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September 17, 2018

Coin Profile: Cardano (ADA)

A decentralized, open blockchain and cryptocurrency project.

Coin Market Cap Rank:  10
Current Market Cap: $1,788,254,769
Website: https://www.cardano.org

 

If there is an alternative cryptocurrency (altcoin) more interesting than Ethereum, it’s Cardano – otherwise known as ‘ADA’ on the coin market cap. Respectively, Cardano ADA was founded by Ethereum co-founder, Charles Hoskinson; along with Jeremy Wood.

According to Cardano, “A major innovation of Cardano is that it will balance the needs of users with those of regulators, and in doing so combine privacy with regulation. The vision for Cardano is that its new style of regulated computing will bring greater financial inclusion by providing open access for all to fair financial service.”

Unlike Ethereum, Cardano uses layered architecture on its smart contract platform in order to integrate security and ensure the capacity to change in size. ADA is the world’s first cryptocurrency created from scientific philosophy, and a peer-reviewed and research-first driven approach.

 

What is Cardano (ADA)?

Cardano ADA

Cardano was developed in 2015 by Charles Hoskinson and Jeremy Wood. However, 3 organisations have contributed to the development of Cardano ADA – the Switzerland-based Cardano Foundation, cryptocurrency research company IOHK and FinTech company Emurgo. The main goal of Cardano’s founders is to simply tap into markets where bank systems are too expensive to implement. In turn, Cardano brings a balanced and sustainable ecosystem that takes into account users’ needs and developing financial systems that seek integration.

Cardano is essentially a decentralised public blockchain with an open-source cryptocurrency. Its smart contract platform aims to provide the world’s most advanced protocol features.

Cardano’s smart contract platform uses a programming language called ‘Haskell’ – has a high degree of fault tolerance and built-in flexibility that makes way for a margin of error, maintenance and upgrades through soft forks. In order to enable this flexibility, Cardano constructed in layers.

The Cardano cryptocurrency, ADA, can be used on cryptocurrency exchanges and peer-to-peer marketplaces to trade, buy and sell cryptocurrencies. It can also be used to securely send and receive digital currencies using the ability of fast and direct transfers provided by cryptocurrency wallets. However, Cardano’s Daedalus wallet and Coindirect are “currently the only (software) cryptocurrency wallets that hold Ada and allow transfers to other wallet addresses”, according to Wikipedia.

cryptocurrency wallet

Image: Coindirect

 

How does Cardano work?

The Cardano platform enables the running of decentralised financial applications (DApps) which have daily cryptocurrency use cases for ADA holders, organisations and governments around the world.

Cardano is constructed in 2 layers – the settlement layer (layer 1) which runs ADA and a computation layer (layer 2) which handles the smart contracts. The purpose of these 2 layers is to separate the ledge of account values form the reason why values are moved from one account to the other. Hence, helping the smart contracts to incur more flexibility. In turn, ADA investors will be able to personalise the privacy, design and execution of each contract for their Cardano use-case.

 

  1. Cardano Settlement Layer (CSL)

The Cardano Settlement Layer was developed as an improvement to Bitcoin BTC and acts as the balance ledger. It uses the blockchain’s Ouroboros Proof-of-Stake (PoS) consensus algorithm which determines how individual nodes reach consensus about the network. This allows slot leaders to confirm transactions and generate new blocks.

With the Ouroboros PoS, when the “Follow the Satoshi” algorithm selects a cryptocurrency that you hold, you will be able to become a slot leader and publish new blocks to the network – nodes automate this process for you.

 

  1. Cardano Computation Layer (CCL)

The Cardano Computation Layer includes information on why transactions occur. Here, users are able to create different rules when testing transactions. The CCL also supports the Ethereum smart contract programming language, Solidarity, for low assurance applications.

 

The Cardano team is looking to develop a new language – ‘Plutus’ – to use to build smart contracts on the CCL; as well as tools to verify code and enhance code assurance. A reference library to the Plutus code will also be integrated to use in dApp projects.

Moreover, Cardano aims to support a new protocol known as ‘KMZ sidechains’, which involves the proof-of-work consensus. Integrating KMZ sidechains will essentially allow funds to safely move from CSL to any CCL or blockchain that uses this protocol. Under particular regulatory compliances, the sidechains will also allow ledgers to interact with CSL without having to share private data.

 

Cardano ADA transaction fees

With a total supply of 45,000,000,000 ADA coins, transferring Cardano is a quick and easy process. However, the fees required to transfer ADA differs. The following equation is used to determine the fee for an ADA cryptocurrency transfer:

A + B * size/bytes = Transfer fee

  • A = a constant of 0.155381 ADA
  • B = a constant of 0.000043946 ADA per byte
  • Size/byte = the size of the transaction in bytes


Here, the minimum transaction fee is A and will increase to B with each byte increase of your transaction size. Each epoch’s transaction fee is collected in a pool and distributed among slot leaders. An epoch is a bigger period of time for which we know in advance who will have the right to generate a block in each slot.

 

Where to buy Cardano ADA?

The Coindirect peer-to-peer marketplace and cryptocurrency wallet allow users to buy ADA with ZAR, EUR, NGN, GBP, AUD and many more fiat currencies. Supported in 25 countries, ADA can be bought users’ most convenient local payment method; including bank transfers, PayPal, TransferWise, supported fiat deposits, direct deposits and M-Pesa. Credit card payments are coming soon.

cryptocurrency cardano wallet

Image: Coindirect


How to sell Cardana ADA

ADA can also be sold for BTC or other cryptocurrencies via the Coindirect peer-to-peer marketplace. If you are located in one of our other 24 supported countries, you can instantly sell your Cardano ADA by selecting the best buy offer from vendors in your country or you can set up a sell offer on our peer-to-peer marketplace if it’s one of our major supported currencies.

cardano cryptocurrency wallet

Image: Coindirect


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