Cardano is designed to solve scalability, interoperability, and sustainability issues associated with its Bitcoin, Ethereum, and other counterparts. Despite having a significantly lower market cap than Bitcoin and Ethereum, Cardano is catching up to the competition with safer, faster, and more energy-efficient technology.
Find out more about how Cardano works, including a guide to buying it and exchanges where it can be traded in Canada.
What is Cardano?
Launched in 2017, Cardano is primarily designed to develop a fairer, securer, and more transparent crypto infrastructure through redistribution of power to its coin-holders. With an ability to process more than 250 transactions per second (TPS), Cardano aims to eliminate the slow transaction times and infrastructural burdens like energy consumption that have come to plague other cryptocurrencies.
Developed by Charles Hoskinson, a co-founder of Ethereum, Cardano is a third-generation blockchain platform that allows peer-to-peer transactions with its internal digital currency, ADA. As a decentralized platform, Cardano doesn’t require a third party to facilitate the exchange. It is a multilayer network with the Cardano Settlement Layer handling ADA and the Cordano Computational Layer handling smart contracts i.e. trading, investing, borrowing, and lending.
Unlike Bitcoin and Ethereum, Cardano uses a Proof of Stake (PoS) protocol called Ouroboros. This allows users to validate transactions and append to the blockchain in proportion to the number of coins they hold, thereby preventing malicious users from taking control of validation or mounting an attack. It is a safer and more energy-efficient alternative to the consensus mechanism — known as proof of work (Pow) — employed by Bitcoin, Ethereum, and many other cryptocurrencies.