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What is Cardano and who is this Ada?
Upstream Mar 28, 2022 Definitions
What is Cardano and who is this Ada?
This was written as an ‘entry-level’ guide, and we’ve made some generalisations and simplifications to help us explain how it works. The aim is to help you, a new user, to get a grasp of the technology and the community, without feeling swamped with information that just makes no sense… We will do more advanced follow-ups covering projects built on, and updates to, the Cardano network a bit further down-the-road.
But for now, sit back, and let us explain to you exactly what the Cardano blockchain is. We’ll give you an overview of where it started, where it’s going, who the big players are and who we are and where we fit in.
The first thing that we should ADDRESS is Probably the question: “What is a Blockchain”?
A blockchain is a distributed ledger; simply put, this is a way to record information accurately with users of the blockchain involved in the recording of this data. This removes the requirement for a central entity overseeing it.
There are two elements to that make this setup work:
- As a miner or a node who records the information on the blockchain or,
2. By being a user of the network who pays a fee for the privilege of transacting. Some of this fee is paid to the miner or node operator as an incentive to supply the resources required for the blockchain to work.
A blockchain has digital assets like a ‘coin’ or ‘token’ that’s used for transactions on the network, along with additional items such as NFTs. When these digital assets are transferred between different users, the data of the transaction is recorded and stored by a node or miner and locked into a ‘block’ of information. Once the block is full it is then linked to the previous block, which is in-turn linked to the block before that, creating a block-chain.
Because of the way the nodes/miners interact and ‘prove’ the data as being correct, Blockchain is recognised as being an incredibly accurate and secure way to store information.
There are thousands of different public Blockchains in existence, with differing base-technologies being used in different configurations. This helps vary the final product. Some are faster than others, some are more secure than others and some have cheaper fees than others. Some have been developed for a totally unique purpose where others were purposefully developed to allow a community to build on-top of the Blockchain. This means that as a user, you have a huge and varied choice of networks that you could participate in.
Who are the early players?
Bitcoin was the first. Conceived in 2008 and born in 2009 it was created as a way to transfer ‘value’ from one individual to another, in a trust-less fashion, without the need for a middleman. It was an experiment into the idea of ‘digital-currencies’.
Initially Bitcoin was picked up by the IT ultra-literate, then by the wider tech world. As the technology behind it was discovered by a wider audience and the value of the network increased, corporations and venture capitalists started rolling in.
As interest in Bitcoin developed, so did many new Blockchains; Etherium, Cardano, Polkadot, Litecoin are a few but there are thousands. Some are super-innovative with amazing real-world use cases; some are simply carbon-copies of previous chains with just a fancy new name or a minor tweak to the original code. What we saw at this time was Blockchain tech breaking away from the sole idea of currency transfer and being used for the trust-less, efficient and decentralised transfer & storage of any data.
With the second generation of Blockchains has come ‘Smart Contracts’. Smart Contracts allow for programs to run within the blockchain expanding the uses-cases exponentially; from financial protocols such as automated loan deals to royalty agreements for digital assets. This could be music, art or a digital representation of any other real-life asset. These uses are growing by the day which has resulted in an industry which is as competitive as it is pioneering.
There are other ways that Blockchains can be separated from one another too. It could be the type of consensus mechanism used. Whether this is Proof-of-Work, an energy heavy process where complex mathematical algorithms are solved by miners who compete for the right to create the next block, and receive the reward for doing so. Or, Proof-of-Stake, a mechanism that requires the user to ‘stake’ owned coins to a pool or ‘node’, allowing them to potentially create the next block and receive their reward for doing so too.
Scalability is also a consideration when looking at different Blockchains. This is the ability to grow the network and maintain, or improve, the usability as more and more users interact with the Blockchain and the volume of data increases.
How different Blockchains are recognised.
Blockchains can be recognised by the name of the network, the coin/token name or the ‘ticker’. For example; Bitcoin, (the network’s) coin is called Bitcoin with the ticker BTC. Whereas the Etherium network’s coin is called Ether with the ticker ETH, many people just call it ETH. Cardano’s coin and ticker is ADA, and Polkadot’s coin and ticker are both DOT.
What is Cardano?
Now we have that Blockchain overview out of the way we can delve into the world of Cardano, the network that we at Upstream [UPSTR] are operating a node on. The nodes on Cardano are referred to as Stake-Pools and we are the Upstream Staking Pool.
Cardano is a public blockchain platform founded in 2015 by Ethereum co-founder Charles Hoskinson. It is a decentralised network, using a Proof-of-stake mechanism which is considerably more energy-efficient than the Proof-of-Work Blockchains. It allows peer-to-peer transactions using it’s internal cryptocurrency, ADA, and the code is totally open-source.
Charles Hoskinson was one of the original eight founding members of Ethereum and for a while was the CEO. He left this position and association with the network after a disagreement with Vitalik Buterin, another founder, about the commercial direction that they were going to take. In 2014, Hoskinson and Jeremy Wood, an ex-colleague at Ethereum, created IOHK. IOHK is an engineering and research company that builds cryptocurrencies and blockchains and is the creator of Cardano.
Ouroboros is the proof-of-stake protocol on which the entire Cardano network is built on. This quote from the Cardano.org website describes it very well…
“Ouroboros is the first provably secure proof-of-stake protocol, and the first blockchain protocol to be based on peer-reviewed research. Ouroboros combines unique technology and mathematically verified mechanisms – which, in turn, combine behavioural psychology and economic philosophy – to ensure the security and sustainability of the blockchains that depend upon it. The result is a protocol with proven security guarantees able to facilitate the propagation of global, permissionless networks with minimal energy requirements – of which Cardano is the first.”
