When the Cardano cryptocurrency appeared on the market in the fall of 2017, it quickly managed to gain a 65-fold increase in value, acquire a top 10 spot among the cryptocurrencies and earn the title of the Japanese Ethereum — all this in just three weeks after its inception.
Our review is gonna cover questions such as who invented and promoted the Cardano cryptocurrency, as well as how different it is to other cryptocurrencies.
The idea of Cardano cryptocurrency belongs to Charles Hoskins, who was one of the early founders of Ethereum, but then he left it for his own project. Charles wanted to create a better and more secure platform than Ethereum. And so he actually invited scientists from the world's leading universities, namely from Connecticut, Athens, and Edinburgh. Whatever. Now they proudly state that Cardano is built upon scientific philosophy.
The Cardano ICO was held in 2015 and ended only in 2017. During this time, 58% of the tokens were sold. They are called ADA. Overall, $63M were raised. Interestingly, 95% of all Cardano investors live in Japan. That’s why the cryptocurrency got its Japanese Ethereum nickname. A total of 45B tokens were issued, and besides distributing them to the investors, 11% and 31% went to the developers and mining rewards respectively.
In October 2017, Cardano was officially presented to the general public. It also got listed in the cryptocurrency ratings. In early January 2018, it reached its peak value and had a capitalization of almost $30B. But since then, Cardano has fallen in price by 14x and today, its capitalization is slightly more than $2B. Nevertheless, the project is still being developed according to the roadmap: the blockchain has already been launched and its own crypto wallet has been developed, while the smart contracts are still being tested.
The Cardano developers have made their bets on the technological capabilities. They even market the cryptocurrency as a third-generation Blockchain. The core technologies are the sublayer network division and the unique consensus algorithm.
The sublayer blockchain implies the separation of ADA token transactions from the smart contracts. The first layer processes user transactions, while the second layer is responsible for maintaining smart contracts. This is done so that the layer issues don’t cross-contaminate each other in case of errors. Simply put, a bug in a smart contract will not cause users to lose their cryptocurrency, unlike in other blockchains. Yes, I am looking at you, Ethereum.
Mining Cardano is carried out by the Ouroboros algorithm which is similar to Proof-of-Stake. The blockchain life cycle is divided into many epochs (yeah, they seriously went on with calling it like that), each of epoch lasts a certain time like 20 minutes or something. At the beginning of a new epoch, the system picks miners who will process transactions.
The odds of being chosen as a block validator depend solely on the amount of cryptocurrency held in a wallet. Users can join into a group and act as a single validator. Once the blockchain epoch is finished, a new one takes its place, choosing new miners again.
This mining algorithm is very similar to the delegated Proof-of-Stake that’s used in EOS and TRON. However, this one is more resistant to network centralization due to constant and forced validator voting.
It is not exactly clear what the Cardano creators meant by the “scientific philosophy” expression, but it is worth noting the professionalism of their development team. Few projects can boast that their workers are specialists with a high-degree education. This is evident in how the white paper was written and how the team reports on the current stages of development.
If we talk about the team as a whole, they’ve managed to split the development process between three organizations:
- IOHK was established by Charles Hoskinson. It is responsible for the blockchain development and improvement.
- Cardano Foundation is the management company that oversees developers, legislation procedures and PR.
- Emurgo is an investment company that aids startups that use the Cardano blockchain.
And the last important feature is that despite the 3-year progress and a spot in the top 10 cryptocurrencies, Cardano is still a very young project. User capabilities are limited to sending transactions, and smart contracts are only available in the test network.
Cardano went viral in the winter of 2017 and fully met the expectations of the ICO investors. While they are still delighted with the profits, the current ADA token owners are not so happy with their chances.
If you look at the cryptocurrencies such as EOS and TRON, the release of their blockchains contributed only to a moderate increase in capitalization. So don’t expect any trips to the moon with Cardano. Especially when you count in the fact that smart-contract market is getting crowded. Cardano cannot even handle the competition while still being in the development phase.