If you’ve dipped your toes in the wide world of cryptocurrency you’ve probably heard the name Cardano (ADA). More than just another crypto, many perceive it as the next generation of cryptocurrency.

This article guide will cover a number of topics relating to Cardano, such as what makes it unique, the ADA token, the Cardano roadmap and Cardano use cases.

What is Cardano?

Cardano began its development in 2015 and launched in 2017, founded by Charles Hoskinson.

You might recognise this name as Hoskinson was one of the co-founders of Ethereum. It’s maybe unsurprising then that these two are industry leaders operating off a proof of stake or PoS consensus mechanism: a protocol that works to solve many existing blockchain issues associated with Proof of Work (PoW) mechanisms. For example, the Bitcoin blockchain use Proof of Work and has come under scrutiny for its energy-intensive mining process.

Cardano is a third-generation, proof of stake blockchain that aims to provide a platform for Dapps development with verifiable smart contracts.

According to their own website, Cardano and its native coin, ADA, are being developed as “a blockchain for changemakers, innovators, and visionaries, with the tools and technologies required to create the possibility for the many, as well as the few, and bring about positive global change.”

As it stands, Cardano is one of the major players in Blockchain. It is listed in the top 10 biggest cryptocurrencies by market cap.

What is an ADA token?

ADA is the digital coin that is native to the Cardano smart contract platform.

It is named after Ada Lovelace, widely recognised as the first computer programmer in the 19th century.

Like other cryptocurrencies, ADA can store value and receive funds.

ADA can also be used as a stake on the Cardano blockchain platform to help verify transactions. 

Anyone who stakes their ADA is rewarded with more ADA cryptocurrency in return, and through this system of staking the blockchains, security is maintained. 

Unlike many other digital currencies, ADA is stored in its own wallet, known as the Daedalus wallet. This may be misleading, however, as daedalus functions as its own blockchain node which users can run their own staking pool within. This way, users support the network while having the opportunity to actively earn cryptocurrency.

The future of ADA will see it help facilitate smart contracts and run applications on the Cardano network. 

So how does Cardano work?

What’s important to note about the platform is that it was the first to be developed through evidence-based methods and peer-reviewed research. The Cardano blockchain was designed by engineering and cryptography academics, built entirely off scientific and mathematical principles.

The phrase “peer review” seems to be becoming synonymous with Proof of Stake models, championed often by Hoskinson himself.

Still, Cardano’s consensus mechanisms and protocols remain unique and according to Cardano means the blockchain is able to overcome a core issue of earlier gen blockchain networks: increased transaction fees as the result of greater transaction volumes.

The core consensus protocol Cardano operates off is called Ouroboros. They promise that this not only offers faster processing speeds, but the potential to improve energy efficiency as processing transactions becomes more streamlined.

So how does this work?

There are two main parts to the Cardano blockchain

The first acts as a unit of account, where ADA holders can send and receive tokens with very minor fees and instantly. This is referred to as the CSL: Cardano Settlement Layer.

The second is the CCL, or Cardano Computational Layer. The CCL is a series of protocols on which the blockchain operates. These protocols are responsible for executing smart contracts and verifying security and compliance. They also offer functionalities ranging from verifying identities and white or blacklisting. 

The Ouroboros protocol was designed specifically for Cardano. It is what allows for securely executing smart contracts on the network, and for securely and efficiently sending and receiving ADA.

How the Ouroboros protocol works

First, the Cardano network selects at random a few nodes, or ‘slot leaders’, for the opportunity to mine new blocks. These nodes could be anyone who has a Daedalus wallet and wishes to stake their ADA tokens. 

The blockchain is then split into slots, otherwise known as ‘epochs’.

The selected slot leaders are then able to mine their own epoch, or partition it and allow other minors to assist who will subsequently be rewarded for their service.

In theory, epochs can be partitioned infinitely. This is what allows for the ability to process mass transactions at a time.

What makes Cardano unique?

The development of Cardano itself is what makes it so unique. Its multilayer architecture distinguishes it from other blockchains, alongside its mathematical security and development by academics

What many see as the biggest upside of Cardano and the Ouroboros protocol is the security around it that lies in its mathematical and peer-reviewed development. Unlike other blockchains, Cardano can actually verify that block validators are selected at random and guarantee ADA stakeholders who participate are compensated fairly. 

You could also argue Charles Hoskinson’s vision and mission for the cryptocurrency in itself is unique. The founder has event Tweeted, “If you see me trying to boost the price of Ada, then I’ve been compromised and sell all your Ada. Cardano will be valuable based upon hard work, real-world use and the utility of the platform. I’m not here to make day traders rich. I’m here to change the world.”

What is the Cardano roadmap?

Cardano is fairly new in the blockchain world, not even five years old. 

Thus, many of the issues of the current blockchain industry were already apparent at the time of Cardano’s inception. The goal, then, was to address these issues.

Cardano’s means of combating these issues include the creation of a more secure voting mechanism for stakers alongside the separation of its computational and accounting layers.

Scalability has long been an issue the blockchain industry has faced, and the Ouroboros protocol offers one means to solve that through infinitely partitioned epochs.

Finally, Cardano promised a provable secure blockchain, less vulnerable to attacks, and guaranteed through mathematic security. 

Of course, none of these changes can happen overnight, so Cardano has laid out a well-defined roadmap towards its goals.

This roadmap consists of five phases. Each phase is named after influential historical figures and referred to as ‘eras’ by Cardano.

Phase 1: Byron or Foundation Era

The first phase was to ensure the network actually ran smoothly and test its functionality, allowing users to buy and sell the ADA currency.

It also saw the release of the Daedulus wallet.

Phase 2: Shelley or Decentralisation Era

The Shelley era sees the shift towards Cardano being run by network participants – working towards Cardano’s goal to become increasingly decentralised. 

Incentive schemes and delegation are also rolled out in this phase.

The goal by the end of the Shelley era was to have Cardano be 50 to 100 times more decentralised than other major blockchains.

Phase 3: Goguen or Smart Contracts Era

The phase Cardano expects to roll out in the second half of 2021.

Goguen will see the implementation of smart contracts across the platform. 

This era will offer the ability to begin building decentralized applications (DApps) on Cardano’s framework. 

Although technically phase three, much of the work on Goguen was done in parallel with Shelley.

Phase 4: Basho or Scaling Era

The fourth phase will aim to implement greater scaling solutions. 

This phase will see optimisations that focus on blockchain performance, mainly around scalability and interoperability. 

Phase 5: Voltaire or Governance Era

The purpose of this era is to create a self-sustaining network.

Voltaire will introduce treasury and voting systems which will give network participants the ability to influence the network’s future development.

What can Cardano actually be used for?

Well, a number of reasons. Whether you opt to invest in Cardano or not, there are several promising use cases for the blockchain.


Cardano could potentially limit the sale of counterfeit goods, through a fortified solution that verifies the authenticity of any goods produced. 


At present, universities and other institutions hold the certifications of their students, who must request these. Cardano could potentially offer a way for students to securely control their own certifications and share them with say, employers, as needed.


Cardano may be able to offer users the ability to store important verification documents on the blockchain.

This would drastically reduce time applying for bank accounts, or other financial endeavours. 

Written by Ted

Written by Ted

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