What is Cardano?
Cardano is an open-source, permissionless blockchain network based on Proof-of- Stake (PoS) built on the work of over 120 academic papers. The heart and soul of the the project is the Cardano base layer blockchain. More generally, the project aims to build a sustainable, community-governed, decentralised ecosystem anchored by a borderless and trustless settlement layer for peer-to-peer payments and digital contracts. Derivative innovation on top of this ecosystem is anticipated to seamlessly adapt and provide new functionality over time and scale to support global adoption.
Central to Cardano’s mission, the project aims to empower and bring digital and financial identity to the estimated 2 billion to 3 billion people in the world that don’t currently have it, with an initial focus on Africa. Cardano’s lead development arm, IOG, is already working with government organisations in three different countries.
With ambitious goals, Cardano recognizes the necessity for their infrastructure to run correctly the first time it runs. This is in contrast to a “launch now, fix as we go” philosophy employed by many Silicon Valley development teams. Therefore, Cardano fosters a culture based on academic peer-review and formal verification, emphasising security, reliability, and sustainability around their finished product. While these characteristics are intuitively desirable, this approach comes at the cost of slower development rollout.
Founding & Organisation
Cardano was created in 2015 by Charles Hoskinson and Jeremy Wood, both of whom are also considered co-founders of Ethereum. The project’s development is driven through the collaboration of three founding organisations, each of which have their own specific role:
Input Output Global (IOG or IOHK)—a for-profit blockchain research and engineering company founded by Hoskinson and Wood, which leads the research, development, and engineering of the Cardano blockchain.
EMURGO—a for-profit global blockchain solutions provider that focuses on the promotion of Cardano-based commercial applications.
Cardano Foundation—an independent, Swiss-based non-profit which oversees and supervises the development of the Cardano blockchain.
The separation of roles and powers, particularly for-profit from non-profit organisations, is a common approach taken by many blockchain projects and open-source software projects, separating business interests from the development of community-owned, public infrastructure. In particular, the separation between the non-profit Cardano Foundation and the original development team is another demonstration of the project’s commitment to community ownership and governance.
Cardano is considered to be a 3rd-generation blockchain, which are blockchain networks designed to provide smart contract functionality with an emphasis on scalability, interoperability, and sustainability. These blockchains attempt to address commonly held views on the limitations of networks like Bitcoin and Ethereum, which are considered 1stgeneration and 2nd-generation blockchains, respectively.
Scalability—ability of a blockchain to support a growing number of users and devices. With global adoption in mind, for most of these projects that means users in the billions. Common measures of scalability are throughput (i.e. transactions per second or TPS) and latency (i.e. the time it takes for a transaction to be confirmed).
Interoperability—ability of a blockchain to interact with other blockchains and external resources such as APIs, whether that is to share state or information between two platforms or to trigger execution/computation on each other’s platforms.
Sustainability—this comes in two forms: environmental sustainability referring to the protocol’s ability to operate with low energy consumption and protocol/ ecosystem sustainability through the use of on-chain governance and a community treasury or funding resource.
Third-generation blockchains include a family of projects such as Ethereum 2.0, Cardano, Polkadot, and Solana. These projects are often branded in Twitter circles as “Ethereum killers” as they are considered a threat to Ethereum’s reign in the smart contract platform sector. However, efforts to engineer interoperability suggest these projects strive to coexist alongside Ethereum, as well as one another, resulting in a multi-chain, decentralised Web3 ecosystem. Ironically, despite the “Ethereum Killer” label, Cardano is actually far more reminiscent of Bitcoin, particularly with respect to its tokenomics, consensus protocol, and accounting style.
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