What Is Cardano?

Last Modified:
June 3, 2024

Cardano is a decentralized blockchain built to be sustainable, scalable, and interoperable with other networks. Founded in 2015 by one of Ethereum’s co-founders, Cardano uses a Proof-of-Stake system to validate transactions and add new blocks to the chain.

The native cryptocurrency of the Cardano blockchain is called ADA, named after the 19th-century mathematician Ada Lovelace. ADA holders can stake their ADA coins to have a chance at being selected to validate blocks and earn block rewards. Meanwhile, those who are not ADA holders who are not validators can earn rewards by delegating their coins to a staking pool to support the validators. They can also use ADA to vote on future decisions regarding the network.

Cardano’s blockchain architecture consists of two separate layers. The Cardano Settlement Layer (CSL) contains the ledger for accounts and balances. Meanwhile, the Cardano Computation Layer (CCL) handles computations for decentralized applications and smart contracts. By having each layer focus on its own job instead of involving the entire network for every transaction, Cardano is able to process transactions quickly and efficiently.

Cardano offers several other benefits. It has low transaction fees, can process around a thousand transactions per second, and is designed to scale without congesting the network. It is also designed for extra security by mathematically verifying smart contracts to reduce errors or vulnerabilities in the code.

What are some use cases of Cardano?

Voting Systems: Cardano allows developers to build secure voting systems through smart contracts and token locking mechanisms.

Identity Management: Digital identity solutions can be built on Cardano to give users control over their personal data and identity credentials.

Supply Chain Accountability: Cardano's metadata system can track goods and products from manufacturing to sale for greater transparency and counterfeit prevention.

Overall, Cardano offers a secure and scalable platform for running decentralized applications, financial services, digital tokens, and more. For developers and enterprises, Cardano is a good option for building innovative blockchain-based services for the future.

Curious about other blockchains? Learn more by reading our short guides.