Cardano is a decentralized platform, the third generation of cryptocurrencies and a competitor to Atrium. Cardano Network digital currency is called ADA and like other cryptocurrencies can be used for direct value transfer.
With the increasing advancement of technology and its integration into people’s lives, cryptocurrencies have become the focus of attention more than ever; Because they can attract investment and transform the world financial system by using latent technology.
In the meantime, Cardano and Rmzarz based network Blockchain of the ADA, by providing new technology, sustainable development, plans to overcome challenges and other problems Rmzarz·ha itself to the future of the financial system and to introduce Become a valuable competitor to Atrium.
In this article, we are going to introduce these cryptocurrencies and give a detailed history of the origin, technology and how this currency works in detail.
What is Cardano (ADA)?
Cardano is the third generation of blockchain and decentralized development platform (Dapp). The platform is the first blockchain to incorporate a peer-to-peer research strategy into its core principles and has attracted the attention of the international media and investors. Today, Cardano digital currency, ADA, is one of the top and most cohesive cryptocurrencies in the world, and investors and analysts often refer to Cardano as the third generation of cryptocurrencies.
The first generation of digital currency was created with the introduction of bitcoin , and the king of cryptocurrencies introduced the world to a decentralized and secure cash system. Shortly after the release of Bitcoin, Ethereum entered the field with a general focus on decentralized application development and smart contracting. This was the goal of the second generation cryptocurrencies, and following Atrium, dozens of other cryptocurrencies were launched with similar goals.
Atrium continued to face problems such as scalability, transaction fees, and currency transfer times, with the introduction of new concepts and the undeniable impact of improving cryptocurrencies; Therefore, it was not long before the third generation of digital currencies was introduced to address these problems. In other words, cryptocurrencies of the third generation borrow lessons learned from the concepts of bitcoin and atrium and improve their shortcomings.
Third-generation cryptocurrencies such as ADAs have new enhancements such as layered architecture to improve scalability, security and stability.
In this way, they create more usefulness than their spiritual fathers, correct shortcomings, and correct inefficiencies.
Cardano is different from its competitors in many ways. Unlike other currencies, Cardano borrows its nature from academic research. The design of this platform has been institutionalized from the beginning using evidence-based methods based on scientific philosophy, academic theory, and has been made available to the public through studied research. Interestingly, Cardano is named after the famous Italian physician Girolamo Cardano . He changed the world in some way after the first systematic calculations of probabilities, and his legacy is still of particular importance over the years.
Cardano has always had an active development team, and the developers have important goals to implement in this project. To that end, the world-class Cardano team seeks to restore confidence in global economic systems by integrating its indigenous technologies. In particular, it introduces a safer, more transparent and sustainable way of doing business internationally. The third goal for Cardano is to help stabilize decentralized applications.
The platform focuses on security and sustainability, which applies specifically to decentralized applications, systems, and communities. Like most blockchains, Cardano is decentralized and not controlled by any authority. Instead, smart trades and contracts are approved by the association with the help of computing power.
As the third generation of cryptocurrencies, Cardano tries to tackle some of the most common issues facing large-scale blockchain usage. These issues include the scope of the blockchain, such as scalability, interoperability, and sustainability. Cardano seeks to overcome these issues by developing design principles and best engineering practices. In its early days, this cryptocurrency was only able to perform about 10 transactions per second (tps).
However, Hoskinson recently published an article detailing the solution to the new scale for the Hydra network. Hydra is a two-tier scaling solution that uses government channels to process out-of-chain transactions. Using this technology, Cardano is able to process more than one million transactions per second, and this is a significant improvement for these cryptocurrencies.
There are thousands of digital currencies on the market today, each with its own characteristics, benefits and ecosystem. Cardano seeks to bring standards to market to enable interoperability between networks. These systems include blockchain governance models, system upgrade protocols, and a host of other features.
The permissibility of blockchain interoperability introduces a new set of risks that developers must manage properly. These concerns relate more to regional security issues, and it is likely that Cardano intends to govern himself properly. Currently, the platform has standards for privacy management, security and decentralization.
