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Cardano Ecosystem

Elevenews

10/25/2021

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Is Cardano (ADA) Slowly Becoming a Stable Coin

Someone said:  Why don’t you hand over Cardano’s management to those who really have the courage to burn? Community response:  Alright, let’s have a chat about this. First off, could you please explain your position on why burning tokens...

Is Cardano (ADA) Slowly Becoming a Stable Coin

Today, cryptocurrencies face numerous challenges, including scalability, power consumption and the ability to interact with common money. Cardano calls itself a third-generation blockchain. Your community is working to solve these issues and be better compared to its predecessors like Bitcoin and Ethereum.

Currently, Cardano (ADA) is the fourth largest cryptocurrency by market capitalization.

What is Cardano?

You’ve heard about first and second generation cryptocurrencies, right? Cardano calls itself “the first cryptocurrency of the third generation”. Like Ethereum, Cardano aims to be a platform where people can create autonomous contracts.

Cardano is an open platform that seeks to provide economic identity to the billions who lack it by providing decentralized applications to manage identity, value and governance— Charles Hoskinson (@IOHK_Charles) August 2, 2020

It was created by a team led by Charles Hoskinson, in an attempt to create a “more balanced and sustainable ecosystem” for cryptocurrencies. Originally developed as a research project, Cardano has evolved into a blockchain platform in its own right.

Its creators believe that blockchain standalone contracts such as Ethereum face challenges related to scalability and interoperability, and that these challenges can be better addressed by a new platform, built from scratch.

The main responsible for the creation of Cardano is Charles Hoskinson, one of the co-founders of Ethereum.

A brief overview

In 2015, Cardano started as a research project to explore how cryptocurrencies could be improved.

On September 29, 2017, the Cardano team released the Byron phase to the public, which only provided support for transactions with the ADA token.

In July 2020, the Shelley phase was launched, which improved the network’s decentralization, meaning investors could staking the ADA.

Goguen, the third phase, implemented autonomous contracts through the bifurcation (or “hard fork”) Alonzo and the native issuance of tokens.

The remaining stages are Basho, which focuses on scalability, and Voltaire, which handles blockchain governance.

The name of the stages of Cardano pays homage to English poets. The network has already completed the Byron and Shelley stages and is now in the Goguen stage.

What is so special about Cardano?

The team behind Cardano was inspired by the world of scientific publishing and adopted its peer review approach to its cryptocurrency.

Thus, all changes and new features presented are developed, reviewed and approved by academics before being used, including Ouroboros, the consensus algorithm of the network.

The network code is written in the Haskell programming language, used by companies including Bank of America (BofA) and the telecommunications company American Telephone and Telegraph (AT&T).

Input Output (IOHK), the company behind Cardano’s development, has published numerous academic articles describing the platform and its technology.

But not only that!

Currently, the Ethereum network uses the proof of work (PoW) consensus mechanism to verify transactions, which uses a lot of electricity and can only process a limited number of transactions at a time. Cardano uses proof of stake (PoS), which consumes less energy.

The network uses an algorithm called Ouroboros to choose who creates the next block and to validate blocks (the Ethereum 2.0 update will make Ethereum move to proof of stake soon).

Proponents of the proof of stake algorithm believe that a consensus mechanism focused on staking makes blockchain networks more secure while significantly reducing their power consumption and carbon footprint.

“If we hit proof of stake, the network will be 250 times more decentralized than Bitcoin,” said Charles Hoskinson.

Developer IOHK has already made progress in managing identity and traceability, announcing numerous partnerships.

In 2019, IOHK teamed up with shoe manufacturer New Balance to address sneaker counterfeiting, allowing customers to confirm the authenticity of products using the Cardano blockchain.

In April 2021, the company entered into a partnership with the Ethiopian government to present a digitization solution that will be implemented in schools.

Ultra-fast transaction timings and interoperability with other blockchains are also being developed.

What are Cardano’s other differentials?

Cardano consists of three parts:

1) Cardano Foundation: supports the research and development of the network;

2) IOHK: company that works together with several research and development universities;

3) Emurgo: distinct company that was hired to work on the blockchain and make it more commercially attractive.

