The advent of blockchain technology has proven to be incredibly functional across various industries, ranging from finance to art. However, the decentralized nature of blockchain presents its own set of unique challenges. One such challenge is establishing a secure and robust network across a vast decentralized infrastructure while effectively managing internet-scale transactions.
Recognizing these challenges, visionaries like Charles Hoskinson, co-founder of Ethereum, embarked on developing the Cardano blockchain and its native cryptocurrency ADA. Now, let’s explore what Cardano is, understand the role of ADA cryptocurrency, and discover how one can acquire it.
What is Cardano?
In 2017, Hoskinson introduced Cardano, a distinguished decentralized proof-of-stake (PoS) blockchain platform that surpasses traditional proof-of-work (PoW) networks. As a third-generation blockchain, Cardano offers remarkable scalability, interoperability, and sustainability, which sets it apart from PoW networks like Ethereum and Bitcoin. While these legacy networks laid the foundation for today’s innovative blockchains, they face limitations in terms of energy consumption, infrastructure costs, and transaction speed. Cardano strives to overcome these limitations and usher in a new era of efficiency and advancement in the blockchain space.
Connecting your Cardano (ADA) Address to ZenLedger For Your Crypto Tax Forms
• To import your Cardano transactions into ZenLedger for your crypto tax forms, all we need is your public address.
• Select the proper blockchain or wallet from the dropdown list.
• Paste your address into the address field in ZenLedger.
• Select if the wallet is based in the USA or not.
• Then hit ADD COIN button
Now that we have the basics of what is Cardano out of the way, let’s advance to the workings of the Cardano blockchain.
How Does Cardano Blockchain Work?
At the heart of the Cardano platform lies the Ouroboros consensus mechanism, which was developed during its foundational phase. Ouroboros pioneered the secure proof-of-stake (PoS) protocol based on rigorous academic research. By blending mathematically-verified mechanisms and unique technology, Ouroboros ensures the utmost security and sustainability of the Cardano blockchain network. Each phase of Cardano’s roadmap is driven by research, peer-reviewed insights, and evidence-based methods, striving to achieve excellence in blockchain technology and the ADA token.
Cardano adopts a distinct approach with a two-layered network: the settlement layer and the computational layer. The settlement layer is fully functional, enabling users to exchange ADA tokens from their wallets. On the other hand, the computational layer is currently in development, aiming to seamlessly facilitate the execution of smart contracts. While there may be similarities to the Ethereum blockchain, Cardano differentiates itself in fundamental ways.
One key advantage of Cardano is its flexibility, allowing for customization to meet the specific requirements of end-users. For instance, financial and monetary regulations can be accommodated within the Cardano framework. This means that information stored and accessed on the network can comply with diverse regulatory frameworks while maintaining independence from the settlement layer. ADA users can utilize their tokens while adhering to applicable laws and regulations.
With the separation of the two layers, the Cardano project team can make changes to the computational layer without disrupting ADA or the settlement layer. The network employs a proof-of-stake protocol to verify transactions. Users who stake their coins demonstrate their stake in the network and earn rewards based on their participation. The result is a secure network with minimal energy requirements, offering a robust foundation for the Cardano ecosystem.
What is ADA Cryptocurrency?
As we mentioned earlier, ADA Cardano is the native cryptocurrency of the Cardano network, named after the visionary mathematician and programmer, ADA Lovelace. Beyond being a means of value transfer, ADA plays a pivotal role in the Cardano ecosystem. ADA holders, known as validators, actively participate in securing and maintaining the network by staking their tokens. By staking ADA, validators contribute to the consensus mechanism and are rewarded with additional ADA tokens for their efforts.
In addition to the monetary benefits, the future of ADA holds even more significance. As Cardano progresses, ADA will assume the role of a governance token. This means that ADA holders will have the opportunity to actively participate in decision-making processes regarding protocol changes, upgrades, and the overall direction of the Cardano network. Through voting, ADA holders can help shape the future of Cardano, fostering a decentralized and community-driven ecosystem.
By combining its monetary utility, staking rewards, and forthcoming governance capabilities, ADA Cardano emerges as a versatile and dynamic cryptocurrency. It not only provides a secure and efficient medium of exchange but also empowers ADA holders to actively engage in the governance and evolution of the Cardano network.
How to Buy Cardano (ADA)
- Open an Account: Considering Cardano is one of the leading cryptocurrencies, it is offered by many large crypto exchanges and trading platforms such as eToro, Coinbase, Kraken, and more. Open an account in one of these exchanges to get started.
- Buy a wallet (optional): If you are investing in Cardano, then you should protect it by storing it in a wallet managed by a private key. If you leave the tokens in the exchange, they have custody of your funds. For trading, it is a convenient option, but if the exchange is hacked, you might lose your tokens. You can buy a cold storage wallet which means that your private key will be untouched by the internet and can’t be stolen.
- Make Your Purchase: After choosing a crypto exchange or a trading platform and having a secure place to store your tokens, deposit sufficient funds on your exchange. With these funds, make your purchase of ADA tokens.
To Sum It Up
If one wonders, what is Cardano known for? Decentralization, security, and scalability will be the top three answers. Compared to other networks, Cardano Blockchain is among the most adaptable. No single central entity has an unreasonable amount of control over the transaction validation process and security. Lastly, it offers financial freedom to its users.