Cardano uses Orobrus stock proof technology. Bitcoin, on the other hand, uses a proof-of-work system (fully explained below). In Cardano’s proposed mechanism, the first blockchain entry and the longest ones with the highest computational power are used to determine the authentication.
Cardano uses only the first blockchain, after which the honest chain is proven locally without the need for a trusted party. On the Cardano platform, ADA is present in the solution layer. This layer is similar to Bitcoin and tracks transactions. The second layer is the computing layer and the Atrium-like layer, enabling smart contracts and applications to run on the platform.
In particular, Cardano uses design principles that are very useful for improving issues faced by other cryptocurrencies, such as scalability, interoperability, and regulatory compliance (described below). As mentioned, the governance system used in Cardano is similar to that of Atrium. The network relies on a decentralized autonomous organization (DAO) to approve new initiatives. The DAO is ideal for deciding on the future of cryptocurrencies; Because it helps prevent the disintegration of society.
History of Cardano
Cardano was launched in 2015 as a cryptocurrency network and open source project with the goal of implementing a blockchain platform for smart contracts, and on September 29, 2017, by Charles Haskinson, One of the former founders of Atrium, launched its first programs on the main network. The project is being developed by the Cardo Foundation based in Zug, Switzerland, and the IOHK and Emurgo companies. According to Haskinson, he left the foundation after disagreeing over keeping Atrium nonprofit.
Following his departure, the IOHK Foundation, a blockchain engineering company and Cardano developer, was established alongside the Cardano and Emurgo Foundation. It was not long before Cardano attracted a lot of attention for his innovations in language and VM (virtual machine) design.
In fact, Cardano’s distinguishing capabilities were a direct response to the problems that arose in the Atrium network. Following initial success, Cardano’s development team began working with professors from around the world to incorporate peer-reviewed academic research into its platform design.
Cardano initially offered an initial coin (ICO) to raise capital. The platform was able to raise approximately $ 62 million from a global audience and raise funding to expand the ADA ecosystem. On September 29, 2017, Cardano launched its first program on the main network. This was the beginning of a successful journey for the team. In 2019, Ramzarz Cardano, known as ADA, was launched at Hobby Exchange.
At the time, Hubei was China’s largest digital currency exchange, and the addition of ADA to the exchange could certainly be a turning point in advancing the development of the cryptocurrency. Shortly after Hobby, Bainance, the world’s largest exchange, began supporting ADA in its transactions, raising the price of the cryptocurrency dramatically.
ADA Ramzars is named after the 19th century mathematician and the world’s first computer programmer, Ada Lovelace.Borrowed. Ramzarz initially started with a market cap of $ 600 million, and at the end of 2017, this figure increased to $ 10 billion, and after a short time in 2018, it reached $ 33 billion. At the time of writing, Cardano is now in third place with a market volume of more than $ 40 billion. In total, 45 billion ADAs will be delivered and more than 31.9 billion of them are currently in circulation.
Cardano uses a decentralized team of developers. These developers work in three independent entities. Importantly, they use established standards to ensure interoperability in the ecosystem, and each team is required to provide support for the project. There are currently three foundations responsible for developing Cardano, which we will discuss below.
The first and most important developer of this platform is the Cardano Foundation, which is a non-profit organization. This foundation protects network protocol technology and ensures its performance. In addition, they increase the standardization of departments for further cooperation. IOHK is another science and engineering company that develops technologies in the Cardano network. They also design and maintain these protocols through a two-pronged approach.
Initially, the team researched the basics of cryptocurrencies to uncover key concerns. These topics include theoretical discussions on the best consensus algorithms and privacy protocols, and after completing these steps, the engineering team begins the development process. To perform this task, the team incorporates formal methods in a unique way. This strategy adds a layer of approval to Cardano. The last piece of the ADA riddle is the Japanese company EMURGO.
In 2017, IOHK helped the University of Edinburgh set up a blockchain technology lab. In 2019, Georgian Education Minister Mikhail Batiashvili and Charles Haskinson signed a memorandum of understanding with Tbilisi Free University to use Cardano to build the accreditation system. And In 2018, Cardano partnered with the Ethiopian government to enable Cardano to apply its technology in a variety of industries across the country.
