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What Is Cardano (ADA)? Everything You Need To Know!

Cardano is one of the most well-coded blockchains in the space, directly addressing some of the biggest issues that blockchains currently face.

What is cardano

Cardano is a proof-of-stake, decentralized network based on blockchain technology with smart contract capabilities. Setting it apart from its competitors is that the technology behind it is based on peer-reviewed research and developed by academics. This means Cardano is one of the most well-coded blockchains in the space, directly addressing some of the biggest issues that blockchains currently face.

While there have been more than a few “Ethereum killers” to date, Cardano stands as one of the most well-positioned. With a passionate fanbase, highly-skilled development team, and a resilient network, Cardano is potentially a sleeping giant in the crypto space.

Here, we’ll take a deeper diver into all things Cardano, looking at its history, the technology that underlies the network, and where the future may lead.

What is Cardano (ADA)?

Cardano was launched in 2017 and is written in the computer science language, Haskell. It began life as an idea by its creator, Charles Hoskinson, in 2015, who was one of the co-founders of Ethereum. The network was built with a focus on academic, peer-reviewed research in mind to distribute power through decentralized blockchains.

The Cardano network itself is used to power its native cryptocurrency and decentralized apps through its implementation of smart contracts. It is named after the Italian mathematician Gerolamo Cardano.

The Cardano cryptocurrency trades under the symbol ADA and is named after the English mathematician and writer Augusta Ada King, the Countess of Lovelace, a personal inspiration of Hoskinson who was instrumental in the invention of Charles Babbage’s computing machine.

Third-generation blockchain

Cardano is considered a third-generation public blockchain in that it seeks to resolve the three main issues that the first two generations of crypto-networks have encountered.

These are scalability, interoperability, and sustainability.


One of the biggest problems that the first two generations of blockchain still face is the problem of scalability. Due to its proof-of-work consensus algorithm, Bitcoin, for example, can only handle around 5-7 transactions per second. This is not a problem in the early days of a blockchain when the strain on the network is low.

However, as a proof-of-work blockchain finds itself used more, computational power becomes more expensive, with each transaction trying to become processed simultaneously. Ethereum, for example, is now suffering from this problem, with high gas fees as a result.

Cardano aims to address this through its unique consensus mechanism, Ouroboros, and in-house layer-2 scaling solution, Hydra.


Another issue that Cardano seeks to address is the problem of cross-chain interoperability.

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With drastically different code and technology, the existing crop of blockchains is unable to communicate with each other. This would be like Android phones requiring Android routers in order to access the internet or emails sent from an Outlook account not being accessible from a Gmail inbox.

With an abundance of blockchains now in the cryptosphere, there is an increasing issue of an inability to communicate between these networks. While the ultimate aim of blockchain technology is to decentralize and distribute power, the inability of these blockchains to allow transact with each other has resulted in networks like Ethereum to dominate the landscape. This then compounds the issue of scalability, causing major congestion on dominant blockchains like Ethereum. It also stifles innovation, prohibiting the full benefits of blockchain technology.

Cardano is hoping to link these disparate networks together, somewhat, through its cross-chain bridge technology. Cardano’s dev team already has an Ethereum bridge through the K Ethereum Virtual Machine (KEVM), meaning that smart contracts can now be read and converted easily between the platforms. Morecross-chain bridge solutions are in development.


While the Cardano network’s proof-of-stake consensus algorithm is estimated to use considerably less energy than proof-of-stake models, sustainability, instead, refers to the ability for the network to continue thriving and growing in a self-sustained manner.

Cardano achieves this through its treasury system which pays out rewards to those who help support the network through staking their ADA. This means governance of Cardano happens on-chain, with the purpose of the treasury to “resolve the funding sustainability issues for long-term cryptocurrency development and maintenance.”

Changes to the network are implemented via vote, with voting power being proportional to the amount staked. Cardano uses a system called Liquid Democracy, a mix of direct and representative democracy. Applied to the Cardano blockchain, the idea is that, eventually, holders of ADA will be able to vote directly or delegate their vote to pools via staking. Staking in pools that align with a holder’s opinions means individuals will mean small voices will be heard on a large scale.

Unlike other blockchains, these solutions are baked into the DNA of Cardano, with the network designed from the ground up for mass adoption.

