At the beginning of October 2017, a little-known blockchain platform called Cardano made a surprising entry into the cryptocurrency market. Over the first week from launch Cardano experienced dramatic growth, skyrocketing in value and achieving a market cap of over $600 million.
In early January this year the value of ADA — the native currency of the Cardano platform — reached an all-time high of $1.32, peaking at a market cap of over $33 billion. 2018’s Q1 cryptocurrency market stagnation saw Cardano drop back down to a market cap of under $600 million, but ADA is currently experiencing a strong resurgence in value, rapidly approaching the $10 billion barrier and retaining a strong position in the top 10 most valuable cryptocurrencies.
Why is Cardano presenting such a bullish profile, though? Proponents of the platform highlight Cardano’s science-driven development philosophy, its unique consensus method, and the manner in which it addresses the issues that plague other high market cap blockchain networks such as Ethereum and Bitcoin.
Why is Cardano Breaking Out?
Cardano’s recent breakout is largely attributed to the upcoming Cardano meeting in London, which is set to occur on the 28th of February. At the event the Cardano team will be presenting a breakdown of the current state of Cardano development, led by technology project manager Bruce Milligan.
We’re excited to announce our February London meetup! It’s happening on Wednesday, Feb. 28 at 93 Feet East, Shoreditch. We look forward to an evening of Cardano community networking. RSVP here: https://t.co/SENluzHfS5
— Cardano Foundation (@CardanoStiftung) February 9, 2018
With Cardano’s “Shelley” implementation set to finalize by Q2 this year the bootstrap era of the network will end, opening staking to all ADA holders and realizing the launch of Cardano as a fully decentralized independent cryptocurrency.
As Cardano is a relatively new entrant into the cryptocurrency market positive updates on the state of roadmap development will likely catalyze an echo effect on audiences that are following its development, further concreting its current bullish run.
What Makes Cardano Different?
Cardano is a smart contract focused blockchain network with a number of key differentiators that make it stand out from other platforms. The most notable aspect of Cardano is the empirical, scientific approach the team has taken in the development of the project. As the first blockchain project “developed out of a scientific philosophy”, Cardano is driven by peer-reviewed academic research through a collaborative scientific process.
This systematic methodology has resulted in the creation of a blockchain network that runs on a wholly unique consensus method. Blockchain networks like Bitcoin and Ethereum currently use a method called Proof of Work to gain consensus on network state, which requires nodes to invest large amounts of processing power in order to build the next block and thus claim the block reward.
Cardano’s “Ouroboros” Proof of Stake mechanism, however, randomly selects nodes for block creation based on the stake — or amount of ADA — that they currently hold in the network. The advantages of the Ouroboros consensus mechanism are numerous, including faster transaction speeds, increased scalability, and enhanced network security.
The consensus method used by Cardano isn’t the only advantage it holds over other blockchain networks — Cardano is smart contract driven, and uses an intuitive programming language called Haskell that allows developers to create code with a reliable, mathematical approach. Smart contracts are defined on the Cardano blockchain via a functional programming language called Plutus that streamlines smart contract creation and execution.
Why Does Cardano Matter?
Cardano solves many of the issues presented by current blockchain networks, notably transaction speed. For widespread consumer cryptocurrency adoption to take place a blockchain network must be able to sustain high transaction processing throughput. The Bitcoin blockchain, for example, is capable of only 6-7 transactions per second, whereas Cardano’s Ouroboros consensus mechanism has been clocked at 257 transactions per second.
Cardano also addresses the issue of interoperability — the blockchain ecosystem currently consists of different blockchain networks that are unable to communicate or interact with one another. Cardano implements an innovative approach that uses “KMZ sidechains” to facilitate cryptocurrency interoperability.
The Cardano platform is also heavily focused on long-term sustainability, allowing for the implementation of new features through a soft fork system. A treasury program governed by ADA holders also delivers funding for the sustainable development of new features, allowing ADA holders to propose, discuss, and vote on the development and implementation of new projects in a democratic manner.
Overall, the Carando team appear to be developing a blockchain network that delivers far more than simple use cases such as currency. Cardano lead developer Charles Hoskison has stated that ADA is positioned to create a new foundation for the international financial system of the future, and aims to “build a system that can have 3 billion users.”
Discuss Cardano and everything cryptocurrency in our Telegram Chat.