Cardano is a blockchain. It’s the most significant competitor to the Ethereum blockchain and ultimately Bitcoin.

Here we explain what Cardano is and what blockchain is, simply.

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What is Cardano?

Cardano is a blockchain like Bitcoin is a Blockchain. But newer, smarter and with much bigger aims.
(We get into what a blockchain actually is a bit later on this page).

Cardano has been created to change the world, for the better, for ordinary people. Through fairness, openness and transparency.

It’s a top 10 blockchain, respected by many, on its way to becoming number one. Not through big claims or glitzy showmanship. But through slow and steady hard work, building it the right way, from the ground up, using the very latest research and technologies.

You may have heard bad things about blockchains and “Web3” (another name used to refer to blockchains). A lot of it is fair – but it doesn’t apply to all blockchains. Cardano is one of the good ones. Want to know why you should care? Read on…

This is an independent community website, we are not affiliated with the Cardano Foundation.

What is Cardano?

Cardano is a blockchain like Bitcoin is a Blockchain. But newer, smarter and with much bigger aims.
(We get into what a blockchain actually is a bit later on this page).

Cardano has been created to change the world, for the better, for ordinary people. Through fairness, openness and transparency.

It’s a top 10 blockchain, respected by many, on its way to becoming number one. Not through big claims or glitzy showmanship. But through slow and steady hard work, building it the right way, from the ground up, using the very latest research and technologies.

You may have heard bad things about blockchains and “Web3” (another name used to refer to blockchains). A lot of it is fair – but it doesn’t apply to all blockchains. Cardano is one of the good ones. Want to know why you should care? Read on…

This is an independent community website, we are not affiliated with the Cardano Foundation.

"Blockchains are bad for the environment"

When you come across commentators stating this, they aren’t wrong… but it’s not all blockchains.

Cardano is one of the newer generation eco-friendly “Proof of Stake” blockchains. In fact, it pioneered the technology and set the standard for everyone else to follow. It has proved that the harmful environmental impact of older “Proof of Work” blockchain technology can be replaced and instead be green.

If you’d like to find out why, things get a bit more complex, so we answer this question on a separate page. There’s a link to it at the end of this page, or if you’d like to view it now you can click here

"Web3 crapto scammer nonsense"

There’s lots of scam artists out there, lots of bad actors in the blockchain space, and plenty of rubbish blockchains that shouldn’t really exist.

Cardano isn’t one of them. It’s a blockchain created with a mission to help the 1.7 billion people in the world who are unbanked. Who don’t have access to basic, fair financial services that people in the developed world take for granted.

That’s why it was created, but it has become far more than that. It offers the technology to become the financial operating system for the world – if we want it. A fair system open to all, without corporations and gatekeepers in control, a system that gives everyone equal power, from the richest to the poorest. 

It also offers tantalising tools that can allow us to conduct government, voting, registration, traceability – many of the important bits of our societies – transparently, fairly and with complete trust.

It doesn’t seek to force any of this on the world. It is simply a set of tools. There if we want them. There for the new generation of pioneers and creators to choose and utilise, to create better.

Is Cardano a good investment?

Ahhhh, you want to know the future and what will make you rich?!

If you’re here because you’re wondering if Cardano is something you should buy into, well that’s just fine. The answer, like anything that involves risk, will need you to do a bit of research though, to answer the question for yourself based on your own beliefs and attitudes to risk. I have a page on exactly this question. There’s a link to it at the end of this page, or if you’d like to view it now you can click here

I became involved in Cardano back in 2017. Originally I came to invest and take a bet on the future. The more I learnt about it the more I wanted to be part of the groundswell movement that is Web3 and in particular Cardano. During this time I’ve seen my investments plummet, reach staggering highs and falls back down to earth, as the crazy crypto markets play out.
Blockchains can be an overwhelming space for someone new to come into. There's the bad sides of crypto that you've probably heard about, but also many brilliant people creating revolutionary new projects and services. This website is my personal project to try and pass on some of my knowledge and experience to new people curious about it. To try and convey the brilliant sides of it all that are going to bring so many exciting new things.

