Cardano’s ADA is the cryptocurrency that drives Cardano’s decentralized blockchain, which facilitates programmable transfers of value in a secure and scalable fashion.
Similar to Ethereum, Cardano is a smart contract platform, with emphasis on security, the team’s principal being to find a balance between regulators and the end users, while maintaining the decentralized and privacy ethos that blockchain technology provides.
Cardano’s ADA has two uses:
- A true cryptocurrency, competing with other fiat currency alternatives, such as Bitcoin.
- To facilitate the creation of smart contracts and decentralized apps on Cardano’s blockchain.
Cardano’s team goal is to deliver banking facilities, with the use of blockchain to the developing world, where the implementation of banking facilities would be too expensive.
Unlike fiat money, there are no physical ADA coins, just balances of ADA that are recorded on Cardano’s blockchain, a decentralized, public ledger.
Cardano was created in 2015, by Input-Output Hong Kong run by Charles Hoskinson, a co-founder of Ethereum. Following an almost 2-year initial coin offering period, Cardano was rolled out in September 2017.
There are only 45 billion ADA Coins, with Cardano miners involved in the verification process by way of a proof-of-stake algorithm that has an additional layer known as the Ouroboros protocol that provides miners with an equal chance of earning rewards.
Miners are referred to as slot leaders, who generate the new blocks. Any ADA coin holder can be a slot leader for a given block. There is no manual verification process, it is automatic, removing the significant amount of energy required in proof-of-work protocols and creating a significantly higher number of transactions per second with lower fees.
Cardano blockchain is the key driver behind ADA, which is a multi-layer blockchain delivering a global payment system and a platform for smart contract and the creation of decentralized applications:
- Cardano Settlement Layer (CSL): Supports ledger transactions and is also known as the accounting layer.
- Cardano Computation Layer (CCL): Supports smart contracts and decentralized applications.
Some distinct differences and characteristics of Cardano’s ADA include:
- There are no physical ADA coins, only virtual.
- Unlike fiat currencies, where governments and central banks are able to print more money, there are a finite number of ADA coins.
- The very nature of Cardano’s decentralized blockchain means that the payment system runs 24-hours a day, with no downtime and has no restrictions on where and to whom ADA coins can be sent.
- Cardano is one of the first blockchains to be built in the highly secure Haskell programming language.