The Power of Cardano (ADA): A Third Generation Blockchain

Cardano Blockchain

The Blockchain technology has clearly proven its capabilities to solve numerous of the problems the world is facing today. It is unarguably, a revolutionary technology. It has already revolutionized several industries, especially the finance and economics sectors through cryptocurrencies. It's capabilities is far more than these and I am excited to see emerging blockchain solutions that focuses more on other industries like real estate, healthcare, supply chain management and more.

If you still have no idea what the blockchain is, it is an open ledger or record keeping system in simple terms. This system records transactions on a network of computers called nodes. Currently it is broadly being applied in the Finance sector through digital currencies known as cryptocurrencies. Some of the earlier cryptocurrency blockchains include Bitcoin, Ethereum, Litecoin. Because it is widely being associated with cryptocurrencies, many limit the technology to only one aspect but in real facts, it has the potential to transform industries like, supply chain management, real estate, healthcare, global economics, politics and even voting systems. Bitcoin happens to be the first blockchain network, it is mainly focused on cryptocurrencies, and it introduced the world to the concept of digital currencies and blockchain.

As people start exploring more into the wonderful technology through the first-generation blockchain, they realized some limitations and this has brought forth to the development of second-generation blockchains like Ethereum, NEO, BAT, to extend the use cases of the blockchain technology. These second-generation networks introduce the concept of smart contracts and decentralized applications (DApps) to the blockchain ecosystem.

Now, we have third-generation blockchains like Cardano that aim to address the scalability, interoperability, and sustainability issues of previous generations. The Cardano network uses a proof-of-stake (PoS) consensus algorithm called Ouroboros in validating the network's transactions. This algorithm is energy efficient which the first and second generation blockchains are not able to achieve.


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Cardano is a third generation blockchain that was developed with the goal of solving some of the challenges faced by earlier blockchains. This network was implemented by a team of experts and researchers based on scientific approach. Their core goal was to make it a truly decentralized and scalable blockchain that is more capable to support a wide range of applications. $ADA is the native cryptocurrency of Cardano blockchain. based on data from coinmarketcap, It's price as at the time of writing this was $0.3802, with a market capitalization of $13.277 Billion, and circulation supply of 34.894 billion $ADA. Its Maximum supply is 45 billion ADA. It is ranked 7th among all cryptocurrencies in terms of market Cap.

A key feature of Cardano is it's a proof-of-stake consensus algorithm. It is opening a way for more scalable and energy efficient transactions. This makes it possible for Cardano to process more transactions per second and handle higher volumes of traffic without sacrificing security or decentralization.


What makes Cardano unique?


There are a lot of things that make Cardano unique from the previous blockchain networks. The drawbacks of Bitcoin, Ethereum and the other second-generation networks were taking into consideration in the building process of Cardano.

Cardano approach to scalability sets it high above the other blockchain networks in terms of transaction. The previous networks struggled with the issue of scalability. Cardano network is built to be able to scale seamlessly as the network grows. With this approach, businesses and individuals who want to build decentralized applications can make it their ideal choice because it can handle a large volume of transactions.

Another advantage of Cardano is its interoperability, which allows it to communicate with other blockchain platforms. This feature is essential for the growth of the blockchain industry as it facilitates the creation of a network of interconnected blockchain platforms that can share information and resources.

Sustainability is another area where Cardano shines. We have been observing the criticisms of the bitcoin mining effect on climate change. We, Cardano like I indicated earlier on is built to be energy efficient. Bitcoin that consumes a significant amount of energy, Cardano is built to reduce the energy consumption required for transactions in a secured and efficient manner.

When compared to Bitcoin, Cardano has several advantages. While Bitcoin is primarily used as a store of value, Cardano is designed for smart contracts and decentralized applications. Cardano's approach to scalability, interoperability, and sustainability also makes it a more practical choice for businesses and individuals who want to build on the blockchain. Just like Bitcoin, Ethereum struggles with scalability issues, it has higher transaction fees and slower transactions. The Cardano network takes all these into consideration making way for faster and cheaper transactions


The Cardano Ecosystem


The network is being driven by a vibrant team. It has a very strong ecosystem behind it. The ecosystem has several components and each one of them have the roles they play towards the growth and adoption of the network. Let's explore the various components of the Cardano ecosystem. We will look at three of them, thus; The Cardano Foundation, IOHK, and EMURGO.

The first one to look at is, The Cardano Foundation, it is based in Swiss, and it operates as a non-profit organization. The foundation was established with a core responsibility of overseeing the development and adoption of the Cardano platform. Their main role is to promote the use of the platform, support the Cardano community, and ensure that the platform is compliant with legal and regulatory requirements. The foundation also manages the Cardano trademark, which is an essential aspect of the platform's branding and identity.

