What makes Cardano unique?
The major difference between Cardano and other cryptocurrencies is its reliance on peer-reviewed research and evidence-based methods in its development. While most of the crypto market moves fast, Cardano veers in the opposite direction. It takes a slower, more methodical approach. The benefit is that this makes it more likely that developers catch potential threats.
However, there are drawbacks to Cardano's approach. Its development process tends to take much longer than its competitors, which can cause it to fall behind. Critics have also pointed out that today's peer-review system has its issues, so relying on it isn't necessarily an advantage.
Another way that Cardano crypto stands out is that it uses a proof-of-stake protocol to validate transactions. Proof of stake is much more energy-efficient than proof of work, the original consensus mechanism introduced by Bitcoin (BTC -0.50%).
Many cryptocurrencies now use proof of stake, but, for a time, Cardano was the largest. This helped it develop a reputation as a green cryptocurrency compared to cryptocurrencies that used proof of work.
Where Cardano came from
Charles Hoskinson, a co-founder of Ethereum, began developing Cardano cryptocurrency in 2015. He had decided to leave Ethereum a year earlier due to a dispute with fellow co-founder Vitalik Buterin. Hoskinson wanted to make Ethereum a for-profit company and accept venture capital, whereas Buterin wanted it to remain a nonprofit organization.
With former Ethereum colleague Jeremy Wood, Hoskinson created the blockchain engineering company IOHK. That company, the Cardano Foundation, and EMURGO are in charge of Cardano's development.
Cardano launched on Sept. 27, 2017. It's named after Italian polymath Gerolamo Cardano. Its native token, ADA, is named after mathematician Ada Lovelace.
How Cardano works
Cardano validates blockchain transactions with a proof-of-stake protocol called Ouroboros. In proof of stake, any of a blockchain's token holders can set up their own network node and become validators. They must stake their crypto tokens to do this, meaning they pledge their tokens to the blockchain.
For each block of transactions that need to be verified, the Ouroboros protocol pseudo-randomly selects a validator node. Selections are based in part on the amount of ADA tokens the node has staked. The more ADA tokens you stake, the more likely you are to be chosen.
After a validator node confirms a block of transactions and adds it to the blockchain, it receives the block reward. Block rewards are paid in ADA tokens, which gives token holders an incentive to stake.
Since peer review is a big part of Cardano, it's important to know what that means. Before Cardano integrates any new technology, that technology is researched, and the research is peer-reviewed. Cardano's research team includes leading academics and explores a diverse range of fields, including philosophy, sociology, behavior, and game theory.
Cardano Partnerships
Cardano has established quite a few interesting partnerships over the years. Here are a few of the most notable examples of these partnerships and Cardano's role in each one:
- The Ethiopian government has partnered with Cardano to give students in the country's schools blockchain-based IDs. This will allow their academic performance to be recorded and tracked on Cardano's blockchain.
- Global reforestation company veritree is using the Cardano blockchain to store records of the trees it plants.
- DISH Network (NASDAQ:DISH) is integrating the Cardano blockchain as a way to provide digital identity services for its customers.
- Cardano is working with esports company Rival to help it mint and distribute non-fungible tokens (NFTs).
