What do you mean by Cardano?
Token Thursday: Episode 4
Welcome to Token Thursday! A weekly breakdown of the most popular cryptocurrencies in the blockchain world. This week we tackle one of the most popular DeFi coins: Cardano also known as ADA.
What is Cardano aka ADA?
ADA is the native cryptocurrency that runs on the Cardano blockchain, a first-of-its-kind decentralised network, based completely on scientific and mathematical principles, and designed by expert cryptographers and engineers with a peer-to-peer review system. It is also interesting to note that Cardano was created by American entrepreneur Charles Hoskinson, who in fact was also a co-founder of Ethereum.
It is often said by Cardano and the crypto community that ADA is the first 3rd generation cryptocurrency. Similar to Ethereum, the Cardano blockchain can be used to build smart contracts, and in turn, create decentralised applications and protocols. But the key difference here is that Cardano aims to solve the various pain points Ethereum faces in terms of scalability, interoperability & sustainability.
How does it work?
A few weeks ago we spoke about 2 fundamental blockchain models Proof of Work & Proof of Stake. Cardano as a blockchain operates on the PoS model, which makes it consume less power, more decentralised & scalable. It uses a specially designed consensus protocol called Ouroboros to secure & validate ADA. More on Ouroboros below.
- Like other cryptocurrencies, ADA can also be bought & traded on different centralised & decentralised exchanges.
- It can be used to pay transactions incurred on the Cardano network.
- ADA token holders can also participate in governance & voting powers within its blockchain.
- Additionally, ADA holders can delegate their currency to stake pools that vote to select a stake leader for block creation. In return, those who stake their ADA are rewarded.
Can you mine ADA?
Unlike Bitcoin, ADA cannot be mined. Since it works on the PoS system, validates validate each block of ADA in return for being rewarded in ADA! In this system validators, are chosen by the network depending on how much ADA currency they currently own.
Ouroboros is Cardano’s defining algorithm, the first blockchain protocol to be based on peer-reviewed research, and an integral element of proof-of-stake. It is a consensus protocol that allows ADA to be sent and received easily and securely at all times, while also ensuring the safety of smart contracts on the Cardano blockchain. At the same time, as a PoS consensus mechanism, Ouroboros provides rewards to token holders who stake their ADA to the network and help ensure network consensus.
It works on the following process:
- The protocol divides transactions into epochs (a specific period of time in the blockchain), which are subdivided into time slots.
- A slot leader is elected for each time slot and is responsible for adding a block to the chain.
- Slot leaders along with any other participants who complete their process receive a reward for their services in the form of ADA.
Where to buy ADA?
As a top 10 cryptocurrency, ADA is available on many exchanges. If you are looking to trade ADA with a fully insured wallet, simply head on over to DIFX and log in or create a new account to start trading!
DIFX is a CEX that uses blockchain technology to incorporate centralized finance. It is an easy-to-use platform for both new and experienced traders, establishments, and investors. DIFX allows users to nominate anyone from their family, friends, or loved ones and allows them to legitimize their claim upon the primary user’s demise.
Additionally, the company hopes to increase the use of digital currencies for direct settlement between beneficiary and payer by eliminating intermediaries. To begin your journey with Endless Possibilities, download the app now from the iOS or Google Play Store, or visit us at difx.com.