For IOHK (Input Output Hong Kong), It is a blockchain research and development company that was founded in 2015 by Charles Hoskinson, one of the co-founders of Ethereum. IOHK is responsible for the technical development of the Cardano platform, including the implementation of the Ouroboros proof-of-stake consensus algorithm. The company also conducts research on topics such as cryptography, game theory, and economics to improve the efficiency and scalability of the Cardano platform.

EMURGO is a blockchain venture builder that was established in 2017 to promote the adoption of the Cardano platform. EMURGO provides funding, technical expertise, and strategic partnerships to startups and enterprises that want to build on the Cardano blockchain. As a blockchain venture, they also develop their own decentralized applications (dApps) and offers consulting services to businesses that want to integrate blockchain technology into their operations.

Each component of the Cardano ecosystem plays a critical role in building and maintaining the platform. The Cardano Foundation is responsible for promoting the use of the platform and ensuring that it complies with legal and regulatory requirements. The responsibility of IOHK is for the technical development of the platform, which include, the implementation of the proof-of-stake consensus algorithm. EMURGO is responsible for promoting the adoption of the platform and providing funding and technical expertise to startups and enterprises that want to build on the Cardano blockchain.


Real-world applications of Cardano


As I indicated earlier, Cardano was built as a blockchain network that solves a lot of real-world problems beyond just cryptocurrencies. Let's look at some of the applications of the Cardano blockchain network.

One of the most notable projects built on Cardano is the Atala PRISM identity solution, which is being used by the Ethiopian government to create a secure and transparent digital identity system for its citizens. This project will help people without government-issued ID cards have access to basic services in the country. Atala PRISM uses Cardano's blockchain to store identity information in a secure and decentralized manner, making it virtually impossible for bad actors to tamper with the data. More about this project here.

Another successful project built on Cardano is the NFT platform, rarety.io. It allows creators to mint and sell non-fungible tokens (NFTs) on Cardano's blockchain. Several high-profile artists are currently using it to sell their work. Cardano's low transaction fees, make it ideal for creators who want to sell their work without having to pay exorbitant fees to middlemen. More about this project here

Cardano is being also used to create decentralized finance (DeFi) platforms, gaming ecosystems, and supply chain solutions. You can see that; the network is versatile in terms of real-life applications. It opens a way for developers to build diverse forms of applications to solve specific issues whilst still maintaining a level of scalability and security.


The Cardano's Roadmap and Future


Cardano has a very concise roadmap which guidelines on their future updates. On this roadmap they ruled out 5 major updates that they are working on to achieve their core goals. These major updates are organized in 5 eras which include: Byron, Shelley, Goguen, Basho, and Voltaire. Each era of these updates will enhance Cardano's capabilities and expand its use cases. As at the time of this article in June 2023, the first three has been achieved and they are currently working on Basho, this means, we are in the Basho era. You can track and monitor the network's updates through their development updates page

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Let's look at these eras and what they have achieved and yet to achieve.

Byron and Shelley were the first two era's. They represented the network's foundation and decentralization respectively. They were achieved during the early years of the network.

Goguen was the third update that Cardano plans to release. This was the era they added smart contract functionality to Cardano blockchain. Developers can now build applications (dApps) on the network. It has made the network more attractive to developers build their dApps.

Basho is the fourth update in the roadmap. It focuses on improving Cardano's scalability and interoperability. This is the current state of the Cardano's development in 2023. It will enable Cardano to handle more transactions per second, making it more attractive to businesses and organizations. Furthermore, Basho will improve Cardano's interoperability with other blockchains, allowing for more seamless integration with other decentralized applications.

Voltaire is the final update on the roadmap. It will focus on governance and sustainability. This update will introduce a treasury system that will allow Cardano stakeholders to vote on proposals for the platform's development. This will ensure that Cardano's development is community-driven and sustainable in the long run.

In this blog, I have explored into the Cardano blockchain by introducing the network and its unique features. I further had an overview of the ecosystem and its components which the Cardano Foundation, IOHK, and EMURGO. We have seen how these components collectively work towards the network's development and adoption. Another aspect that I discussed was the real-life applications and roadmap of Cardano. All these proves the power of the network and its capabilities of extending the use cases of the blockchain technology. It has cheaper and scalable transactions and it also works as an energy efficient blockchain. These does not mean the network has no challenges. In fact, it still has some drawbacks notably is its decentralization aspect which is likely to improve after the Voltaire era which focuses more on governance. The capability of Cardano makes it attractive platform for developers, businesses, and organizations. The future of the blockchain exciting with all these developments. I hope to see mass adoption of this wonder technology in the near future.

Glossary: Leoglossary

Consulted sources and Further Readings:

Cardano Roadmap
Cardano Projects
Cardano development updates
2023 Cardano Developments


I hope you found this useful. I am Abdul-Salam Issahaku, from Ghana. I am a student web developer and a blockchain enthusiast. I blog about technology, life and investments. You can follow me to be part of my Hive family. Thank you for your time.


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