How is ADA produced?

ADA, Cardano’s coin, is a tribute to Ada Lovelace, a 19th century mathematician recognized as the first programmer, in addition to being the daughter of the poet Lord Byron.

Cardano’s ADA currency is not mined like Bitcoin. Instead of miners, there are validators, which are chosen by the network based on how much ADA they have.

If they are selected to validate block transactions, they present a bet on how confident they are in verifying all transactions. If the blockchain checks the validator’s block, the validator wins the bet and is rewarded in ADA.

What is Ouroboros?

Ouroboros is the algorithm that defines Cardano, the first blockchain protocol to be based on polls by party review, in addition to the project’s proof of stake solution.

Basically, the consensus protocol supports Cardano’s ability to be a decentralized proof of stake platform. It is used to ensure network security, validate transactions and issue new ADA tokens.

It was created by a team led by Charles Hoskinson, in an attempt to create a “more balanced and sustainable ecosystem” for cryptocurrencies. Originally developed as a research project, Cardano has evolved into a blockchain platform in its own right.

Its creators believe that blockchain standalone contracts such as Ethereum face challenges related to scalability and interoperability, and that these challenges can be better addressed by a new platform, built from scratch.

The main responsible for the creation of Cardano is Charles Hoskinson, one of the co-founders of Ethereum.

A brief overview

In 2015, Cardano started as a research project to explore how cryptocurrencies could be improved.

On September 29, 2017, the Cardano team released the Byron phase to the public, which only provided support for transactions with the ADA token.

In July 2020, the Shelley phase was launched, which improved the network’s decentralization, meaning investors could staking the ADA.

Goguen, the third phase, implemented autonomous contracts through the bifurcation (or “hard fork”) Alonzo and the native issuance of tokens.

The remaining stages are Basho, which focuses on scalability, and Voltaire, which handles blockchain governance.

The name of the stages of Cardano pays homage to English poets. The network has already completed the Byron and Shelley stages and is now in the Goguen stage.

What is so special about Cardano?

The team behind Cardano was inspired by the world of scientific publishing and adopted its peer review approach to its cryptocurrency.

Thus, all changes and new features presented are developed, reviewed and approved by academics before being used, including Ouroboros, the consensus algorithm of the network.

The network code is written in the Haskell programming language, used by companies including Bank of America (BofA) and the telecommunications company American Telephone and Telegraph (AT&T).

Input Output (IOHK), the company behind Cardano’s development, has published numerous academic articles describing the platform and its technology.

But not only that!

Currently, the Ethereum network uses the proof of work (PoW) consensus mechanism to verify transactions, which uses a lot of electricity and can only process a limited number of transactions at a time. Cardano uses proof of stake (PoS), which consumes less energy.

The network uses an algorithm called Ouroboros to choose who creates the next block and to validate blocks (the Ethereum 2.0 update will make Ethereum move to proof of stake soon).

Proponents of the proof of stake algorithm believe that a consensus mechanism focused on staking makes blockchain networks more secure while significantly reducing their power consumption and carbon footprint.

“If we hit proof of stake, the network will be 250 times more decentralized than Bitcoin,” said Charles Hoskinson.

Developer IOHK has already made progress in managing identity and traceability, announcing numerous partnerships.

In 2019, IOHK teamed up with shoe manufacturer New Balance to address sneaker counterfeiting, allowing customers to confirm the authenticity of products using the Cardano blockchain.

In April 2021, the company entered into a partnership with the Ethiopian government to present a digitization solution that will be implemented in schools.

Ultra-fast transaction timings and interoperability with other blockchains are also being developed.

What are Cardano’s other differentials?

Cardano consists of three parts:

1) Cardano Foundation: supports the research and development of the network;

2) IOHK: company that works together with several research and development universities;

3) Emurgo: distinct company that was hired to work on the blockchain and make it more commercially attractive.

How is ADA produced?

ADA, Cardano’s coin, is a tribute to Ada Lovelace, a 19th century mathematician recognized as the first programmer, in addition to being the daughter of the poet Lord Byron.

Cardano’s ADA currency is not mined like Bitcoin. Instead of miners, there are validators, which are chosen by the network based on how much ADA they have.