The IOHK (Cardano Development Company) donated $ 500,000 worth of ADA ciphers to the University of Wyoming to support the development of blockchain technology. The New Balance shoe manufacturer will use a distributed office blockchain to track the authenticity of its latest basketball shoes. The platform will be built in Cardano blockchain.
Philosophy of Cardano
Cardano’s team has devised a roadmap to create a vision for the future and strives to adhere to certain principles and philosophies. The focus of this team is on accepting a set of design principles, best engineering methods and ways of exploration. The following are some of the principles and are taken directly from Cardano’s website:
- Separation of accounting and calculation into different layers.
- Implement core components in highly modular performance code.
- Using small groups of academics and developers to compete with peer-reviewed research to develop a peer-to-peer platform.
- Excessive use of interdisciplinary teams, including early use of security professionals.
- Rapid repetition between white papers, implementation, and new research will be required to correct the findings during the review.
- Enabling the ability to upgrade systems after deployment without disrupting or destroying the network.
- Develop a decentralized budget mechanism for future work.
- A long-term vision for improving the design of cryptocurrencies for use on smartphones and creating a logical and secure user experience.
- Bringing shareholders closer to the platform and keeping their passwords secure.
- Authentication requires accounting for multiple assets in one office
- Abstract Transactions include optional metadata to better match the needs of older systems.
- Learn and be inspired by almost a thousand quins by accepting features that make sense.
- Adopt a standards-compliant process, inspired by a dedicated team of Internet engineers, using a dedicated base to lock the final protocol design.
- Create a healthy environment for regulating interaction and trading, without compromising some of the key principles inherited from Bitcoin.
Given what has been said, Cardano seems to have long-term goals for his development, and the evidence suggests that his development team is very determined to overcome the challenges. Taking a quick look at Cardano’s philosophy, let’s look in detail at the three main elements and challenges that this team is working to address.
Element number one: scalability
When it comes to scalability, it usually comes to mind the transactions processed per second or its power. However, according to Haskinson, this is only part of the challenge. Total scalability is a so-called three-headed dragon and can have much wider dimensions than it seems. One must take care of three separate elements, including transactions per second, network throughput, and data scaling.
Many articles have been written about the inoperability of Bitcoin and Atrium. Bitcoin handles 7 transactions per second and Atrium 15 to 20 transactions, which is not acceptable at all for a financial system. Cardano hopes to solve this problem with his consensus mechanism, Ouroboros. This is a reliable stock proof algorithm. Orobrus, as mentioned, is a stock proof algorithm, and before we go into more detail, we need to get acquainted with the concept of proof of performance and proof of stocks and their differences.
Proof of work (PoW)
The Proof of Work (PoW) protocol is a type of zero-proof cryptography proof in which one party (the proofreader) proves to the other (verifiers) that a certain amount of computational effort has been expended to achieve positive goals. Subsequently, approvers can weigh and validate these correct goals with minimal effort on their part.
This concept by Cynthia D. Framework (Cynthia Dwork) and Moni Naor (Moni Naor) in 1993, as a way to prevent denial of service attacks and other abuse of services like spam was invented in the network.
Finally, the term proof of work was first coined in a 1999 article by Marcus Jacobson and Ari Jules .
Bitcoin, by establishing the world of cryptocurrencies, chose the proof-of-consensus algorithm to secure blockchain network security and counter malicious targets, whereby miners must prove their integrity by providing the most rigid power to produce each block.
In a way, miners prove their intentions and help maintain their security by providing their hardware to the network, and will be rewarded by solving computationally compelling puzzles and validating transactions.
Now suppose that a malicious person intends to take over the network, he must have more powerful hardware than all the active miners in the network to achieve his goals, and this is almost impossible in the current situation. In other words, in a situation known as a 51% attack, a hacker must have 51% of the network hardware capacity.
In general, the proof-of-work mechanism is very efficient; However, due to the need for powerful hardware for extraction, it faces important challenges such as high energy consumption and, consequently, an undeniable impact on the environment; Of course, it should be noted that this energy consumption is much more efficient compared to the current banking system.
Proof of stock (PoS)
Proof of Shares (PoS) is another type of consensus mechanism by which a cryptocurrency blockchain network obtains a distribution agreement.