I became involved in Cardano back in 2017. Originally I came to invest and take a bet on the future. The more I learnt about it the more I wanted to be part of the groundswell movement that is Web3 and in particular Cardano. During this time I’ve seen my investments plummet, reach staggering highs and falls back down to earth, as the crazy crypto markets play out.
Blockchains can be an overwhelming space for someone new to come into. There's the bad sides of crypto that you've probably heard about, but also many brilliant people creating revolutionary new projects and services. This website is my personal project to try and pass on some of my knowledge and experience to new people curious about it. To try and convey the brilliant sides of it all that are going to bring so many exciting new things.

Why Cardano?

Well, that’s all the most typical initial blockchain questions out of the way! The general questions and assumptions many of the people who find their way here have on their minds. 

But, this is a website that is primarily focused on Cardano, so it’s probably about time we got down to some of the nitty gritty about why Cardano is, in our opinion, a blockchain you should know all about.

Buckle your seatbelt Dorothy, cause things are about to get a bit more in-depth…

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What is "Blockchain" and "Web3"?

The definition of a blockchain and Web3 can vary a little depending on who you ask.

A general definition of a blockchain is a collection of computers, usually globally spread out and controlled by different people, that work together to create a chain of blocks. Each one of these blocks is simply a block of data. A bit like, say, a new page in a book, or a new sheet in a spreadsheet. These computers all run the same blockchain software and all work together to record each transaction that is requested by users of the blockchain. As each occurs, the computers add it to the new block (in our analogy think adding it as the next sentence on the page in the book, or adding it as the next row in a spreadsheet).

There’s a live viewer of blocks being created right now on the Cardano blockchain if you’re interested:

Once its time to start a new block, the computers all lock the last one and create a mathematical signature that stops anyone ever being able to change it (by using cryptography – very clever maths).

These blocks of data remain on the blockchain, forever. Anyone can view them, no one can ever change them.

Web3 is a broader term. It incorporates blockchain because it is a key part of Web3. That’s because an ideal blockchain is “decentralized”, which means it can’t be controlled or altered by any one person, company or government. Instead, a decentralized blockchain is a global entity in its own right, beyond the borders and control of individual countries and governments.

Web3 is the successor to Web2, which is the current version of the internet. Web2 is all about “user-generated content” – content added by the users of the internet. Think Facebook, Twitter, YouTube, etc. Web3 seeks to remove the power that has ended up in the hands of a few large companies that control these Web2 websites and internet services. Web3 is all about “hey if you wrote this song, if you wrote this book, if you created this video, you should own your content and be able to distribute it and even make money off it under your own terms, without having to accept nasty terms and conditions of the large companies who currently control all the popular internet websites and services”.

Giving the power back to the people.

This is why blockchain and Web3 has such a massive community of developers and businesses working on it and who are so excited by it. They all already know its going to succeed, because it offers something the general public will really want. Just as the internet itself did 25 years ago.

What is a good blockchain?

To understand why Cardano is a good thing, we first need to look at what makes a good blockchain. 

A blockchain is simplistically a big computer database. It holds records of every transaction that occurs on it, organised into blocks, all time-stamped and using cryptographically secure signatures (very clever maths) that prove exactly what happened.

That on its own isn’t hard to achieve, the technology to do that has existed for a long time. What makes blockchains hard is the additional requirement for it to be decentralized. Once you add that to the mix and start thinking through exactly what that means (at the blockchain design level), things get much, much harder.

So, an ideal blockchain is:

Decentralized, which means

Not owned or controlled by any single entity or government.

Usable by anyone – no centralised entities or gatekeepers that must be used to permit access to its services.

Controlled and run by the whole global community it provides its services to.

Trustable, which means

Immutable – its history can’t be altered by anyone. Not won’t be – literally can’t be – as in it’s impossible to!

Auditable – anyone can verify every transaction that’s ever occurred, without reliance on a centralised party.

Privacy protecting – where it’s important, keeping your private information safe and under your own control.

