Cardano is a technology platform that uses the ADA cryptocurrency as its native asset. Cardano operates on a Proof-of-Stake consensus protocol, named Ouroboros, which is the first provenly secure consensus protocol of it's kind. It was created by blockchain development firm Input Output Hong Kong (IOHK) and led by Charles Hoskinson, former co-founder of BitShares and Ethereum. Cardano aims to run smart contracts, decentralized applications, side chains, multi-party computation and metadata.
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Ouroboros: Coins are mined and decisions are made via a proof-of-stake algorithm called Ouroboros. Instead of a proof of work system that uses electricity and GPU power; consensus is generated by coin-holder vote. In this protocol, new blocks are generated through a random selection process, which weights a miner's chance of receiving the block reward by the amount of stake held. Ouroboros and POS saves a significant part of the Energy required by work-based systems, and allows a resource-efficient and cost-saving blockchain creation.
CSL & CCL: The ADA cryptocurrency operates on its own blockchain called the Cardano Settlement Layer (CSL). The CSL is an accounting layer and supports ledger transactions. A second layer called the Cardano Computation Layer (CCL) will support smart contracts. This multi-layer architecture allows for easier updates via soft forks than Ethereum does; in Ethereum these two layers are intertwined.
There are three organisations that are contributing to the development of Cardano.
- The first is the Cardano Foundation, an independent standards body based in Switzerland with core responsibilities to support the community of Cardano users and to work with authorities on regulatory and commercial matters.
- The second entity working on Cardano is IOHK, a leading cryptocurrency research and development company, which holds the contract to develop the platform until 2020.
- The final business partner is Emurgo, which invests in start-ups and assists commercial ventures to build on the Cardano blockchain.
The launch of Cardano marks almost two years of research and over a year of development. IOHK (Input Output) has designed and built a cryptocurrency technology stack of completely new design with 100% new code. The technology is now in the Byron phase, also known as the bootstrap era.
Following the stabilization and refinement of Byron, IOHK will make substantial improvements to core components. The main purpose of this phase of development is to make Cardano SL completely decentralized to live in a mostly centralized world. Much of the work will deal with the networking layer and making Ouroboros more robust. In parallel, standard cryptocurrency features such as multi-signature addresses and light clients will be added. Other non-standard features will be implemented, such as quantum resistant signatures.
Goguen will see the integration of smart contracts
Basho is centered around performance improvements
Finally, in Voltaire, IOHK will add a treasury system and governance