In stock-based cryptocurrencies, the builder of the next block is selected through a variety of conditions, such as random selection and wealth or age.
In stock proofing algorithm, unlike work proof mechanism, there is no need to use hardware; Rather, for the amount of currency allocated to the network, the owner can participate in the next validation and obtain incentives.
To better understand this issue and split the issue, let’s avoid the previous section. In the Proof of Work (PoW) section, we said that in order to create new blocks in the blockchain network, miners must allocate hardware to the network to prove themselves and verify transactions.
In proving stocks, the situation is completely different, and to create a new block and receive a reward, you only need to buy some of the ciphers of that network and finally, assign it to the blockchain network.
The stock proof algorithm is a kind of investment and the validation capacity returns to the amount of assets allocated to the network. Another difference is that creditors are not rewarded, and in fact, it is the transaction fee that is paid to them.
Somewhat like the proof-of-work algorithm, a hacker must have 51% of the currency on the network to sabotage and achieve his goals, and it can be said that this is almost impossible, and even if it happens, the hacker, given that he owns 51% of the currency.
In the circulation of that network is considered, practically any problem and sabotage harms him.
Orobrus; Proof of Cardano shares
Cardano introduced a new consensus mechanism known as Ouroboros. Cardano’s stock proof protocol is set to create an unprecedented decentralization; But the mechanisms that guide and underlie it are still unknown to many. Cardos’s great master and scientist, Aglos Chiaias , understood the depth of the problems of decentralized systems and provided a detailed insight into how to manage Orobrus to solve these problems.
Designing a strong decentralized system is usually very complicated; Because they need to develop models that systematically address all the various threats that the system may face and prove that the stability and viability of the system and network are maintained at all times.
A reliable decentralized system combines formal guarantees against various types of failure and attack models with the largest and most important failure class, the Byzantine models. Byzantine models ensure that the stability and vitality of the system will be maintained; Even if a large number of network participants arbitrarily break the rules of the network.
The second, but equally important, point is the models of rationality, which assume that all participants in the network are maximizers of logical tools, and therefore the characteristics of the system must be derived from their personal interests.
According to Kiaias, what makes Orobrus a unique protocol is the fact that it combines different design elements. In other words, Orobrus uses stocks as the primary source to identify the leverage that participants in the system have.
Aside from resisting indigenous attacks of work-proof protocols, such as the 51% attack and beyond, storage makes the protocol environmentally friendly; Because it requires minimal physical resources to run it.
In general, Orobrus is a chain-based stock-proof protocol that relies on randomly selected leaders to validate blocks, and like most blockchains, the node that adds the next block is rewarded for their efforts.
At the beginning of each period, the system selects leaders from the group of shareholders (those who have allocated currency to the network).
Orobrus looks at the distribution of signals in the ecosystem and divides time into periods from a random number source. Each period is then divided into slots, and each period lasts for a very short time of about 20 seconds. Finally, each slot has its own slot leader that is randomly selected.
The slot leader acts like a miner in a POW (proof of work) protocol. In fact, they are the ones who select the blocks that are added to the blockchain. However, they can only add one block.
If a slot leader somehow loses his chance and does not choose the block, he will miss his chance and will have to wait to become the slot leader again. Finally, one or more slots can be left empty without the generated blocks; But most blocks (at least 50% of a block) must be produced over a period of time.
However, you should definitely be aware of the importance and role of slot leaders in the ecosystem; Therefore, to qualify, one must own two percent of Cardano shares.
These are called selective stakeholders, and they are the ones who select the slot leaders for the next term in the current term. The more stakeholders participate in the system, the better their chances of being elected slot leader.
Now that slot leaders have a lot of power, special attention must be paid to creating a situation where elections are as impartial as possible. Also, there must be some accident involved. This is why a multiparty calculation (MPC) is performed to achieve the random value.
In the multiparty calculation approach, each voter performs a random action called a coin toss and then shares their results with the other selectors. Although the results are randomly generated by each selector; But in the end, the consensus of the votes is agreed on the same final amount. Elections are divided into three phases, including the commitment phase, the open phase, and the recovery phase. Now let’s look at what happens at each stage.
