Blockchain is justified to be a remarkably functional technology in industries starting from finance to art. The fundamental structure of decentralized blockchains, however, comes with a set of unique challenges. Achieving a watertight secure network over a vast decentralized network all while managing internet-scale transactional output being one of the biggest challenges, to start with.
Charles Hoskinson, the co-founder of Ethereum, saw these challenges beforehand and started developing the Cardano blockchain and its native currency ADA. But, what is Cardano? What is ADA cryptocurrency and how to buy it? Let’s take a look at it.
What is Cardano?
Hoskinson launched Cardano in 2017. It is one of the finest decentralized proof-of-stake (PoS) blockchain platforms in the world, Cardano, was designed to top proof-of-work (PoW) networks. As a third-generation blockchain network, Cardano Blockchain offers scalability, interoperability, and sustainability that PoW networks such as Ethereum and Bitcoin are less known for. These monolithic networks—though a great foundation to today’s more innovative blockchains—are severely limited by their energy use, growing costs of infrastructure, and slow transaction times.
Connecting your Cardano 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?
The Cardano platform operates on the Ouroboros consensus mechanism. Developed in Cardano’s foundational phase, Ouroboros is the pioneer of the PoS protocol that was not only secure but also based on academic research. Ouroboros is a blend of mathematically-verified mechanisms and unique technology to ensure top-notch security and sustainability of the blockchain network. Each development phase in the Cardano roadmap is based on research, peer-reviewed insights, and methods based on evidence to achieve the holy grail in the blockchain tech and ADA token.
Even though Cardano is a blockchain network, it takes a different approach and follows a slightly different model. Its network has two layers: a settlement layer and a computational layer. The settlement layer is ready and functional and allows the users to exchange ADA tokens from their wallets. The computational layer is in the development phase and its objective is to effortlessly get the users to initiate a d sign up on smart contracts. While it may sound like the Ethereum blockchain, it has fundamental differences.
To begin with, Cardano is more flexible as it can be modified as per the requirements of the end-users. Let’s understand with an example; various countries have a multitude of financial and monetary regulations. With Cardano, the information on the same contract can be processed, stored, and accessed as per those regulations. And given that this layer is independent of the settlement layer, ADA users use the tokens and still comply with those laws and regulations.
As both the layers are separate, the Cardano project team can make changes to the computational layer without disrupting the ADA or the settlement layer. It uses proof-of-stake protocol to verify transactions. Users who want to stake their coins must have a certain amount of tokens to demonstrate they have a stake in the whole process and they earn rewards depending on their stake. The result is a network with proven security and minimal energy requirements.
What is ADA Cryptocurrency?
As we mentioned earlier, ADA is the native cryptocurrency of the Cardano network. It was named after ADA Lovelace, often referred to as the world’s first computer programmer. ADA is staked by users also known as validators who help maintain the security and stability of the network. They pay a transaction fee with ADA and after staking, they earn rewards in the same token. Shortly, ADA will become the governance token and help in voting changes and upgrades to the 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.