Cardano is a Blockchain network whose digital currency is called “Ada”. This network can be used to transfer digital money as well as record smart contracts and build decentralized applications. In a way, Cardano is a competitor to Ethereum, IAS and other smart contract platforms. In this article, you will learn about Cardano, how it works, its wallets and how to buy this digital currency.
What is Cardano?
Cardano is a blockchain-based platform that, like Ethereum, enables the creation and execution of smart contracts; The difference is that Cardano calls itself a pioneer in the “third generation of the Blockchain” and its security is provided by the use of multi-layered architecture. According to the Cardano team, the network speeds and fees are much better than older blockchains such as Ethereum.
According to the development team, Cardano is the first Blockchain project designed with the scientific philosophy and research of scientists. Work on the project began in 2015, and Cardano digital currency (Ada) was released to exchange offices in December 2017.
As mentioned, like Ethereum, decentralized applications can be built on this blockchain using Cardano and the possibility of creating smart contracts; Programs that no one can stop.
The Cardano team takes into account both the needs of the user and the regulator. They try to strike a balance between legal issues and user privacy.
Cardano is also called the “Japanese Ethereum” because most of the developers and early investors in the project are Japanese and bear a strong resemblance to Ethereum.
A Brief History of Cardano
The founder of Cardano is Charles Hoskinson, who was himself a member of the Ethereum team. In 2015, the Cardano project was launched and researched for two years to find solutions to the Ethereum and Bitcoin problems. Cardano was able to solve scalability issues in Bitcoin and smart contracts in Ethereum by creating new processes for verifying transactions and creating blocks.
Charles Haskinson considers bitcoin from the first generation of the Blockchain and Ethereum from the second generation of the Blockchain. According to him, we need a third generation of blockchains, which Cardano will meet.
The following three foundations and companies are currently working on the development of Cardano:
- The Cardano Foundation
In addition to the above companies, dozens of other teams are working separately on Cardano’s open source code and building decentralized applications on it.
After two years of research and testing, on September 28, 2017 (October 6, 1996), Cardano’s core network was launched and shortly afterwards, Cardano’s digital currency (Ada) was added to the list of Bitrex, the largest digital currency exchange at the time.
How does Cardano work?
Unlike many other digital currencies, such as Bitcoin, which use the Proof Of Work method to maintain network security and verify transactions, Cardano uses the Proof Of Stake algorithm.
What is proof of doing work?
Proof of work in a digital blockchain network with a separate Blockchain, such as Bitcoin, Ethereum, LightCoin, and و is a security algorithm designed to prevent network attacks. According to this algorithm, volunteers named “Miner” help maintain network security and reward themselves by providing their computer hardware processing power to the network.
The concept of proof of work was used even before Bitcoin, but Satoshi Nakamoto, the anonymous creator of Bitcoin, used this technique in an innovative way in his revolutionary digital currency.
To control or attack a work-based network, a person has to have more than 51% of the total processing power of the network, which is not economically justified in large networks such as Bitcoin.
What is stock proof?
Proof of shares is a different way to validate transactions and create new blocks for the Blockchaink. In this algorithm, people have to buy some digital currency (for example, Cardano) and allocate it to the network in a wallet to participate in transaction validation and blockchain work. In this way, they can participate in the verification of transactions and receive new digital currency units (Cardano). Participants charge network transaction fees.
This eliminates the need to purchase expensive hardware to participate in the network. Proof of stock also greatly improves scalability (speed and commission of transactions).
Using stock proof, if someone wants to attack the network and take control of it, they have to buy more than 51% of all digital currency units (like Cardano) and allocate it to the network. Buying 51% of the total units of a digital currency is very difficult and based on the principle of supply and demand in the market is almost impossible. If one can do this assuming it is impossible, by attacking the network and destroying its security, the price of digital currency will fall sharply and the attacker himself will suffer a heavy loss.
In fact, in proving a stock, the participant ensures that it is not a destructive factor for the network by allocating its assets.
Orobrus: Proof of a different stock
The stock proof algorithm is called Ouroboros. In this algorithm, real time is divided into time periods (epochs). Each time period is itself subdivided into shorter time periods called “slots”. These time periods act like shift workers in a factory; That is, when one time period ends, the work of another time period begins.
In the Cardano project, the time range of the slots is different and can be changed in its algorithm.
Each slot has a leader called a slot leader (SL). This leader is elected by the Cardano Unit Holders (ADA) with their vote on the network.
These slot leaders are responsible for creating and approving block transactions that are added to the Cardano blockchain. Each leader can only produce one block. This mechanism makes it impossible to produce more than a certain number of blocks in a given period of time.
