What is Cardano and ADA
SUMMARY KEYWORDS
crypto, blockchain, ada, validators, network, platform, episode, transactions, cryptocurrencies, ethereum, rewards, decentralized, miners, stake, built, consensus mechanism, token, proof, layer, smart contracts
00:00
Welcome to the New to Crypto Podcast designed to guide you through the crypto landscape with pinpoint accuracy created for the new and intermediate crypto investor. Join your host Crypto Travels Michael as he takes you through the different facets of getting started and succeeding in your crypto journey. New to crypto podcast brings you new episodes daily Monday through Friday with surprise bonus episodes sometimes on the weekend. Let me ask you, are you new to crypto and don’t know where to start? Are you more experienced too but have questions? Then you’re in the right place. This podcast is designed for you coming at you from the Trading Center and the Lifestyle Dezign Studio. Here’s your host Crypto Travels Michael.
00:53
Welcome to today’s show where we’re going to jump into an exciting blockchain in the crypto world. This is one of the most popular coins on the planet and blockchains this is also one of the largest by market cap cryptocurrencies. Without further ado, let’s jump into today’s episode.
01:15
What is Cardano and ADA? Cardano is a Proof of Stake blockchain platform. It combines pioneering technologies to provide security and sustainability to decentralize applications and systems. It has a leading team of engineers and it’s also as I mentioned, one of the largest cryptocurrencies by market cap Cardano was launched in September of 2017 by one of the co-founders of Ethereum. Charles Hoskinson.
01:46
Cardano aims to be a third generation blockchain or blockchain 3.0 building on top of the technology that was pioneered by Bitcoin, which is considered first generation and Ethereum, which is considered second generation. So Cardano’s goal is to be flexible, sustainable, energy efficient and scalable platform for running smart contracts. This allows for a development of many different DAPPS or if you remember in previous episodes, DAPPS are decentralized finance apps. New cryptocurrencies can be built on top of the blockchain, by other organizations or by anyone who wants to create them.
02:30
Also games and more can be built on Cardano. The Cardano blockchain’s. Cryptocurrency is called ADA, ADA can be used as a store of value as well as payment for gas or transaction fees on the cardano network. ADA can also be used for staking more about what staking is in the future in a future episode.
02:51
Cardano has a goal to be the most environmentally sustainable blockchain platform. Yes, that’s a mouthful. The way it’s spelled will be on our website for today’s episode. To understand what Proof of Stake is,
03:06
Let’s first cover what Proof of Work is. Decentralized crypto networks need to make sure that no one spends the same crypto coin twice without a central authority in the middle. To accomplish this, they use a consensus mechanism. The original consensus mechanism is called Proof of Work and is used by Bitcoin. Proof of work requires a huge amount of processing power, which is contributed by virtual miners around the world.
03:37
And they are competing to be the first to solve a time consuming math puzzle. The winner gets to update the blockchain with the latest verified transactions and is rewarded with a pre-determined amount of crypto. So what is proof of stake rather than using a network of miners racing to solve a puzzle Proof of Stake uses a network of invested participants called validators.
04:10
Instead of contributing processing power to secure the network and verify transactions as miners do, validators stake their own ADA, the network selects a winner based on the amount of ADA each validator has in the pool and the length of time it rewards the most invested participants. Once the winner has validated the latest block of transactions. Other validators can check and confirm that the block is accurate. When a threshold number of confirmations has been made.
04:45
The network updates the blockchain all participating validators receive a reward in ADA, which is distributed by the network in proportion to each validators stake
04:59
So the Cardano blockchain is also divided into two separate layers, the Cardano settlement layer, known as CSL, and the cardano computing layer known as CSL. The CSL contains the ledger of accounts and balances is where the transactions are validated for the consensus mechanism, this CCL layer is where all of the computations for apps running on the blockchain are executed via the operation of smart contracts.
05:35
So the idea of splitting the blockchain into two layers is to help the cardano network to process as many as a million transactions a second, that’s right, a million transactions a second. So they have built their entire platform in the anticipation that there will be a tremendous amount of volume of transactions in the future. So they’re solving a problem before it happens. So let’s break down and unpack a little bit more about what exactly ADA is. ADA is the native cryptocurrency on the cardano blockchain on the cardinal platform.
06:18
So where did the name ADA come from? Well, they named the coin or the token Ada after Ada Lovelace. And this is a 19th century mathematician who is often referred to as the world’s first computer programmer.
06:35
So ADA tokens, they feel the cardano platform, a lot like Eth tokens do on the Ethereum platform. They’re used to pay transaction fees and our state by validators and delegators, who want to help maintain security and stability of the network in exchange for earning rewards. In the future. ADA will also be used for governance as a governance token, which will allow holders to vote on changes and upgrades to the Cardano platform. Cardano was built by the people by a community for the people.
07:17
So Cardano has spent years building everything on their platform and making sure it is built well. I really liked the Cardano blockchain and ADA shares updates regularly on his YouTube channel, which I’m sharing with you on our website for today’s episode. All right, so this concludes today’s episode. Join us tomorrow as we dive into more. Until then, make it a great day.
07:52
Thanks for tuning in to New to Crypto Podcast. If you liked the episode, be sure to follow and subscribe. You can listen to every episode on all major platforms and have an interest in being on the show or one advertising reach out at newtocrypto.io. Head over to our site newtocrypto.io to access the resources mentioned in each episode. Until next time, remember to navigate the crypto landscape with pinpoint accuracy