Cardano has been built using a research-led approach at its heart. While this does mean that it has taken a lot longer for the network to be able to facilitate things like smart-contracts, than some of its competitors, it has assured that a framework for scalable, efficient and effective future growth has been developed. This was a deliberate attempt to future-proof the network and minimise the disturbance to users as the network and community grows.
There are relationships and agreements in place with a number of private companies, and National Governments which allow the use of the Cardano network in a number of real-life scenarios. From remote internet infrastructure, giving people who have been left behind by the modern world the opportunity to become connected, through to secure and efficient identity registration. There is such huge potential for growth of the network, and the industry as a whole, that we’re really excited about what the future holds.
So who are the key players in Cardano?
We’ve touched on IOHK otherwise known as Input-Output Hong-Kong but we also have the Cardano Foundation and Emurgo. These are the three largest influences within the space, so we’ll have a quick delve into them now;
From the IOHK website:
“We view the world as a series of giant and mostly interconnected social graphs with hundreds of complex systems embedded. Our mission is to perturb the graphs to a more connected, transparent and fair configuration for both the flow of ideas and value. IOHK is a truly global organisation with a remote team of 400+ people across 50+ countries. We have a rich culture with people from all over the world offering different skill sets, different cultural perspectives and at different life stages.”
IOHK is a ‘for-profit’ organisation who are the developers of the Daedalus Wallet, one of the most widely used wallets on Cardano. They also provide ongoing support to the users of the Cardano network, supporting Stake Pool Operators with funding and Project Catalyst, a community support tool looking to supply funding to projects being built on the network.
The Cardano Foundation:
“We are an independent Swiss-based non-profit that oversees and supervises the advancement of Cardano. We are the legal custodians of the Cardano brand and we work with IOHK and EMURGO to ensure that Cardano is being developed and promoted as a secure, transparent, and accountable solution for positive global change. We exist to ensure the positive advancement of the Cardano protocol, while also contributing to the positive advancement of blockchain as a world-changing technology. In everything we do, we enable, empower, facilitate and accelerate progress in the blockchain space.”
The Cardano Foundation is an independent ‘non-profit’ organisation that interacts with different jurisdictions to help introduce and shape blockchain legislation, as well as building the recognised commercial standards needed going forward. They are helping to progress blockchain adoption in the real-world and look at ways the Cardano protocol can be used to better the lives of normal people.
“EMURGO is a global blockchain technology company providing solutions for developers, start-ups, enterprises, and governments. EMURGO develops enterprise-grade applications, builds developer tools, invests in start-ups, and provides blockchain education. EMURGO leverages its expertise in blockchain R&D as well as its global network of related blockchain and industry partners to support ventures globally.”
Emurgo is a private commercial entity responsible for the creation of Yoroi Wallet, an official crypto light wallet developed for Cardano ADA and Ergo ERG users. Yoroi is widely used and available as a mobile app and a browser extension. They also enable blockchain solutions development, and the related services, allowing for the possibility of wider adoption as the space grows.
So where is Cardano headed?
Blockchain is in the beginning stages of mass adoption. For every sports stadium being named after an exchange or coin advertised on the back of your local bus, there are projects being built under the radar which are revolutionising the financial systems and supplying a tool to help improve the social standings and accessibility for individuals. This was widely unimaginable a decade or two ago.
Cardano is currently undergoing a period of growth, which is in-line with its technical roadmap. Scaling is the next big step and the recent updates and community growth have seen the launch of the networks first decentralised exchanges (DEX), NFT platforms and Metaverse projects which are all ready to bloom as 2022 progresses.
We at Upstream are really excited to be involved with the ecosystem as it grows. If it’s something that you don’t know much about, we encourage you to have a peek and see what’s going on.
With so much information available it can be difficult to know where to start. But the trick is to just start and do your own research. There are huge communities on social media, local meetups happening all over and endless YouTubers willing to share their opinions. Use these resources, research areas that spike your interest and get involved in what could quite possibly be one of the biggest technological innovations of our times.
Who are Upstream and where do we fit in?
Upstream are a group of seven friends with a wide variety of skills developed in our careers. Among our team we have; business owners (video production & web development), an interior architect and a product developer, amongst others. Only two of the team have developed ‘tech’ specific skills through their jobs which initially seemed like a draw-back but we realised that our combined skills could be used to good effect regarding education and promotion.
While researching the wider crypto space we discovered Cardano and were immediately drawn in. We were impressed with the social and charitable work being done on the network, the ever growing real world use cases, the research led approach to development and, importantly, the underpinning community.
We knew that Cardano was something that we’d want to be involved with further than just buying some ADA. So in 2021 we set up our Stake Pool, invested all available funds into the pledge and got to work promoting and marketing ourselves. It has been a bumpy road, with obstacles along the way but we have total faith in Cardano and are committed to running our Stake Pool in the best possible way.
Our aim is to provide relatable and easily digestible information to new Cardano users and to those who are interested in learning more about the technology. We know that as an outsider the world of crypto can be a confusing and sometimes intimidating place to find yourself, so we want to position ourselves to assist with the onboarding of new users by supplying entry-level information and guides.
We also have sustainability at heart. This is reflected in the way that we power our staking pool hardware using sustainable energy and the support we provide to local charities who educate children (mainly) in a wide range of issues, all centred around the wider idea of self-sustainability.
Stake with Upstream
With over 3000 active pools we are under no illusion that we are a very small fish, in a very large pond (or stream.. ?). As with any Stake Pool we need to increase the ADA delegated to us to grow and become an efficient and effective member of the Cardano network.
This is where you come in, if you have invested in ADA, or are considering investing in it, we ask you to consider staking that ADA to our pool [UPSTR]. This will help us grow, it will enable us to support the Cardano network and our chosen charities in the best possible way.