Why is decentralized hard?

If you’re interested to know why creating a decentralized blockchain is a hard problem to solve I’ve a page that will tell you here

How does Cardano solve Decentralization?

One of Cardano’s primary reasons for existing is to bring fairness and access to financial services to everyone, including the world’s poorest people. To do that properly, in a way that can’t be manipulated by powerful people, companies or governments, it had to get decentralization right, from the outset. It’s taken a lot of time to do it, but today it stands as by far the best leading blockchain in terms of its decentralization credentials (with even better to come as it continues to build out its full capabilities).

Here are some of the key reasons Cardano has become the most decentralized leading blockchain:

Large number of stake pools

Its design encourages people to create lots of independent “stake pools” – these are the individual computers that make up the whole blockchain. The more you have, the more decentralized it is and the harder it is for someone to ever take control of it.

Fair coin distribution

Unlike a lot of blockchains, when Cardano was created they released the majority of its ADA cryptocurrency coins to the public to buy. Disproportionate quantities weren’t kept back for themselves or investors. It has much better decentralization as a result.

Passionate community

Cardano has spent years fostering its community of developers and supporters. Today it stands hundreds of thousands of people strong, soon to be millions. People who look into Cardano seem to want to stick around…

Open source

The entire Cardano blockchain, all of its software, is released under open source licencing, for anyone to inspect it and even re-use it if they wish.

Governance baked in

Governance means the tools built in that allow a decentralized blockchain to have its community make all of the decisions on its operation and how its future development will happen.

Make the world better and fairer

It’s Cardano’s whole purpose and is why it has strived to be the most decentralized blockchain. The motivation for everyone to take part, the poorest as well as the richest, to help run the blockchain and help decide its future is the same. It’s a fair and equal system, from the bottom all the way up to the top.

Why are blockchains useful?

Good blockchains provide a highly secure and trustworthy foundation which can be used to provide all sorts of services on top of it. The blockchain itself doesn’t typically provide those services, it just provides itself as the tool, the decentralized root of trust. Individuals, companies and institutions utilise the blockchain to offer their services on top of it.

In the case of Bitcoin, the blockchain offers not much more than being a store of value (it does this well, apart from its terrible environmental credentials). In the case of newer blockchains such as Cardano, the blockchain offers tools that can be much more useful. Here are a few examples:

Provision of other cryptocurrencies, beyond the blockchain native cryptocurrency. This means not just Bitcoin itself, but any other coin you may wish to create.

Provision of tokens that convey ownership, achievements, membership, desirable items, etc. Think land deeds, qualifications, membership, NFTs, …

Provision of financial services, without needing to rely on service providers (anyone can provide services to anyone else – no bank sitting in the middle making large profits and who can decide not to provide services, or to charge extortionate fees).

Proof of identity, but without giving up your rights to control and protect your own identity.

Provable voting, where every citizen can verify their vote was counted but without anyone else being able to see how they individually voted (yes you read that right – maths and cryptography is very clever these days!).

Like how, in normal speak please?!

OK, so a blockchain typically has a native currency. In Cardano’s case, that is a coin which is called ADA. ADA is a cryptocurrency and it is stored on the Cardano blockchain. Like Bitcoin is a cryptocurrency that is stored on the Bitcoin blockchain. This cryptocurrency is used to pay for things on the blockchain and can be used to pay other people too. The Cardano blockchain has a certain number of ADA in total, and each coin (each ADA) is stored in a wallet on the blockchain.

Wallets are owned by people. An individual wallet can contain one coin, a fraction of a coin, or lots of coins. Think a Euro, a few cents, or lots of Euro’s and cents that you keep in a physical wallet in your pocket. Blockchain wallets are the same, just digital and stored on the blockchain itself. Your ownership of a wallet means you and only you are able to provide the secret password which allows that wallet to be used (its coins to be spent).

The blockchain keeps track of everyone’s wallet, and moves these coins between wallets when you carry out a transaction – when you decide to pay someone from your wallet to theirs.

