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What Is Cardano? | The Ultimate Beginner’s Guide

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Cardano

Cardano is a smart contract platform that seeks to deliver more advanced features than any blockchain protocol before it. Developed using a strict, academically sound philosophy, Cardano is looking to set new security standards for the rest of the crypto industry.

In this beginner’s guide to Cardano, we’ll cover:

While Cardano has occasionally been referred to as the “Ethereum of Japan”, the team behind it considers the project to be a third generation blockchain — building on what existing blockchains have done right, and implementing novel technology where improvements are needed.

The Cardano blockchain was publicly launched on September 29th, 2017, with the platform’s native token, “ADA”, being made available for trading on October 1st. The team behind Cardano is made up of three entities:

Cardano Foundation: The Cardano Foundation is a Switzerland-based non-profit which aims to standardize, protect, and promote the Cardano protocol around the world. Most recently, the Cardano Foundation has connected with Ledger, the French hardware wallet manufacturing firm, to integrate ADA compatibility.

IOHK: Input Output Hong Kong (IOHK) is an engineering company that builds cryptocurrencies and blockchains for academic institutions, government entities, and corporations. Founded in 2015 by Ethereum co-founder Charles Hoskinson and Ethereum alum Jeremy Wood, IOHK describes itself as, “a decentralized company that loves small, innovative teams forming and executing ideas that cause cascading disruption”. IOHK is contracted to design, build, and maintain the Cardano platform through 2020.

Emurgo: Emurgo is a Japanese company formed to integrate, develop, and support businesses that want to utilize Cardano’s decentralized blockchain. It was Emurgo’s decision to hire IOHK and many argue that Emurgo looks to be the ConsenSys to Cardano’s Ethereum.

Ultimately, Cardano aims to become a better, more secure Ethereum. While both platforms seek to provide a strong foundation for developers to build smart contracts and decentralized applications, they differ in how they plan to get there. Cardano is the first blockchain platform to evolve out of a scientific philosophy and a research-first driven approach.

Also Read Our Cardano vs Ethereum Comparison.

Charles Hoskinson and IOHK have adopted a unique development philosophy that aims to raise the standards of due diligence we expect from blockchain developers. With this goal in mind, Cardano was built using a rigorous process that ensures the safety and security of its code by means of formal verification, first principles, and peer reviews.

Here’s what you need to know about Cardano’s scientific philosophy:

  • Cardano is written in the Haskell programming language, which enables the formal verification of code. To formally verify code is to make a claim with mathematical certainty on what functions a program is capable, or incapable of performing.
  • First principles thinking is the act of boiling a process down to the fundamental parts that you know are true and building up from there.
  • A peer review is defined as an evaluation of scientific, academic, or professional work by others working in the same field.

This approach is completely new to cryptocurrency, which is surprising given the billions of dollars at stake in the industry. An impassioned Hoskinson reiterated this point in a recent interview:
Charles Hoskinson Cardano Founder

“If they’re going to be worth this much money, shouldn’t we at least demand that somebody spends a few months of fucking time to go to the world’s top people and get those people to give it a little checkmark…that’s just common sense.”

The average person reading a white paper often has no idea how to interpret technical specifications. Therefore, there is an implicit trust that these technical elements are valid. But what if they aren’t?

Peer review is a time-tested method of ensuring a particular theory is sound. According to Hoskinson there are bright people who don’t have adequate domain experience within crypto who are writing papers that “kind of, sort of” work, but their security holes won’t be discovered for years because nobody is actively trying to tear them apart.

IOHK holds Cardano to a higher standard, because they feel that they have a moral obligation to ensure the platform’s quality and safety. The Cardano team hopes that this kind of rigorous development philosophy eventually becomes a standard in the cryptocurrency industry.  

Cardano is composed of two primary parts: a settlement layer to handle cryptocurrency transactions, and a computing layer, which handles computation for smart contracts and decentralized applications (dApps).