If they are selected to validate block transactions, they present a bet on how confident they are in verifying all transactions. If the blockchain checks the validator’s block, the validator wins the bet and is rewarded in ADA.

What is Ouroboros?

Ouroboros is the algorithm that defines Cardano, the first blockchain protocol to be based on polls by party review, in addition to the project’s proof of stake solution.

Basically, the consensus protocol supports Cardano’s ability to be a decentralized proof of stake platform. It is used to ensure network security, validate transactions and issue new ADA tokens.

Ouroboros divides transactions into “epochs” which, in turn, are divided into time “slots”. A slot leader is elected to take care of each time slot and is responsible for adding a block to the blockchain. A new slot leader needs to consider the latest blockchain blocks as transient. This is known as “delay of settlements” and is the mechanism by which registration is transferred, in a secure way, between participants.

How to acquire ADA?

Among the top ten cryptocurrencies, you can buy or trade ADAs at the top crypto brokers, including Coinbase, Binance, Kraken and eToro.

What is ADA for?

Although you can buy and trade ADA just like any other cryptocurrency, and used to pay transactions on the Cardano blockchain, it is not considered a currency, just like bitcoin, which can be used to purchase goods and services.

On the Cardano platform, users need to purchase ADA to make transactions, participate in governance, become a slot leader and get a share of fees paid for transactions.

“[Cardano] does everything we wanted to do using cryptocurrencies, which is to create an operational financial system for people who don’t have access to one — one that can really compete with the global financial system,” explained Hoskinson.

In July 2020, the Shelley update enabled delegate staking. For the first time, ADA holders could pool their coins with other users to earn interest on the cryptocurrency.

The Alonzo Bifurcation

In September 2021, the main Alonzo network was launched, integrating standalone contracts with Cardano.

The launch allows Cardano to be on the same level as other blockchains that use autonomous contracts, such as Ethereum, which has been using autonomous contracts since 2015. Hoskinson, the founder of Cardano, said that Alonzo would usher in “a new era of Cardano”.

However, the launch of the Alonzo fork did not go smoothly.

The first decentralized application (dapp) launched on the platform, a multipool brokerage called Minswap, was forced to suspend its activities shortly after its launch, as it had problems processing multiple transactions at once.

IOHK denied accusations that dapp had problems performing simultaneous transaction processing, describing these criticisms as “total FUD [‘medo, incerteza e dúvida’] and misinformation”.

IMPORTANT THREAD: Over the past 24 hours we have seen a lot of social media speculation (and let's face it, outright FUD & misinformation) over Cardano’s ledger approach and specifically ‘concurrency’. Let’s clear this up. #Cardano $ADA 1/n— Input Output (@InputOutputHK) September 5, 2021

In one publication, IOHK argued that Cardano’s stand-alone contract design is a feature rather than a flaw, resulting in improved security and a reduced possibility of unexpected fees and concurrency issues such as those faced by Minswap, can be avoided.

The future of Cardano

Issuing ADA consumes a fraction of the energy needed to produce bitcoins. As such, Cardano is one of a number of proof-of-stake cryptocurrencies to benefit from a new emphasis on more sustainable crypto references after Elon Musk, CEO of Tesla, debated the issue.

In May 2021, shortly after Musk’s announcement that Tesla would no longer accept bitcoin as a means of payment, “sustainable” cryptocurrencies, including Cardano, soared to new record highs.

In July, digital asset manager Grayscale added ADA to its fund with the largest capitalization cryptocurrencies (GDLC).

In September, a report published by VC Outlier Ventures revealed that Cardano is barely behind Ethereum in terms of monthly active developers, as Cardano dominated most monthly contributions on GitHub between July 2020 and June 2021.

At the recent Cardano Summit virtual conference, Hoskinson debated Cardano’s future to an audience of digital avatars, announcing a dapp store for the network, as well as a mobile wallet and integration with Chainlink.

Despite the problems facing Alonzo, if Cardano proves that its rigorous approach to cryptocurrencies can draw big companies into the blockchain world, the network could be at the forefront of a crypto revolution in the coming years.

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