The decentralization of a blockchain means that no one computer does this, but instead lots of computers owned and controlled by different people, each running the blockchain software. If someone bad controls one of these computers and tries to change the blockchain, for instance send themselves coins they shouldn’t, the software running on all the different computers spots the anomaly and rejects any change that is different to the correct changes the majority of the computers that form the whole blockchain agree on.

What we’ve just described there is what Bitcoin does. It doesn’t do much more than that. However, newer blockchains, blockchains like Cardano, they can do a whole lot more.

Firstly, on a blockchain like Cardano you can create other assets that the blockchain will store for you. Like an ADA coin, but different. It could be a new coin you decide to create, one you decide to call “Dave coin” if you wish. You can create one of them, or you can create billions of them. They are each stored in wallets on the blockchain just like the native cryptocurrency ADA is stored in wallets. You can keep all of them in your wallet, or you can send them to other people’s wallets.

These coins you create don’t need to be coins though, they can be any sort of digital token, each of which has whatever data you want to store in it. An “NFT” that you may have heard of, is one of these digital tokens. A NFT could be a token that you create and send to someone else to prove they own a piece of art you created and sold to them, for instance. A token that proves membership of your fan club. A token issued by a university that proves you graduated from there and achieved a particular qualification. A token that proves you own a piece of land or an item of property. Really anything you want them to be.

That’s what’s so cool about NFTs, what they will be used for is up to you and your imagination.

OK, that’s all pretty neat, so I can get or create coins and tokens, I can keep them in my wallet and I can send them to other people. All protected by the security and decentralization of the Cardano blockchain. Is that it?

Nope, because we’ve not touched on smart contracts yet, the things that make a modern blockchain come alive! 

These are pieces of software that execute on the blockchain and do whatever the creator of them wants to happen. That might be a little program they’ve written which says “transfer these coins or these tokens when some specific set of conditions occur”. It might be “do this if these things happen, but if they don’t by this time then instead do this”. Again, what a smart contract can do is limited only by your imagination. What’s really powerful about them is that they run on the blockchain, there is no person or company you need to rely on for them to work. They are decentralized and controlled only by the rules the creator of each smart contract builds into them.

NFTs

NFTs are kind of a big deal. You may have heard people rubbish them, it’s another classic attack on the Web3 and blockchain space. But what they really are and what they promise is much deeper than you might imagine.

Cardano is a brilliant platform for NTFs. It has a large NFT community and its technology is one of the most suited out there for NFTs themselves.

As this is kind of a big subject, I’ve got another page on exactly this. There’s a link to it at the end of this page, or if you’d like to view it now you can click here

Staking - earn free money!

If you chose to hold the native currency of the Cardano blockchain, ADA, you have access to a rather beautiful thing called staking. Remember that Cardano is a “Proof of Stake” blockchain? Well, its reliance on Proof of Stake means that it needed to find a way to incentivise its users to “stake” their ADA (we talk about Proof of Stake on our Blockchains and the Environment page – there’s a link at the end of this page or if you’d like to view it now you can click here). It does this by providing you with staking rewards every 5 days. Not silly excessive rewards, but a decent on average 4 – 5% per year reward currently if you select a good staking pool to stake your ADA with. These rewards are funded in the long term from part of the fees the blockchain charges its users to carry out transactions.

All you as a user have to do is keep your ADA in your own wallet (well why wouldn’t you), and choose which stake pool to assign your wallet’s staking rights to. That bit requires you to make a choice and to occasionally keep an eye on it to make sure they are still the best choice for you, hence the staking rewards to incentivise you to do that!

You don’t need to understand how all this works, as a user you just lookup a good stake pool from one of the websites that’s sprung up to advertise them – like selecting a good bank interest rate – set your wallet to use them and every 5 days your rewards will just appear in your wallet!