The separation of payment and computation is a design choice intended to make future upgrades easier. This way the Cardano team is able to make changes to the settlement layer, such as tweaking the consensus algorithm, without affecting the computing layer. End users are unlikely to notice the behind-the-scenes improvements earned by this modular design.  

Cardano regards itself as third generation blockchain. The reasoning goes something like this:

  • Bitcoin is a first generation blockchain. Bitcoin figured out how to transfer value from one person to another without requiring a third party in the transaction, but isn’t well suited for smart contracts.
  • Ethereum is a second generation blockchain. Ethereum brought programmable transactions (smart contracts) to the blockchain, but struggles with scale and governance, among other things.
  • Cardano claims to be a third generation blockchain; citing scalability, interoperability, and sustainability as its major technological improvements lacking in earlier blockchains.

Cardano plans to realize its potential as a third generation blockchain by achieving consensus in a modular, future-forward way, handling large amounts of bandwidth efficiently, and coming up with clever ways of managing data without compromising security.

Achieving Consensus with Ouroboros

Cardano uses a modified proof-of-stake (PoS) consensus protocol called Ouroboros. Proof-of-stake algorithms choose who will make the next block randomly, with each person having a chance that is proportional to their total ownership (stake) of the native token. According to Charles Hoskinson, Ouroboros is among the most efficient consensus protocols in the crypto space. Here’s how it works:

Time in Cardano is divided into epochs (pronounced “epics”), which are further divided into slots. Slots are short time periods of around 20 seconds, and each slot has a designated leader. Slot leaders can create no more than a single block in their assigned slot. Transaction fees in a given epoch are pooled together and distributed to the slot leaders.  

Slot leaders serve the same purpose in Cardano as miners in Bitcoin, but without the extreme computational demands required in a proof-of-work system. Cardano claims to offer a similar security guarantee as Bitcoin’s proof-of-work despite being considerably cheaper to run.

How are slot leaders chosen?

Network participants must hold a minimum threshold stake in ADA. All qualifying participants are considered electors for the next epoch. Slot leader elections are performed via a distributed method of random number generation. The final output is a unique identifier for an existing coin and the owner of this lucky coin becomes a slot leader!  

Cardano finds itself relatively early in its development cycle. According to the project roadmap, Cardano is currently working on completing “Byron”, the bootstrap phase, in which they are actively making improvements to code, debugging, and working on the ‘Daedalus’ wallet. There are a lot of exciting features the IOHK team is working on, but it’s likely to be another year or two before we see Cardano operating at full capacity.

One of the coolest upcoming technologies being developed for Cardano revolves around the concept of interoperability. Cardano is of the belief that there won’t be one token to rule them all; instead, we will likely use multiple public blockchains for different purposes. If this is true, and the future presents a world in which Cardano, Bitcoin, and Ethereum can co-exist with legacy banking platforms like SWIFT and ACH, we’ll want some way to communicate between different blockchains and legacy networks.

Third generation blockchains like Cardano will have the capability to understand and watch other blockchains, while also enabling metadata and compliance framework optionality for legacy systems in a privacy-conscious way. This approach won’t permit custodianship of personally identifiable data.  

Cardano also plans to work on a solution for the sustainability and governance of decentralized protocols. The development of cryptocurrencies today is funded mostly through initial coin offerings (ICOs). ICOs quickly generate huge lump sums which must be strategically allocated, leaving vulnerable investors hopeful that the ICO’s team does the right thing with their newfound riches. Unlucky cryptocurrency investors have learned that people don’t always do the right thing.

Cardano hopes to address this problem with a treasury system that is funded by inflation. In short, the idea is to print money into a decentralized bank account. The funds from this account will then be spent through an unspecified democratic process that will allow network users to vote on which proposals receive funding. IOHK believes that finding solutions to sustainability problems like this is essential for the overall health of a decentralized protocol.