In the first step, a selector generates a hidden random value and then forms a commitment. Message commitment includes encrypted stock (keep this in mind for the recovery phase) and proof of confidentiality. A selector then signs the commitment with his private key, specifies the course number, and attaches his public key.
By doing this, and because the public key is attached to it, everyone can check who made that commitment. In addition, it can be examined to which period the commitment relates. After doing so, the voter sends his commitments to the other voters. Finally, each voter collects the obligations of the other voter. In other words, commitments enter the block and form part of the block chain.
The obvious phase
The second stage is the obvious stage. Think of commitments like a locked box in which there is a secret and a certain value that can unlock the box. This particular value is called the orifice. This is what happens at this stage and the voters send their openings. These openings are also located in the block and then become part of the block chain.
Finally, we have the recovery phase. At this time, a voter has both commitments and openings. However, some voters may be reluctant to publish their commitments without a password and give the locked box to others without a password. In order to circumvent and overcome this issue, honest voters can send all the encrypted shares (as mentioned in the commitment stage) and easily retrieve the secrets. That way, even if some voters act in a destructive way, the system will still work; Thus, by overcoming these obstacles, Orobrus gains his Byzantine fault tolerance.
Finally, a voter acknowledges that commitments and openings are consistent. When this happens, the secrets of the commitment are extracted and form a seed. Sperm is a byte string that is generated randomly. All voters now have this seed. You may be a little misled by the complexity of this process; So, let’s pause for a moment and look at where we are right now.
We select the slot leaders for the next round. We need some kind of accident to make sure the election is as biased as possible. Now the seed of this randomness provides us, and now it is time to select the slot leaders. To do this, the Follow the Satoshi algorithm (FTS for short) is used.
The name of the algorithm is inspired by Satoshi Nakamoto, the unknown creator of Bitcoin. The FTS basically selects a random coin from the stock. Whoever owns this coin becomes the slot leader. This is very straightforward, which is why the more active a person is in the system, the better their chances of winning the lottery. Slot leaders also have the power to select not only the main blocks of the blockchain, but also other blocks within the Cardano ecosystem. Now, the main question is how does the network factor become scalable?
As usual, they carry simple bandwidth data transactions; Therefore, as the number of transactions increases, so does the need for network resources. The concept is quite simple, and if the system wants to scale millions of users, the network needs 100 terabytes or exabytes of resources to survive. Likewise, it will be impossible to maintain a homogeneous network topology; But what does it mean?
In a homogeneous network topology, each node in the network sends each message. Skype, for example, is a prime example of such a network, most of which is taken from a class of users and everyone is interested in making phone calls. However, in a decentralized network, this can be impractical for downsizing.
Not all nodes may have the resources to transmit information efficiently. To solve this problem, Cardano is looking for a new type of technology called RINA, a recursive network architecture developed by John Dee . This is a new type of structural network that uses intelligent engineering policies and principles.
RINA aims to create a heterogeneous network that promises privacy, transparency and scalability. It does this in a way that you can guess how the network is organized in a formal capacity. It also hopes to integrate with TCP / IP protocols. RINA inherently supports the dynamics, multi- computing network and quality of service without the need for additional mechanisms, provides a secure and programmable environment and motivates a more competitive market, and enables integrated adoption.
Finally, we have the scaling of the data. Blockchain stores things for updates. Not every small piece of data, related or unrelated, is stored in the blockchain for updating. As the capacity of the system increases and more people enter, with the massive influx of data, the blockchain becomes larger and larger. Now, remember that blockchain is running; Because it is made up of knots. Each node is a user that stores a copy of the blockchain in its system. Do you see where the problem is? As the blockchain gets bigger, it takes up more space, which is not logical for a normal user and computer.
The way Cardano wants to solve this problem is based on a simple philosophy that not everyone needs all the data. To better understand, let’s illustrate this with an example. Suppose that if Mehdi and Ali enter into a deal, it may not be related to another person in the network.
All they need to know is that the transaction took place and was legal. Techniques that Cardano is exploring include greed, subscriptions, and compression.
If they are applied in synergy, they may actually significantly reduce the amount of data the user needs. In addition, there is the concept of partitioning . Simply put, this means that instead of having a complete blockchain, the user can own part of it and greatly reduce the amount of data needed to store it.
