It’s Not Just About Hard Forks! Meet The Incredible Crypto Project, Cardano. The Ethereum Killer
Updated: Aug 17
“Thanks to the excitement surrounding its upcoming Vasil Hard Fork, #ADA surged over 20% to become one of the best-performing cryptos last week.” -BTCC @YourBTCC June 6, 2022
The Hard Forks and the Rise of Cardano
Boosted by June's Vasil Hard Fork, Cardano (ADA) is up by more than 20%, leaving it in the top ranking among the best performing coins in the last week (6/7/2022).
It’s performing a similar effect to the "Alonzo" update carried out in September 2021, which introduced functionality to the network's smart contract. In this case, the currency rose by more than 200%. Or like March’s 2021 "Mary" Hard Fork, preceding a 1600% rally.
What Are Hard Forks?
A hard fork in the cryptocurrency world happens when a blockchain splits into two different directions. The idea is that Fork A can't exist without Fork B, and vice versa.
In other words, they're two completely different chains that share a history up until a certain point. From that moment on, they develop independently.
There are several reasons why a team would want to hard fork their project: Maybe they want to change the consensus algorithm or the block size. Or, perhaps they want to add or remove features.
In the case of Cardano, the team behind the project has been hard forking the network regularly to implement upgrades and new features. These upgrades have been known to dramatically increase the price of the cryptocurrency (ADA).
However, these increases took place in a bull market context, without the presence of a threat to the world economy like we're experiencing today.
With a constant migration of investors away from the technology sector and preferring more conservative and safe businesses, does Cardano still deserve a space in our portfolio?
Cardano is arguably one of the best projects on the market in terms of decentralization, reliability, and development team.
The currency's social assistance intentions attract the attention of the most diverse investors and philanthropists. Projects that provide access to a financial system for African countries such as Ethiopia, Nigeria, and Tanzania create a much greater sense of purpose for ADA investors.
Its development began in 2015 with Madeira de Jeremy and Charles Hoskinson with the company IOHK.
Hoskinson is a well-known cryptocurrency entrepreneur in the crypto world because he co-founded the second largest currency: Ethereum. Philosophical and purposeful disagreements in terms of usability and community led to his departure from the project, to eventually develop what we now know as Cardano.
The project is named after Girolamo Cardano, an Italian academic and physician known for the first systematic probability calculation. Its native token, ADA (Accessibility Act), is named after Ada Lovelace, a prominent British mathematician and author best known for her work on a general-purpose mechanical computer analysis engine proposed by Charles Babbage. From this point, the clear scientific tone of the project is evident in every way.
Layered segmentation means that the network is divided into two layers: one that runs smart contracts and another that deals with accounting (ledger).
The two-tier segmentation on the part of Cardano's Blockchain system is sensational. The liquidity and computational layer allow differentiation between trades and smart contracts.
1. The CSL Layer
CSL (Cardano Settlement Layer) is the reading layer for scripting languages needed in network operations. It also features enhanced protection against transaction rollover and the ability to provide sidechain interoperability. Several types of cryptographic signatures are supported, including quantum-resistant signatures.
Simply put, this layer is responsible for all the "smart contract" operations. It's protected by the world's most versatile cryptography. Cryptography is the practice of secure communication in the presence of third parties. This means that your private messages are safe from being read by anyone other than the person you're communicating with.
2. The CLL Layer
The CLL (Cryptographic Link Layer) is responsible for storing information about transactions carried out on the platform. The idea here is to provide additional functionality that doesn't get in the way of core network consensus (CSL).
This is the storage protection for transactional information. Basically, it's where all the information about the movements that take place on the network is registered. This includes monetary transactions from person to person and protects the data against any type of fraud that could be carried out.
ADA and Its Staking Technology
Due to the high versatility and adaptability of the currency, it is possible to make constant evolutions and improvements to the platform. This is thanks to hard forks, allowing freedom of expression within the parameters of the community.
ADA uses POS (Proof of Stake) technology, which is a blockchain system that draws, through a pseudo-random election process, someone with the staked coin so that it can perform the verification and create a new “node” to guarantee the success of the transaction.
Instead of using a dispute for computational power, as in the POW (Proof of Work) system used by Bitcoin or Ethereum, all stake members of that currency are randomly chosen to perform the necessary validations.
There is then, however, a preference for validators with more of the staked coin. Some people worry that this will lead to centralized control. But staking pools help to combat this by allowing those with less ADA to still get their piece of the stake.
By pooling cryptocurrency together, members are more likely to be chosen as a validator, and they can then earn rewards based on the number of coins they have staked. This gives smaller ADA holders a chance to participate and get rewards, while still maintaining decentralization.
The benefits of staking coins in the Cardano network are:
● You will have a direct impact on the evolution and success of the project
● The more you stake, the more you will be rewarded
● Staking your ADA allows you to participate in the governance of the project
● The staking process is relatively easy and does not require any specific technical knowledge
If you would like to make money while you wait for your Cardano investment to appreciate, Coinbase makes it easy to earn interest automatically from holding ADA tokens. You can sign up for Coinbase here.
POS vs POW
Cardano uses the POS protocol (Proof of Stake) to achieve consensus on the network and mint new blocks, while POW (Proof of Work) is used by Bitcoin and Ethereum. POS has many advantages over POW, including:
Higher scalability since there is no need for powerful hardware: This is because, in order to validate a block, it is not necessary to carry out computationally intensive operations as it happens in POW.
Elimination of mining centralization: Since anyone with a staking coin can validate a block, there is no longer any need for large mining pools.
Higher energy efficiency: The POS system requires much less energy than POW since it does not require powerful hardware.
