Cardano was released in 2015 with the intention of learning from and improving on bitcoin and the many other cryptocurrencies in existence. In particular, the modularity of the different elements of the protocol and the integration with existing system was important.
Charles Hoskinson, a founder of Ethereum, is part of the core group that launched the new blockchain at the end of September 2017. After leaving Ethereum in 2014 and founding IOHK with Jeremy Wood, a Japanese group Emurgo commissioned IOHK to develop a new cryptocurrency.
Between 2015 and 2017, vouchers for the yet-to-be-released ADAs, the token associated with Cardano, were sold via crowdsourced sales – but the sales were limited to buyers in Japan. Sales of ADA became publicly available in early October 2017. (Bitcoin Magazine, Oct. 2017)
Two main features are components of this blockchain: the cryptocurrency, the Cardano Settlement Layer, and the smart contract system, the Cardano Computational Layer.
ADA, the cryptocurrency’s token, instead of using a proof-of-work system for consensus used by cryptocurrencies such as Bitcoin, uses a peer-reviewed proof of stake algorithm for Ouroboros. This has the advantages of more rapid transaction confirmations and much-reduced energy consumption but tends to orient the network towards actors with large holdings. The wallet for ADA, Daedalus, will allow for further information about the transaction, to be attached to transactions. This is intended to make the blockchain compatible with existing financial and regulatory systems so that relevant data for those bodies can be collected and transmitted. A hard limit of 45 million ADA has been set. The programming language that has been employed is Haskell, a functional language chosen to aid confirmation of code execution correctness.
Cardano also plans to address the problem of decision-making in a cryptocurrency community, noting, for example, the long-running scaling debate within Bitcoin. In the future, users should have the ability to vote on future hard or soft forks of the cryptocurrency. (Why Cardano, n.d.) Shortly after the release, Cardano issued a ‘roadmap’ – explaining their upcoming goals for the product. An 18-month long development period is now underway with the blockchain in the so-called ‘Byron’ phase. This is the stage where debugging and untangling any emerging issues is done. Next, the company plans to move to the ‘Shelley’ phase – full decentralisation.
Additionally, education is an important part of the project. Hoskinson realized that a large percentage of their new users have little-to-no experience with cryptocurrency and will need clear and simple explanations of the processes that unfold within Cardano. For that reason, Cardano has set up a series of help-desk tours to guide their users.
ADA is available at large cryptocurrency exchanges. At present, transactions made with Cardano are fee free. But there will eventually be nominal fees involved in buying or selling ADA. Cardano plans to issue its users with a debit card attached to their investment account. Users will be able to load the value of their ADA holdings onto the debit card and use it to pay for purchases. The exchange of ADA into fiat currency will be seamless and instantaneous. (Coin Reviews, Dec. 2017)