This is exactly the milestone that Cardano’s team hopes to achieve by leveraging side chains. Cardano’s goal here is to use all of this information to compress the data that users need to consume. This should be done in a way that ensures security and ensures that their transactions are done properly. Research has begun at the University of Edinburgh.
Element number two: interoperability
In the previous section, we looked at how Cardano scalability works, now we come to the second pillar, interoperability. According to Charles Haskinson, the ability to work long and short is that there will be no one-size-fits-all code. Let’s look at the current ecosystem. In cryptography, there are various cryptocurrencies, including Bitcoin, Atrium, Light Coin, and so on.
Similarly, in the traditional financial system, we have systems such as the current banks that use SWIFT , ACH, and so on. The problem lies in the fact that it is very difficult to communicate with these individuals. It is difficult for Bitcoin to know what is going on in the Atrium network and vice versa. This doubles when banks try to communicate with cryptographers.
Because of this, encrypted exchanges, which provide a gateway between cryptocurrencies and banks, become very powerful and important.
However, there is a problem. Exchanges are not a decentralized entity and are highly vulnerable. They can be hacked or unavailable for a long time to upgrade the system.
This is basically what happened to Binance Exchange a while ago. In addition, there is another area where this false link between the traditional system and the world of cryptography can lead to a catastrophic outcome in the initial public offering of coins (ICOs). In ICOs, an entity can raise millions of dollars in exchange for its cryptocurrency.
However, saving this money in bank accounts is very difficult. Obviously, banks want to know where all this money came from and who got it, which can be almost impossible to understand.
In general, the need for collaboration is a flexible, risk-free solution. A third-generation cryptocurrency must provide an ecosystem in which each individual blockchain can communicate with another blockchain and with old foreign financial systems; So, let’s look at how Cardano intends to increase interoperability in the world of cryptography and the traditional financial system.
The world of cryptography; Inter-chain communication and side chains
Cardano’s vision is to create a blockchain Internet. Imagine an ecosystem where Bitcoin can flow into Atrium and Ripple without the need for exchanges, and eventually, seamlessly into Lightcoin. That is why inter-chain transfer is what Cardano wants to do without any intermediaries. Cardano tries to make this important by taking advantage of the implementation of side chains. Sidechain, as a concept, has long been encrypted in circles.
This idea is very straightforward; Because by using it, you will have a parallel chain that works with the main chain, and apparently, the side chain will be connected to the main chain through a two-way clamp.
Cardano will support side chains based on research by Kiaias Miller and Zindros (KMZ), including non-interactive proof-of-work. According to Haskinson, the idea of side chains comes from the two elements of getting a blockchain compact and creating interoperability between chains.
What is Cardano used for?
When it comes to increasing interoperability with the traditional financial system, Cardano wants to focus on three obstacles that make the cryptocurrency world incompatible with them. These three barriers are metadata, documentation, and compliance.
Obstacle number one: metadata
Metadata means the story behind the transaction. If Mehdi spends 50,000 Tomans, its metadata can be as follows.
- What did Mehdi spend the money on?
- To whom did Mehdi give that money?
- Where did Mehdi spend the money?
Although this is not well planned in the cryptocurrency space; But in traditional banking it is very necessary. In fact, this is one of the main reasons why most institutions try to send ICOs. They simply do not have the metadata needed to provide banks. In the current financial system, metadata is extremely important; Because it can be effective in purposes such as discovering and identifying resources and creating electronic data organization.
In addition, metadata allows data to be exchanged between different systems, thus improving interoperability between parties, is very useful in conserving resources, and helps to identify the characteristics and behavior of data so that it can be used when needed. Be reproduced.
However, the problem with metadata is that it is very personal, and because data is stored permanently and transparently in the blockchain, we are in a situation where very private information can be permanently linked to the blockchain. One of the main things Cardano is researching is how metadata can be selectively linked to the chain.
Obstacle number two: Documents
Documents, like metaphors, are identified by assigning the names of the persons involved in the transaction; But is a particular deal basically attributed to everyone? If the blockchain permanently eliminates the assignment, the privacy of the people involved will be severely compromised. Therefore, Cardano intends to enable its users to play documents whenever necessary.