If the leader in a slot responsible for creating the block and verifying its transactions fails to do its job (for example, it is not online), then it loses the right to generate the block and is not rewarded.
One or more slots can be empty of blocks, but most blocks (at least 50%) must be generated over a period of time (epoch).
Transactions generated by slot leaders are approved by Input Endorsers. These input verifiers are the second set of coin holders responsible for enforcing the protocol. There may be from one to several approvers in a given time period. The voting rights of each of these verifiers to approve the transactions are based on the number of coins they hold.
This means that the more ADA coins a person has, the more voting rights they can have to approve transactions.
This voting system is based on two inputs to ensure that the results of transaction approval are neutral.
The initial system is a computational system with several participants. A group of coin holders perform calculations on the net and share the results with each other.
The second system is based on the distribution of wealth or stocks. Nodes with more coins are more likely to be chosen as the leader of a slot.
The main focus of the Cardano project is on solving the problem of scalability. For this purpose, the Cardano project uses a technology called RINA. Reina is a new type of networking that aims to build a network that offers privacy, transparency, and scalability. In other words, Reina allows Cardano not to change the speed of transactions and the cost of transactions by increasing the volume of transactions to thousands of transactions per second.
Cardano uses a two-tier structure to do this:
CSL consensus layer
The CSL layer is the first layer of the Cardano platform and aims to use a stock-based consensus (PoS) algorithm to create new blocks and verify transactions.
Computational Layer (CCL)
This layer is the second layer of the Cardano platform and contains information on how to perform transactions.
Although the Transaction Processing (CCL) layer is separate from the Consensus and Confirmation Transaction (CSL) layer, Cardano users can use the CCL computation layer to create different rules on the CSL consensus layer when reviewing transactions. Apply.
For example, using the CCL computing layer can create a general ledger that does not record suspicious and anonymous transactions in the CSL consensus layer.
The name of Cardano Currency is “Ada”. This digital currency has a limited number and will eventually generate 45,000,000,000 units.
On October 2, 2017 (ada 10 October 1996), ada was offered at a price of $ 0.02 per unit in Bitrex Exchange, the largest digital currency exchange of that time, and soon began to jump.
On January 4, 2018, Cardano, along with the entire digital currency market, reached the highest price in history, $ 1.22, with a 6,000 percent increase over its original price.
After peaking, Cardano, like most other digital currencies, plummeted in a long-term downturn known as the “winter of digital currencies.” After that, the price recovered slightly in 2019, and now that we are writing this, each Ada unit is priced at around $ 0.05, which is about 130% higher than the initial offering price.
Despite the sharp decline, Cardano, with his development and popularity, was able to remain at the top of the market and continue to fight for big positions such as Ethereum and IAS.
Although Cardano tops the digital currency chart, it does not offer many wallets.
Cardano’s official wallet is “Daedalus”, which is currently only installed on personal computers. This wallet is completely decentralized and secure and is available for Windows, Linux and Mac operating systems. To use this wallet, you need to download a few gigabytes of Cardano Blockchain. From Cardano official site You can get the official wallet of this digital currency.
In addition to Daedalus, there are several unofficial Cardano storage wallets that allow you to store, receive and send Ada units without having to download the Blockchain. These wallets include the following:
- Ledger Hardware Wallet
- Trezor Model T Hardware Wallet
- Yoroi software wallet
- Atomic software wallet
Also read: The best Cardano wallets
Don’t forget to make a backup of a digital currency wallet before using it. Backup wallets usually give you a set of 12 English words that you should write down in a safe place. You can recover your assets if your wallet is deleted or any other problem. If you do not back up your wallet, you will never be able to recover your assets by deleting your wallet, stealing or damaging your device.
How to buy Cardano?
To buy Cardano, it is best to visit a digital currency exchange site. Users living in Iran usually use one of the following two methods to buy Cardano from an online exchange:
- Direct purchase of Cardano from Iranian sites with Rials and bank card
- Buy Bitcoin or Tetra from Iranian sites with Rials and bank cards and then convert it into Cardano in foreign exchanges such as Bainance
You can search Google to find Iranian websites that sell Cardano Rials and after registering in them, buy Cardano directly with your bank card. However, since most Iranian sites do not have Cardano in their list of currencies or the cost of the purchase is high, most investors use the second method; Buy Bitcoin or Tetra from domestic sites and then convert it to Cardano in foreign digital currency exchanges such as Bainance.
List of international exchanges that support Cardano This link Is visible. Note that international exchanges do not allow users living in Iran to operate due to sanctions, and there is a risk of account blocking. However, most Iranian users currently use Bainance, which of course must be changed before using IP. In the “Bainance Exchange Training” article, you can learn how to convert digital currencies in this exchange.