Some proof-of-work enthusiasts will criticize this system, as it does not require any work or investment to validate a block, but only to have a stake in the currency. However, it should be noted that the POS system is still in its infancy, and improvements are constantly being made to make it more secure.
With that being said, proof-of-work does offer some distinct advantages of proof-of-stake:
The POW system is more secure against attacks: To carry out a 51% attack, an attacker would need to control more than half of the total computational power of the network. This is much more difficult (and expensive) than simply owning 51% of the total supply of the currency.
The POW system is more decentralized: This is because, to validate a block, anyone with a computer can participate in the mining process. This is not the case with POS, where only those with a stake in the currency can validate blocks.
The POW system is fairer: In POW, everyone who participates in the mining process is rewarded in proportion to their computational power. This is not the case with POS, where those with a larger stake in the currency will earn more rewards.
Which One Is Better For Cardano?
Charles Hoskinson and the Cardano team decided that proof of stake was the way to go for many reasons. The main reason is that proof of stake is more scalable than proof of work. This is because to validate a block, it is not necessary to carry out computationally intensive operations as happens in POW.
Cardano also plans to introduce smart contracts and dapps (decentralized applications) to its platform. This is something that is not possible with POW, due to its scalability issues.
Cardano is, therefore, more suited to proof of stake than proof of work, and this is one of the reasons why it has been so successful so far.
The Cardano team is constantly working on improving the platform and making it more user-friendly. They are also planning to launch several new features in the near future. Some of the things that the Cardano team is working on include:
Smart contracts: This will allow developers to create dapps (decentralized applications) on the Cardano platform
Sidechains: This will allow developers to create scalable decentralized applications
A mobile wallet: This will allow users to store and use their ADA on their smartphones.
The Cardano team is also working on several other projects, which are all aimed at making the platform more user-friendly and increasing its adoption.
Cardano is a very ambitious project, and it has the potential to disrupt the crypto industry. With its strong team and partnerships, Cardano is well on its way to becoming a top 10 cryptocurrency.
The Cardano Peer Review System
Peer review means that a group of people with expertise in a particular field (in this case, cryptocurrency) reviews a project to see if it is up to standard. The Cardano team has set up a peer review system to make sure that all the code that is developed for the platform is of high quality.
This is important because it helps to filter out poor quality code, and it also helps to improve the code that is developed for the platform. The peer-review system is also a good way to keep the Cardano team accountable, as they are constantly being reviewed by their peers.
The Cardano peer review system helps prevent bugs and errors from slipping through the cracks, and it also helps to keep users safe from potential attacks.
When issuing a research certificate for a given update, verification is performed by an IOG (institute of governance) member. And once this certificate is in the hands of a specific journal or congress, the peer review process begins through a group of experts.
Traditionally, a whitepaper is written without the slightest verification of efficiency. This is problematic because many times the ideas are not properly worked out and they lack precision. The peer-review system helps to mitigate this by verifying the code before it is released.
The tokenomics can also be verified (e.g. whether the distribution is fair, whether the monetary policy makes sense).
Cardano is criticized for this process because it takes extra time to ensure that each project meets its standards. Each scientific article requires additional effort, however, it shows that the Cardano team cares about the quality of their product.
Whether it be hacks, scams, or projects that don't make logical sense, crypto enthusiasts are susceptible to being taken advantage of. The peer-review system set up by Cardano helps to protect users from these kinds of risks.
Users will appreciate this system, and it will help with Cardano's rise to the top position when it comes to smart-contract blockchains.
This peer-review process is also more realistic as products should go through quality checks and assurance. This is the best way to avoid any possible mishaps that could lead to major financial loss or theft.
Peer-reviewed is an important aspect of the scientific community and Cardano will be one of the few blockchains that are taken seriously by these institutions. With support from these institutions, Cardano will have a better chance at being adopted by the masses.
The Cardano team is very adamant about keeping this system in check. As cryptocurrency users, we should be excited to know that a blockchain is being created with such high standards.
This peer review system is exactly the bull thesis for why Cardano could appreciate 100x over the next decade. Over the past months we have seen multiple outages for Cardano's blockchain competitor, Solana, where the network went down for many hours. The developers of Ethereum are realizing that their current proof of work system (the process of mining and recording transactions) has been made obsolete in recent years, and is scrambling to quickly merge to a proof of stake system (recording transactions based on a user's stake in the blockchain).
With the peer review system, Cardano's emphasis is getting the technology right the first time. By ensuring the best programming methods are implemented from the start, Cardano's network may be the most reliable, robust smart contract platform available in the near future that avoids frequent, jarring updates. This will attract the best programming talent to the network and decentralized applications, which will attract more users, and will attract more decentralized smart contracts applications in a perpetual, virtuous cycle.
The quality of its technical documentation, whether through peer reviews, or with the generation of new and interesting technology concepts, are examples of Cardano's potential.
Furthermore, their ADA token is probably one of the fastest-growing tokens in the crypto community right now, ahead of several projects with international media weight.
Thanks to the “Shelley” phase carried out in June 2020, the network is able to improve the decentralization of the network and increase its scalability through the application of the Ouroboros Praos consensus algorithm. As a result, the network has become more decentralized, secure, faster, and more scalable.
Like any other project, there are challenges. In this case, there are both technological and social challenges. It is important for there to be social acceptance of digital currencies and blockchain technology in order to create a healthy and valuable economy for the platform.
There are admirable and inspiring projects, but only few have the potential to be market leaders.
The idea of the Cardano project, therefore, is to transform ADA into a first-class token, surpassing Bitcoin or Ethereum, by enabling cheap and secure transactions using a platform-native token with powerful, scalable smart contracts.