Cardano Blockchain: The Ouroboros Protocol
Bitcoin and Ethereum are remaking the field of finance. These duos are inefficient when compared to other Blockchains for some reasons. Large energy consumption, slow transaction rate, high transaction fees, and decentralization issues are the cause of their inefficiency. Despite starting the Blockchain world, they lag in scalability, transparency, and sustainability. Cardano Blockchain is a system that posses to be a better model than these two crypto giants.
Cardano Blockchain is a sustainable and open-source cryptocurrency platform powered by its In-house Token ADA. It was built as a third-generation Blockchain platform comprising a two layer system. Its Ouroboros Protocol was the first tested and secure proof-of-stake Blockchain by scholarly researchers. Other Blockchains claim to randomize their block validator selection with no evidence of randomization. However, Cardano's Ouroboros has mathematical proof of its randomization. Cardano Blockchain is a rare gem that is still undergoing polishing.
A Brief History Of Cardano Blockchain
Ethereum's co-founder, Charles Hoskinson, was the one who described a proof-of-stake platform in 2015. He left Ethereum after having a dispute with one of its founders, Vitalik Buterin. This argument was based on the fact that Charles wanted to introduce venture capital to the Blockchain, and create a for-profit entity for the Ethereum development process. The latter refused, and wanted the platform to remain as a nonprofit organization. Charles' ideas held no water because the community had already accepted Vitalik's Ideologies. After leaving Ethereum he co-founded IOHK, Cardano Foundation, and EMURGO to develop Cardano Blockchain.
Although Cardano Blockchain doesn't have a Whitepaper. It rather make use of design principles intended to overcome issues faced by other Cryptocurrencies, such as scalability, interoperability, and regulatory compliance. It was founded through an Initial Coin Offering in 2015 and was launched in 2017 alongside its native token ADA. It has similar application as Ethereum, in terms of smart contracts and decentralization. Cardano Blockchain was named after the Italian Mathematician Gerolamo Cardano.
Even though there are alot of POS Blockchains in the crypto market today, Cardano is different because it seeks to be the first scientifically peer-reveiwed blockchain. Its features and how they differ from other are something to discuss.
The Ouroboros Protocol
Ouroboros is a proof-of-stake cryptocurrency platform, it can run permissionless and permissioned Blockchains. Hoskinson described it as energy efficient when he compared its annual energy consumption of 6 GWh to Bitcoin's 110.53 TWh, as estimated by the University of Cambridge. Ouroboros is an algorithm that uses proof-of-stake protocols to mine blocks, thus eliminating the need for hash power and mass computing resources.
This protocol divides time into epochs (5days) and slots (1s.). Slots are similar to working shifts in a factory. Epochs are relatively similar to such too. Slot leaders are nodes who create blocks and validate transactions throughout a slot. They are chosen via a lottery system where the high your ADA Holding, the more your chances to be chosen.
Staking is the process where ADA holders add their tokens to a staking pool to get rewards for being a slot leader. Since mining is a 24/7 job, the staking pools act as nodes and share the rewards among their stakes in proportion to their staked ADA.
Two Layer System
Cardano was created as a system that separates the value of transactions from it's computational data. Cardano Blockchain, therefore, comprises two layers.
The Cardano settlement layer (CSL) is a layer similar to that of Bitcoin and keeps track of transactions. It's tasked with the movement of value from sender to receiver.
The Cardano computational layer (CCL) is a layer that shares traits with Ethereum in terms of smart contracts execution and creation. It is responsible for implementation of codes that enables smart contracts, and applications, and govern the network.
The Three Partnering Bodies
Cardano has a particular goal and model that its community wants to attain. Three bodies regulate and work to achieve these features. These bodies are:
- IOHK: This is a Blockchain engineering and technology company that is tasked with the building of Cardano. It is very keen on research and has partnered with many scholarly research institutions. This is not just to improve its educational arm but also to improve the long-term scalability of the Cardano protocol by using the most recent peer-reveiwed scientific research to inform platform updates before implementation.
- EMURGO: This is the global technology partner responsible for driving the commercial adoption of the Cardano protocol, and integrating business across a wide range of sectors into their Blockchain system.
- Cardano Foundation: This is the body responsible for advancing the visibility of the Blockchain to the global economy, creating use-cases, and interacting with policymakers, regulators, and academia.
