Cardano

overall rating:

2.4

planets

Forbes Wigmore
11/16/2021
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Cardano is a third-generation decentralised proof-of-stake (PoS) blockchain platform which facilitates the creation of a Decentralised Finance (DeFi) ecosystem. The cryptocurrency was developed by Charles Hoskinson, an Ethereum co-founder, and was launched in 2017. Due to it using a PoS rather than a proof-of-work (PoW) system, it is designed to be much more efficient than other cryptocurrencies such as Bitcoin.

Cardano functions mainly as a digital currency, however, it is also used for digital contracts, DApps (a decentralised app that runs on blockchain and allows the user to utilise many features similar to those found from a conventional Android or Apple store), and provides other utilities. Cardano was the first PoS blockchain platform to be founded on peer-reviewed research and developed through evidence-based methods. Cardano describes itself as a ‘blockchain platform for changemakers, innovators, and visionaries.’ It exists to ‘redistribute power from unaccountable structures to the margins– to individuals and be an enabling force for positive change.’

Cardano offers a sustainable, energy-efficient, and secure network with which the many advantages of the blockchain can be used effectively. Its PoS system allows it to consume a fraction of the energy that Bitcoin or Ethereum use (although Ethereum through its 2.0 updates will transition from a PoW to PoS system). As a result, Cardano receives an overall planetary score of 2.4.

What it's made of:

2.7

Cardano is a decentralised PoS blockchain platform that users, with technological means, can connect to from across the globe. The platform’s main applications include the verification of credentials, a decentralised finance eco-system, and non-fungible tokens (NFTs). Its native token/currency, Cardano (ADA) is the sixth-largest cryptocurrency with a market cap of just under $68 billion US dollars. The current price of one Cardano token is $2.03 and there is a circulating supply of just over 33 billion tokens.

Cardano, a third-generation cryptocurrency, was developed according to its founder Charles Hoskinson to build a ‘scalable system, an interoperable system, and a sustainable system.’ Cardano relies on a PoS system called Ouroboros. Ouroboros can be seen as the foundation of Cardano and its sustainable, transparent, and decentralised network. It combines unique technology and mathematically-verified mechanisms to ensure the sustainability and security of the blockchain. At the heart of this is the concept of infinity. Cardano believes that ‘global networks must be able to grow sustainably and ethically,’ attributes which have been the Achilles heel of first-generation cryptocurrencies like Bitcoin. The efficiency of Cardano compared to platforms like Bitcoin can be seen by comparing the number of transactions facilitated by the network in a second. According to LeafScore Bitcoin’s network can accommodate seven transactions per second in comparison to Cardano achieving 1,000 per second.

Cryptocurrencies offer an incredibly inventive and exciting way to innovate, develop and provide services to humanity. Fundamentally, these cryptocurrencies offer a secure and transparent network with which businesses, organisations, and individuals can interact. Unlike Bitcoin, Cardano does not require a significant amount of energy. Thus, with Cardano, the benefits of a transparent, innovative, and secure network are available to users without as much of a concern for unsustainable practices and energy inefficiencies.

An example of the value of the blockchain platform is apparent when looking at education in sub-Saharan Africa. As Charles Hodgkinson notes there is a serious issue in verifying the legitimacy and the credibility of educational and professional credentials. Blockchains such as Cardano can provide a system whereby credentials can be stored cheaply and in an immutable, transparent, and secure manner. The great excitement with blockchain is the possibility of a more equitable, secure, and just system. As Hodgkinson stated, ‘the biggest system that needs an update because of globalization and the internet is the financial system.’ Cardano makes this very possible with sustainability in mind.

How it's made:

2.5

Cardano works on a PoS system. In the PoS network participants (computers connected to the blockchain) run nodes. This network selects a node to add the next block, based on the stake and other parameters of a node. This means that block producers (block refers to the token) do not need to rely on an extensive amount of time, computer power, and subsequently energy to solve complex cryptographic mathematical problems. Put more simply, instead of energy-intensive mining participants in the currency can buy tokens to join the network.

This system allows Cardano to be much more energy-efficient than compared with cryptocurrencies which rely on a PoW system. In fact, Hodgkinson remarked that Cardano’s protocols are much “lighter and much more energy efficient.” This for example equates to Cardano being “1.6 million times more energy-efficient at the moment than Bitcoin.” This system means that Cardano’s network only consumes 6 GWh of power. This process has led Cardano to be referred to as ‘the green blockchain.’

One of the most unique facets in the development of Cardano is its infrastructure. It is the first blockchain platform to evolve out of scientific philosophy. This has allowed it to be developed for function and scale. Furthermore, Cardano is constructed in a modular way that includes various system components that interact together. This allows for a faster, reliable, and secure network.

Furthermore, the network is designed to ensure ‘those who act in the best interests of the network are also acting in their own best interests, which ensure the development of a ‘healthy ecosystem.’ The platform has been developed using the Haskell programming language. The Cardano blockchain platform has come to fruition as a consequence of evidence-based science.

By developing a peer-to-peer blockchain platform through the collaborative efforts of engineers and academics, Cardano offers an efficient, sustainable, and innovative network to support individuals, governments, and businesses.  

Who makes it:

2

Cardano is unique in that it is the only project that follows a scientific approach to develop its blockchain, which is peer-reviewed by engineers and academics. Its decentralisation much like other cryptocurrencies enables it to offer a transparent, secure, and innovative global system. Cardano developers believe they have “changed science” as they’ve “changed what it means to build global systems and sustainable models of exchange and governance.”

The PoS democratises the process of creating Cardano tokens. Due to there being no need for energy-intensive computers and processes, low-powered processors can be used. These are readily available and cost just $40-70 US dollars. This would enable lower-income households and populations to have access to the blockchain network and the utility of the token. This is a huge advantage over PoW cryptocurrencies that rely on excessive energy consumption to fuel powerful mining rigs and computers.

As the example of education in sub-Saharan Africa demonstrated the viability and applicability of a blockchain network like Cardano are hugely exciting within less-developed nations. The ability of participants to buy into Cardano and its reliance on an extremely energy-efficient system make it an attractive and sustainable option for investors.