Obstacle number three: compliance
The third obstacle is compliance. Compliance includes factors such as KYC (Know Your Customer), AML (Anti-Money Laundering), ATF (Counter-Terrorism Financing), and more. Conformity is also used to check the legitimacy of a transaction. Basically, if Mehdi pays Ali 50,000 Tomans, the adaptation is used to ensure that the transaction is not done for evil purposes (for example, money laundering).
While the world of cryptography is not really useful in this area, it is very important in the world of banking where the history and legitimacy of any transaction must be known. What Cardano is researching is how to use metadata and documents, along with adaptation, to help users whenever they need to interact with banks.
Element number three: sustainability
Finally, we come to the third pillar, sustainability. According to Haskinson, this is the most difficult step in overcoming the challenges. This means how Cardano intends to secure his future development and growth costs.
Usually, grants and ICOs will be needed to develop the platform and make some improvements to the system. However, both methods deal with a single challenge and problem. With support, the problem of potential focus will be created.
If a large company provides a large amount of grants to a blockchain-based company, it may guide and influence the course of changes in the system. With ICOs, this is like a sudden shake-up of money, without sustainable models, and adds a completely unnecessary code to the ecosystem. With that said, something different and more sustainable needs to be done. Cardano plans to draw on Dash Dash and create a treasury system.
How Treasury Works
Each time a block is added to the chain, part of the block bonus is added to the treasury; Therefore, if someone wants to develop and change the ecosystem, they will send a vote to the treasury to ask for a grant, and if they do, the sender will receive a development grant. This system has two main advantages. As more blocks are discovered, the treasury continues to fill up.
It is also directly proportional to the capacity of the network, and as the network grows, more resources are available and the voting system becomes more decentralized. However, there are some major obstacles before using this feature. These challenges are as follows:
- A fair voting system needs to be established.
- Voters should have incentives to vote and participate in the system.
- The vote of all people must have some value so that the situation of the type of tragedy of the common people does not occur.
- The voting process should be easy and simple.
- The whole process should be as decentralized as possible.
For some time now, Cardano has identified a system that he could possibly use to overcome these challenges. The system is a combination of the liquidity of democracy and the incentives of the treasury model.
How Liquid Democracy Works
Liquid democracy is a system that shifts between direct democracy and representative democracy. In this process, people can vote directly for their policies and responsibilities of individuals and representatives can delegate your vote can vote on their policies, delegating them.
This feature in which a representative can appoint a representative is called portability. If the person who casts his or her vote does not like the vote of his or her representatives, he or she can easily withdraw his or her vote and make a new policy decision; So, what are the benefits of Liquid Democracy?
In the liquidity of democracy, the opinion of each individual is important in creating the final policy and plays a significant role in it. To become a representative, all you have to do is gain the trust of the person.
With this system, you will no longer need to spend millions of dollars on expensive campaigns. For this reason, barriers to entry are relatively small and negligible.
Because of the option of swinging between direct and delegated democracies, minority groups can be represented more fairly. Eventually, a scalable model will be created, and anyone who does not have time to vote on their policies can easily relinquish their voting rights responsibilities.
Haskel and Pluto programming languages
Cardano is programmed in Haskell and its smart contracts are coded in Plutus. To understand why such an approach is unique, we need to better understand some principles about programming languages. When it comes to programming languages, they are categorized into essential and practical programming.
Essential programming languages
In an essential approach, the encoder must follow all the steps that the computer takes to achieve a goal. All traditional programming languages such as C ++ , Java and even Solidid programming languages are essential. This type of approach is also called algorithmic programming. Now let’s break down an example. Suppose we check C + and want to add 3 and 5.
Therefore, as you can see in the example above, the collection process goes through several stages, and each stage is constantly changing the status of the program; Because they all run separately. A four-step collection process, the steps are:
- Declare the integer a and assign the value 5 to it.
- Declare the integer b and assign the value 3 to it.
- Then Declare an integer c.
- Add the values of b and store them in c.