‘ADA’ is the cryptocurrency native to the Cardano platform and is named after the world’s first computer programmer, Ada Lovelace. In the Cardano network’s current state, ADA is only used to send and receive value. The process for sending and receiving ADA works just like Bitcoin, Ethereum, and most other cryptocurrencies.  In the future, ADA will also be used for staking, smart contracts, and the treasury.

ADA can be purchased on a variety of cryptocurrency exchanges, most notably Binance and Bittrex. You can find our step-by-step guide on how to buy Cardano (ADA) here.

The only wallet that currently supports ADA is called Daedalus. Daedalus is a highly secure wallet for the ADA cryptocurrency and was developed by the IOHK team. Although Daedalus is currently the only option, Ledger appears to be working on supporting ADA in the near future.

Daedalus ADA Wallet

Just like Cardano, the Daedalus wallet has a promising roadmap that includes features like supporting non-ADA cryptocurrencies, custom themes and plugins, and a mobile wallet for Android and iOS. You can find more information regarding the Daedalus wallet at it’s official website here.

Cardano is an innovative third-generation blockchain platform that has been carefully constructed from the ground up in a provably secure manner. The Cardano team, driven by IOHK, is determined to outclass its competition by holding its product to scientific standards we haven’t yet seen in the cryptocurrency industry.

The Cardano project is far from finished. ADA currently holds the sixth largest market cap at the time of writing, placing it above plenty of complete, and nearly complete projects. It’s no secret that market cap isn’t a perfect metric, but it’s worth noting in this instance as it indicates there is a lot of enthusiasm about the platform.

Cardano has a long list of exciting developments expected to be realized over the next couple of years. Whether it’s the aforementioned interoperability and governance features, or the adoption of a “K”-based virtual machine to allow non-Haskell developers to participate, the Cardano project is setting itself up to be a potential leader in the cryptocurrency industry.

The post What Is Cardano? | The Ultimate Beginner’s Guide appeared first on UNHASHED.

Source: https://unhashed.com/cryptocurrency-coin-guides/what-is-cardano/

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This Investor Group is Causing Bitcoin to Decouple from Stocks

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Bitcoin is finally breaking its correlation with the stock market, which has been persisting despite its recent uptrend’s strength.

An example of this correlation’s lingering effects can be seen while looking towards yesterday’s selloff, with the rejection at $13,800 coming about almost instantly after investors saw a sharp decline in stock futures.

Although yesterday was a somewhat rough day for Bitcoin, it quickly shook off the weakness created by the recent turbulence within the stock market and has since been rally higher.

One on-chain analyst is now noting that the benchmark cryptocurrency is now starting to flash some of its first signs of posting a macro decoupling from the stock market.

This is being driven by one group of investors in particular, as he notes that new retail entrants into the market have been backing this recent uptrend.

The confluence of institutions and corporations buying Bitcoin, as well as retail investors, signals that serious upside could be imminent in the near-term.

Bitcoin Rallies Back Towards Key Resistance 

Bitcoin is in the process of surging back up towards its key $13,800 resistance level that sparked the recent selloff that sent it reeling down by $1,000.

At the time of writing, Bitcoin is trading up just over 2% at its current price of $13,500. This marks a massive surge from its recent lows of $12,800 set at the bottom of yesterday’s selloff.

$13,800 is a region of historical significance, as this is where the 2019 rally in late-June peaked before BTC posted a “blow-off top” and began plunging lower.

If this level is broken, then the crypto could see a sharp rise that sends it towards its all-time high.

On-Chain Analyst: BTC Flashing First Signs of Decoupling from Stock Market 

Willy Woo – a respected on-chain analyst – explained in a recent tweet that Bitcoin and the stock market are now showing their first signs of macro de-coupling behavior.

He notes that this is being driven by an influx of new retail investors providing serious price support.

“First signs of de-coupling behaviour spotted between BTC and stocks. Buying from an influx of new users provides price support preventing speculators from trading the correlation downwards. NVTP approximates a valuation for BTC with organic investor velocity on the blockchain.”

