Cardano/ADA in 5 Points: Everything You Need to Know, From Ethereum Drama to Smart Contracts

Last Updated on August 15, 2021

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Here is everything you need to know about Cardano, the blockchain platform that features native cryptocurrency ADA, in five points:

When Was Cardano/Ada Created?

They are the creatures of Charles Hoskinson, one of the co-founders of Ethereum/Ether. Hoskinson had a falling out with Vitalik Buterin in 2014. Hoskinson wanted to take the project commercial, accepting VC money and developing a more formal governing structure as befits a for-profit concern. Buterin rejected the idea.

A boardroom brawl ensued and Hoskinson was on the outside by mid 2014. 

After a cooling-off period, Hoskinson was hired to run a new blockchain engineering company, IOHK. Fortunately, IOHK was receiving payments from its clients in bitcoin at a time when the value of bitcoin was soaring, so by liquidating IOHK’s stash, the concern had the resources to develop Cardano in 2017.   

He named the platform “Cardano” after the great Italian mathematician and inventor Gerolamo Cardano, who made the first systematic use of negative numbers, and who invented the combination lock. Both are accomplishments pertinent for the development of cryptography and, in time, cryptocurrencies. 

The native currency of the Cardano platform is named Ada, after Ada Lovelace, the only child of poet Lord Byron. Lovelace is widely regarded as the first computer programmer, on the basis of an algorithm she developed for Babbage’s “analytical engine.”  

What are ADA’s Distinctive Features?

Cardano uses what is its Ouroboros Proof-of-Stake protocol, created from the programming language Haskill. Every ADA token holder has a stake in the Cardano blockchain and has the option to delegate ADA stored in a wallet to the Cardano stake pool. They can in that way earn rewards for their help running the network.

Cardano is focused on creating a decentralized stake pool operator (SPO) system, managing connections with peer-to-peer (P2P) governor integration 

That means Cardano has been designed to ease some of the operational difficulties that have appeared during the lifetimes of the other lead tokens. 

The use of Proof-of-Stake, for example, is a way to cut out the expensive and carbon-emitting mining operations associated with other tokens. Ethereum itself has, in effect, since followed its estranged co-founders lead on this point with the London hard fork. An Ouroboros PoS in particular is one designed to scale within an permissionless network.   

ADA has had an impressive first two months this year. She was worth $0.18 as 2021 began. By March 1 that was up to $1.38. In May, she experienced an intense boom, and bust, rising to $2.50, then dropping to $1.07 just a week later. Through June and July, ADA established a trading range between $1.20 and $1.40.

Did Something Negative and Dramatic Happen in May? 

May was a wild ride for the whole crypto industry, made so by Elon Musk on the one hand and the People’s Republic of China on the other. ADA’s up and downs that month have to be seen in that context. 

Does Cardano/ADA Have a White Paper? 

No. And this is a bit unusual in itself. Usually, new platforms and currencies are launched with a white paper explaining to the curious the needs that the founders believe they are fulfilling, and how the innovative features will fulfill them. 

Cardano has never issued one, and this has been credited to its “research first” approach to design, which lets the designing itself do the talking.

What is Alonzo Purple? 

Much of the attention Cardano has received in recent days involves “Alonzo purple.”  Cardano has been upgrading its coding in stages. The first two stages were called “Alonzo White” and “Alonzo Blue.”   

White allowed a closed group of 500 users to execute smart contracts. It also allowed the minting of NFTs.

Blue widened the circle of users, and facilitated a broader range of contracts with a new command line interface.  

Alonzo Purple is the culmination of this development. It makes smart contract support for Cardano — a support structure long seen as the core strength of Ethereum/Ether — fully public. 

Where the platform or the token will go from here is in the lap of the gods.