Cardano Application programming languages
The second family of programming languages is application languages. This programming style was created to create a practical approach to problem solving. This type of approach is also called declarative programming; But how does application programming really work? Suppose there is a function f (x) that we want to use to compute a function g (x) and then we want to use it to work with a function h (x).
Instead of solving all the cases in a sequence, we can add them all in a single function like this h (g (f (x))).
This makes the practical method easier to reason mathematically. That’s why applications are supposed to be a more secure approach to building smart contracts.
It also helps simplify formal verification, which almost means that it will be easier to do the math, work, and process. This feature will equip Cardano with a highly reliable code. Let’s take an example of this fact and see why in some situations it can be very vital and even life-saving.
Suppose we are programming to control air traffic. As you can imagine, the coding of such a system requires a great deal of precision; Therefore, we can not blindly encode anything when people’s lives are in danger. In situations like this, we need code that can be proven to work with a high degree of mathematical certainty.
This is exactly why the practical approach shows its importance, and as a result, Cardano uses Haskell to encode ecosystems and Pluto to encode its smart contracts. Haskel and Pluto are both functional languages. Some of the advantages of the applied approach are as follows:
- Helps to create a high security code; Because it is easier to prove how the code behaves.
- Increases readability and maintainability; Because each function is designed to perform a specific task, the functions are also independent of the state.
- It is easier to break the code and it will be easier to make any changes to the code. This makes duplicate development easier.
- Individual functions can be easily disassembled, making them easier to test and debug.
Despite the advantages mentioned, the programming languages also have problems. For example, finding a Haskell developer is much more difficult than finding C ++ and Java developers and must be extensively tested in real-life situations.
For continued development, Cardano has a long-term roadmap and plans to improve and expand its platform by providing a number of updates. The Cardano roadmap is released in five stages, most of which are about to be implemented or about to be implemented. These are the five steps:
- Byron: Enables users to trade and transfer ADA. Cardano’s main network was also launched.
- Shell: Ensures that technology is available to turn it into a fully decentralized and autonomous system.
- Gogun: will see the merger of smart contracts.
- Basho: Prioritizes performance improvement.
- Voltaire: The IOHK will add a treasury and governance system.
How to buy Cardano
For those who want to invest in ADA, there are countless exchanges where you can register to buy Cardano Ciphers with the ADA logo. Buying from Bainance Exchange is one of the easiest exchanges to join; Of course, it should be noted that due to some issues, this exchange does not support IP Iran, and to register in it, you must consider all the aspects and risks of blocking. Once you have completed the registration and verification steps, you can convert Bitcoin or Tetra directly to ADA in a matter of seconds.
How to store Cardano
ADA storage is not difficult and you can store it in hardware wallet or software wallets installed on smartphones, tablets and computers. Each of these methods has its own characteristics; Therefore, you can use a combination of them. Mobile wallets are a great way for newcomers to enter the cryptocurrency market. It is free to download, very easy and highly secure. These can often meet the needs of investors.
The official software wallet is called Cardano Daedalus. This bag is very safe and provides useful features to the user. You can download the wallet from the official Cardano website on Windows, Mac and Linux computers. Meanwhile, more professional users with more transactions and more security reasons can consider hardware wallets. Hardware wallets are more secure than mobile wallets; Because it stores cryptocurrencies offline and in very safe conditions. Ledger Nano S, or the more advanced Ledger Nano X, both support ADA and could be ideal options for secure storage.
Despite Cardano’s strong dependence on the academic community, there are still some people in the industry who point to potential network problems. Specifically, Vlad Zamfir, a researcher in the Atrium stock proof algorithm, argues that chain voting is dangerous. He points out that the forces of the system change the rules in complete nodes.
This strategy eliminates an important consideration and balance provided by knowledgeable node operators; But by passing this argument, the evidence shows that Cardano will be a key element in the blockchain sector for years to come, given the network’s continuity and growing network.
The unique approach and its technical advances will surely continue to be a hot topic in this sector as development continues. Cardano and its cohorts pursue long-term, coherent goals to make the platform even better, and many experts believe it could be a tough competitor to Atrium.
At the time of writing, ADA, in close competition with BNB (Bainance Network Cryptocurrencies), is in third place in the list of highest cryptocurrency transactions, one step behind Atrium.