Bitcoin

Image Courtesy of Willy Woo.

How Bitcoin responds to another potentially imminent rest of $13,800 should provide some serious insights into its mid-term outlook.

Featured image from Unsplash.
BTCUSD pricing data from TradingView.

Source: https://www.newsbtc.com/news/bitcoin/this-investor-group-is-causing-bitcoin-to-decouple-from-stocks/

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Fidelity’s Crypto Subsidiary Targets Asian Investors To Buy Bitcoin

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  • Fidelity Digital Asset Services (FDAS) has partnered with Stack Funds to enable Asian investors to purchase and store cryptocurrency assets more freely and securely. 
  • Based in Singapore, Stack Funds is a regulated fund manager focusing on Bitcoin and other digital assets.
  • According to the Bloomberg report, Stack Funds will make Fidelity’s secure custody services available to its clients, primarily based in Asia. The company outlined that the Asian market has been continuously growing in demand towards the cryptocurrency industry, especially from high-net-worth investors and family offices.
  • Stack further explained that all assets under its management will be audited monthly. The firm will provide insurance coverage, weekly contributions, and redemptions to enhance capital security.  
  • Stack’s co-founder, Michael Collett, said that Fidelity’s involvement will enable its company to attract even more investors from the region. 
  • On the other hand, Christopher Tyrer, head of Fidelity Digital Assets Europe, believes that “there’s a critical need for platforms which have a deep understanding of what local and regional investors are looking for.” However, he admitted that the digital asset space has “historically lacked” such platforms. 
  • After its success in the US, Fidelity Digital Assets expanded its cryptocurrency services to Europe last year. The company aims at entering the Asian market as well now with the Stack Funds partnership. 
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Source: https://cryptopotato.com/fidelitys-crypto-subsidiary-targets-asian-investors-to-buy-bitcoin/

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Hacked? Crypto Lending Platform Cred Suspends Deposits And Withdrawals While Cooperating With Authorities

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The popular cryptocurrency lending service Cred has announced that it has temporarily suspended all funds inflows and outflows. Without disclosing many details, the platform said it’s cooperating with law enforcement authorities to investigate an incident.

Cred Suspends Deposits And Withdrawals

The United States-based crypto lending platform, which recently announced joining Visa’s fast track program, updated its customers on Twitter regarding the latest troubling developments with a brief message.

“Unfortunately, we are unable to comment further at this time, but we will undertake to provide an update within the next two weeks. During this period, all inflows and outflows of funds will be suspended.” – read the statement.

Staying true to its fashion, the cryptocurrency community lashed out at Cred and its lack of details about what’s going on. This reaction prompted the lending protocol to comment once again. Firstly, Cred apologized for the concerns and inconveniences it has caused while it’s assessing the “business impact connected with a recent fraudulent incident.”

Furthermore, the post explained that Cred is currently cooperating with law enforcement authorities. However, it provided some reassurances claiming that “no client personal data or account information was compromised.”

It’s worth noting that Cred’s website reads that the platform works with “trusted security and insurance providers Fireblocks and Lockton to ensure that our customers’ digital assets have enterprise-grade security.” Nevertheless, several community members have questioned the state of their holdings on the platform, as they weren’t satisfied with Cred’s brief updates.

A Dissolved Partnership Saw This Coming?

Although it’s still unconfirmed if the so-called “incident” is indeed a hack, it seems that the issues have been transpiring for a while now. Days before Cred suspended deposits and withdrawals, one of its partners ended its relationship with the lending protocol.

The cryptocurrency wallet and trading platform, Uphold, announced on Sunday that users could no longer link their Uphold wallets to the third-party crypto lending provider Cred.

At the time of this writing, neither Uphold nor Cred have disclosed why their partnership agreement ended.

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Source: https://cryptopotato.com/hacked-crypto-lending-platform-cred-suspends-deposits-and-withdrawals-while-cooperating-with-authorities/

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