Cardano’s journey so far.

Cardano began life as a research project for Charles Hoskinson, who had found himself at odds with his colleague, Vitalik Buterin. The two disagreed on the future of Ethereum, of which they were co-creators and this resulted in Hoskinson leaving the project to form his own blockchain.

After two years of work, Hoskinson and his team publicly launched Cardano on September 29, 2017.

The project roadmap involves five stages:

Phase 1 – Byron (September 2017)

Byron marked the initial launch of Cardano allowing users to send, receive, and store ADA.

Phase 2 – Shelley (July 2020)

Shelley brought staking to Cardano and led to a significant increase in Cardano’s market cap. Through the introduction of staking, the network became more decentralized, implementing the idea of independent validators that secure the network.

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Phase 3 – Goguen (September 2021)

The Goguen (Alonzo) update successfully implemented NFTs and smart contracts into the blockchain allowing automatic, self-executing agreements. Whereas Ethereum uses the Solidity coding language for its smart contracts, Cardano uses Marlowe, which is potentially a lot more user-friendly.

Phase 4 – Basho (TBD)

Basho will bring sidechains to Cardano, assisting the network in scalability. This will allow considerably more transactions per second to be performed by performing transactions off-chain before updating the public ledger. This takes a large amount of strain off the main blockchain and is considered one of the best solutions to scalability.

Phase 5 – Voltaire (TBD)

The last state of the roadmap, Voltaire, will bring self-governance to the blockchain. Holders will be able to use their ADA to vote on how the treasury is spent on development and what changes should be made to the network. Coin holders will be able to make change proposals, and others can then vote on these, with votes being proportional to the amount held. This is to decentralize the network yet further, putting power into the hands of the community.

How is ADA mined?

Cardano’s native cryptocurrency, ADA, isn’t actually mined. Whereas with blockchains like Bitcoin, coins are “discovered” by miners, with Cardano, we have validators. These validators are chosen by the network itself to validate transactions based upon how much ADA they hold.

The system is known as Ouroboros and is Cardano’s proof-of-stake algorithm that sets it apart from its rival blockchains. Ouroboros is an academically developed, peer-reviewed solution to the problem of consensus that uses some novel ideas. It provides the same guarantees that Bitcoin’s proof-of-work consensus model does, but without the problems.

Ouroboros does this by splitting transactions into what’s called epochs that are themselves divided into slots of time. Each time slot is allotted a leader, and for that period, they are responsible for writing blocks to the chain.

The model essentially uses an idea named the “honest majority” to elect leaders and presumes that large stakeholders are likely to be honest due to them having more to lose if transactions are invalid.

What this all means is that instead of using expensive GPUs to mine, that money can simply be invested into the network and staked. This, in turn, rewards “stakers” for helping validate the network with ADA distributed automatically.

DeFi, NFTs, and dApps

Cardano is one of the biggest blockchains in the world and is making inroads with world governemnets and nations such as Ethiopia and Georgia to implement the technology at a state level. This helps decentralize governance and power, with the aim of empowering people instead.

In practical terms, ADA can be used as any other cryptocurrency but is yet to receive the same recognition as Bitcoin as a currency that can rival fiat money.

With smart contracts now implemented, the future is looking bright for Cardano as it begins to roll out its first generation of dApps. The network is now seeing its first decentralized exchanges (DEX) appear, such as MuesliSwap and SundaeSwap. Activity on these dApps is growing every day, and the expectation is that Cardano’s more robust platform may take some of the wind out of Ethereum’s sails.

Cardano is expected to gain some ground on Ethereum in the NFT space, too, with marketplaces such as Verlux looking to be the blockchain’s equivalent of OpenSea and Rarible.

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The Future of Cardano

With a network that uses a fraction of the energy that Bitcoin does and a peer-reviewed solution to scalability and cross-chain communication, Cardano is setting itself up to be future-proof.

The team behind Cardano has been busy releasing light mobile wallets, integration with the ISS-integrated Chainlink network, as well as an official dApp store.

Recent data also suggests that Cardano is second only to Ethereum in terms of development activity too, indicating a faith in the network that will see it stick around longer than some rivals.

While the slow development of Cardano frustrates some, its slow and steady pace appears to be working, creating a robust and secure network that should stand the test of time.

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