ethereum is a 2nd generation blockchain that took the decentralized philosophy of Bitcoin and added a second layer of logic and programability called smart contracts. This added an entirely new realm of possibilities besides just moving money. New cryptocurrencies could be created and transacted without needing a new blockchain. Decentralized applications (dApps) could run on the blockchain with no middle man while delivering services across a multitude of use cases such as financial loans, supply chain management, housing escrow, digital identity and more.

3rd Generation Blockchains (2017)

The newest generation of blockchains includes multiple blockchains such as Cardano/Ethereum 2.0/Polkadot. Cardano, which launched in 2017, led this generation by researching and publishing over 100 peer reviewed papers that redesigned how traditional blockchains work from the ground up. Everything they have created is open sourced and has even been "borrowed" and used by the competing 3rd generation blockchains due to its robust and revolutionary ideas.

Cardano's redesign solves 3 big problems that exist with the earlier generations:

  • Scalability - As the popularity of Ethereum grew it could not handle the massive influx of users on the network causing it to become much slower and very expensive to use.

  • Interoperability - Earlier generations are only able to support transactions on their own blockchain. The future will have many blockchains that specialize and focus on different use cases. The need for them to be able to transact and communicate with each other will be immense.

  • Sustainability - Blockchains are complicated ecosystems but not all are specifically designed to last. Similar to the water cycle that is critical for the sustainability of water on our planet, Cardano was designed to be able to support and sustain itself in the future. This is very important if people and business depend on the system. It does this through an on-chain treasury and democratic voting process that drives its self-evolving evolution. This allows the users of the network to govern and influence its evolution.

Cardano is a Proof of Stake (PoS) Blockchain

There are two main types of consensus algorithms blockchains use. Consensus algorithms are a complicated topic that will not be covered here but essentially they are responsible for the functionality and security of the blockchain. Their implications will be covered here.

  • Proof of Work (PoW) - Bitcoin and Ethereum use PoW which uses a tremendous amount of energy but its security has been tested over time.

  • Proof of Stake (PoS) - Cardano created a revolutionary protocol called Ouroboros that implements PoS in a secure way. It uses drastically less energy than traditional PoW protocols which makes it more inclusive for anyone to be a part of (you don't need lots of very powerful computers). Polkadot, Ethereum 2.0 and Tezos are some other examples of PoS blockchains.

Cardano is a Global Operating System

An operating system is a foundational layer of code that supports programs and applications that run on top of it. Traditionally one would think of Microsoft's Windows, Apple's macOS, and Google's Android as operating systems. There are many applications that run on these such as word processors, games, messaging apps, and more. In the same sense, Cardano allows decentralized applications (dApps) to run on top of it via smart contracts. These can be used to create new platforms such as decentralized finance (DeFi) that allows the instant trading of any asset.

But what makes a good operating system and why is Cardano uniquely qualified?

  • It is secure - It uses an extended version of the UTxO model that Bitcoin uses (eUTxO) which has been proven for over a decade to be trustworthy and secure.

  • It is sustainable - Where Microsoft has a team that maintains windows, Cardano has a continuous treasury and democratic government that funds and drives its maintenance and evolution.

  • It supports developers - The whole point of an operating system is to have applications that are developed to run on it. Cardano has made it a focus to deliver tools that make it easy for developers as well as a community that fosters their growth.

  • It is fast & cheap - Cardano's smart contracts are built into the native layer of the blockchain whereas Ethereum's are on a second layer built on top of its native layer. This has many advantages such as being more secure, faster, cheaper, and less complex for developers.

Explore more about Cardano from the official website:

Cardano Africa

It is important to mention Cardano's passionate mission to bring economic inclusiveness and identity to the continent of Africa. The most recent statistic shows 57% of Africa's population is unbanked and 41% cannot prove their identity. This is, in large part, due to the corrupted governments that make it very difficult for independent business to bring change to the region. A perfect use case for an immutable, incorruptible blockchain, Cardano can bring a new system that so desperately wants change by providing equal access to identity and finance for everyone.

Explore more about Cardano Africa from the official website:

Cardano Organizations

There are 3 separate organizations that contribute and support the Cardano ecosystem:

  • Input Output Hong Kong (IOHK) - Founded by Charles Hoskinson, it is a globally disperse blockchain development company contracted to design, build, and maintain the Cardano platform. This is the organization that drives the peer reviewed research across its many research labs in universities such as the University of Edinburgh, University of Wyoming and Tokyo Institute of Technology.

  • Cardano Foundation - An independent standards body that oversees and supervises the advancement of Cardano and the Cardano ecosystem.

  • EMURGO - Develops, supports, and incubates commercial opportunities and helps integrate businesses into the Cardano blockchain.


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