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Understanding Cardano

Cardano was developed in 2015 and launched in 2017, Cardano is very young at the moment, but their way of working is very different from the other existing cryptocurrencies. It’s somewhat different than other cryptocurrency projects because it’s built around peer-reviewed papers. Cardano claims to be the third generation of cryptocurrencies, the first generation being Bitcoin and the second being Ethereum.

Cardano aims to solve three pain points of the current generation: Interoperability, Scalability, and Sustainability. Bitcoin uses a proof-of-work algorithm and lets everyone mine new blocks; this process is slow and wastes a lot of computing power. In the case of Cardano, not everyone is allowed to mine new blocks; instead, the network elects a few nodes to mine the blocks. These are called slot leaders.

The Cardano network aims to be the “internet of blockchains” or, in other words, a blockchain that understands what happens in other blockchains, and this would mean seamlessly moving assets across multiple chains. Cardano also allows people to attach metadata to a transaction if they wish to; this comes as a good gesture towards the banking system, which usually doesn’t accept the concept of cryptocurrencies.

Cardano has a unique system to maintain its sustainability by keeping its very own unique wallet called treasury which isn’t controlled by anyone. It’s a smart contract that releases a part of the funds to the developers who wish to improve the Cardano protocol.