Cardano is a decentralized public blockchain and cryptocurrency project that is focused on providing a secure and scalable platform for the development and execution of smart contracts and decentralized applications (DApps). Cardano is the first blockchain platform to be built on the Haskell programming language, and it is designed to be a more secure and scalable alternative to existing blockchain platforms.
Cardano was developed by Input Output Hong Kong (IOHK), a blockchain research and development company, and it is led by Charles Hoskinson, co-founder of Ethereum. Cardano uses a proof-of-stake (PoS) consensus algorithm called Ouroboros, which allows users to participate in the network and validate transactions by staking their tokens.
Cardano has a number of features that set it apart from other blockchain platforms, including a multi-layer architecture that separates the computation layer from the settlement layer, a governance model that allows for the decentralized decision-making process, and a treasury system that funds the development of the platform through a portion of transaction fees.
Cardano is being developed in a series of phases, with the current mainnet, called "Shelley," being the second phase. The final phase, called "Goguen," will focus on enabling the development of smart contracts and DApps on the Cardano platform.
How does Cardano work?
In a proof-of-stake system, instead of mining new blocks through the use of powerful computer hardware, network participants validate transactions and create new blocks by staking their own cryptocurrency holdings. This involves committing a certain amount of cryptocurrency as collateral in exchange for the right to participate in the consensus process.
When a network participant wants to create a new block, they first need to create a "block proposal," which includes a list of transactions that they want to include in the block. They then broadcast this block proposal to the rest of the network.
Other network participants, called "validators," can then choose to "vote" on the block proposal by staking a certain amount of cryptocurrency on it. If a block proposal receives enough votes, it becomes part of the blockchain and the validator who proposed it is rewarded with a portion of the transaction fees and a new block is added to the chain.
Cardano also uses a system called "Ouroboros" to randomly select the validators who get to propose new blocks. This helps to ensure that the selection process is fair and decentralized.
In addition to its proof-of-stake consensus algorithm, Cardano is also designed to be highly modular, with a layered architecture that separates the core blockchain logic from the application layer. This allows for the easy addition of new features and upgrades without disrupting the overall network.