The Cardano Eras
Cardano's development is divided into phases called Eras. This helps the community to focus on the implementation of the main goal of that Era. They are five in number and they are named after reputed Mathematicians.
- Bryon Era - This stage involves Blockchain Architecture foundation and functionality tests. It is the development stage of blockchain infrastructure such as wallets, and the ADA token.
- Shelley Era - This stage is where Cardano Mainnet was launched, the Blockchain network was Decentralized. This stage enabled mining, staking, and node decentralization.
- Goguen Era - This stage gave birth to smart contract platforms implementation and the building of decentralized applications on the Blockchain. This Era will see the introduction of Plutus smart contract language and platform, Marlowe domain-specific language, and the support of a multi-currency ledger that will enable the creation of natively supported fungible and non-fungible tokens.
- Basho Era - This stage is for scaling, optimization, and performance improvement of the Blockchain.
- Voltaire Era - This stage is when the ecosystem votes for its actions and the Blockchain is managed by its users. There is also the presence of a treasury for future expenditure.
The ADA Token
ADA is the native token of the Cardano Blockchain, it is used for transfer of value, voting, staking and transaction fee. It was named after a 19th-century Mathematician known as Ada Lovelace, who was recognized as the first computer programmer. ADA's subunit is Lovelace, 1 ADA = 1,000,000 Lovelaces. It debuted the market with a Market Cap of $600Mn and has a maximum supply of 45Bn ADA. Its Market Cap hit an all-time high of $77Bn in May 2021. It has an average fee of 0.1 ADA and processes 250+ Transactions per second (TPS).
Benefits Of Cardano Blockchain
The Cardano Blockchain has had a lot of achievements over the years, but it has continued to identify itself with education and research for the betterment of its model.
Some of its use cases are seen in its integration with the ministries of Education in Georgia and Ethiopia in 2019 and 2021 respectively. The New Balance footwear has also integrated Cardano's technology to authenticate its products. All of these results in its all-time high of $2 per ADA in 2021. Some of its outstanding features in the Crypto sector are:
Rapid Transaction Processes - Cardano's standards is high in terms of scalability. It is faster than most large Blockchains. Currently, it carries out 250+ TPS.
High Degree Decentralization - Cardano's decentralization enables an ADA holder to validate transactions and review new blocks on the ledger. It allows normal users to be nodes, due to the robustness of the Ouroboros Protocol.
Environmental Friendly Mining - With the use of Ouroboros Protocol proof-of-stake mining algorithms, the energy consumed is insignificant compared to other Blockchains. It can be classified as a carbon-neutral Blockchain.
Cheaper Gas Fees - Cardano gas fees are less expensive in comparison to Bitcoin and Ethereum. The average gas fee is 0.1 ADA which is less than a cent.
Passive Income - Staking your ADA in a pool gives you some passive income. You need a wallet like Yoroi to purchase and lock the Token in a pool.
Constraints Of Cardano Blockchain
Cardano, even after having so much potential, still has major constraints. Technically it's a work in progress. This tends to affect its competition with other complete model. In an attempt to evaluate the market caps of top Cryptos and Cardano, investors and developers tend to prefer the others because of their price achievements even though Cardano is a more perfect model. Generally, Cardano issues are inherent in thier underdevelopment, finances, and public sentiments. We expect that the journey through its roadmap will bring an end to these issues.
Conclusions
Cardano Blockchain as we have discussed is dynamic. After the development of the model, there will be room for reviews and adoption. It is not up to its full potential in terms of finance, modeling, participation, and governance yet. This Blockchain will integrate with various areas of life. Currently it's involved in GameFi, Metaverse and DeFi. With its cutting-edge technology, the financial possiblities would both favor the community, investors, and the world at large.
On this note, we present to you the Cardano Blockchain. The Ouroboros Protocol mining platform. A place of limitless wealth possibilities.
Marvin Sunday
For More Details About Cardano Blockchain you can check the following links👇
Check out their website 👉 https://www.cardano.org/
Check them out on Twitter👉 https://www.twitter.com/Cardano/
NB: This is not a piece of financial advice as the Crypto Infoscope Team will not be responsible for any lost accrued from wrong investments. Be careful and do thorough research before Investing.
Thank you
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