What is Cardano?

Cardano (ADA) is the first peer-reviewed blockchain platform built to allow people to send and receive
digital money. The Cardano blockchain has a cryptocurrency known as ADA coin. Due to the hierarchical
structure of Cardano, it can be used as a medium of exchange and as well as to generate smart contracts.
History of Cardano
The company that started the development of the Cardano project is called Input-Output Hong Kong
(IOHK), and it is managed by the co-founder of Ethereum called Charles Hoskinson.
The parent company, IOHK, along with a Japanese company Emurgo, began developing Cardano in
2015, and its first layer, Byron was released in 2017, which is the layer for the ADA coin.
The idea behind the Cardano project was to create a blockchain that can perform much better than older
blockchains like Ethereum, with a view to enhancing the processing of more transactions thereby making
transactions cheaper and faster.
How Cardano Works
The Cardano platform consists of two layers - the Cardano Settlement Layer (CSL) & the Control Layer.
The Cardano Settlement Layer (CSL) is used to settle transactions that use ADA, Cardano’s
cryptocurrency, while the Control Layer will be used for smart contracts.
Unlike Bitcoin which uses a consensus model called “Proof-of-Work” to authenticate a transaction, which
involves miners using their computing power to solve a difficult puzzle. The Cardano network
authenticates transactions using a consensus mechanism called Proof-of-Stake.
Validators, as they are called, are people who freeze some of their ADA coins, which is called the “Stake”
to help verify a transaction. Validators earn additional ADA cryptocurrency on their “Stake” as a reward
for helping to authenticate transactions.
The “Proof-of-Stake” system is far more efficient and sustainable than Proof-of-Work as it requires much
less electricity, thereby keeping transaction fees low.
Adoption of Cardano
The Cardano project is still ongoing and it is still a long way from being completed, however, it is
pertinent to note that the platform has aspirations to be interoperable with the mainstream finance
ecosystem and the ADA coin is quite active across many cryptocurrency exchanges.
Currently, the storage of ADA can only be done on its official wallet, Daedalus. The wallet is expected to
soon add other cryptocurrencies for storage, and facilitate exchange between ADA and other
cryptocurrencies.