Some other blockchains have staking too, most notably Ethereum. Staking is not created equally amongst blockchains. Cardano staking is widely considered far superior and safer than staking on blockchains such as Ethereum, which lock up your coins (so you can’t spend them) and have an inherent risk of slashing (your coins being taken from your wallet). Cardano doesn’t have any of these nasties – yep our love of Cardano isn’t just born out of hype, there are real solid sensible reasons why it’s so loved!

Security, the most secure blockchain

If you’re going to use it for money, property, government, etc you want it to be secure right?!

In reality, you can’t actually call something “the most secure” unless you are talking in hindsight because you only know about security vulnerabilities once they get discovered! However, the foundations and principles Cardano is built on arguably give it the greatest chance of being the most secure smart contract blockchain ever built.

Security is an all-encompassing field that needs to be involved in every decision about the construction of a blockchain.

From the use of Haskell as its programming language (the same programming language chosen by banks, large financial institutions and other mission-critical infrastructure), to the years spent carrying out the most thorough academic research of every aspect of its design, Cardano has consistently been the leader in security best practices and approaches in the blockchain space. Other blockchains avoided this work and these features in the interests of speed and ease of development. Cardano is the only leading blockchain to offer these assurances to its users.

Does it mean Cardano can’t be hacked? Well no, it’s software and mistakes can still be made. However, the principles adopted by Cardano give its users the best tools possible to avoid those mistakes. Mistakes may still occur and money might still be lost, that’s software and humans developing software unfortunately (just think how many billions the traditional banking system has lost to mistakes and scams over the years). However, Cardano arguably offers the best blockchain tools a user, developer, or institution can choose to work with.

Slow and steady

Cardano has taken a lot of mocking during its formative years for its slow approach.

Scaling - to billions of users

One of the important characteristics of a blockchain is its ability to scale. When you’re Facebook, Google, Amazon – scaling to millions and then billions of users is something hard you have to deal with. But you do it under your own control in your own data centers with your own computing hardware.

When you’re building a decentralized blockchain, scaling is something that needs to be handled by not just the software, but by the computers that run the blockchain. These computers are purchased and run by the community, in Cardano’s case, by Stake Pool Operators (“SPOs”). If you are aiming for a high level of decentralization and need a large number of independent stake pool operators running the blockchain for everyone, then you need to ensure these computers are affordable to buy and run.

Blockchains like Ethereum, Solana, etc, have largely ignored this, and have ended up with poor decentralization as a result. Cardano put a great deal of effort into researching this area before even a single line of software code was written, and as a result, now has a blockchain that runs on relatively low-grade computer hardware. Cheaper to buy, cheaper to run and also consumes much less electricity too than the ridiculously powerful setups blockchains such as Solana require.

Thats not the only consideration though, there’s also how the blockchain itself works. Cardano chose an accounting system called eUTxO. Exactly how it works is too complex for here. It’s the same system chosen by Bitcoin, but expanded to let it handle smart contracts and all that ether goodies the Cardano blockchain offers. The reason? Well, a big part of its choice is that it is a much better approach for scaling to very large user numbers, compared to simplistic accounting models such as the type chosen by Ethereum.

Funding

Cardano never needed VCs (Venture Capitalists – financial firms that often fund large projects, in return for control of them and a large slice of the profits). Many other blockchains are reliant on them, with all the bad things that can come with that. Cardano instead has a funding mechanism called Project Catalyst. This is already funded to the tune of many hundreds of millions of dollars worth of ADA. All money generated from the initial sale of Cardano’s ADA tokens to the general public, and onwards through revenues from the operation of the blockchain (the small fee’s users pay to carry out a transaction).

Project Catalyst runs multiple funding rounds per year, each awarding millions of dollars worth of ADA to winning projects. Who gets awarded these funds? Well, that’s up to the community. The whole Cardano community decides, through the community-focused governance system that is being rolled out to ultimately control every part of the Cardano blockchain.

It simply can’t be overstated what a powerful and important feature of the Cardano blockchain Project Catalyst is. It provides the means for the blockchain and all its services to be improved now and long into the future, by the community, for the community.

Open Source

Open source means that a project has published all of its source design files and given anyone a licence to look at them and even use them for their own projects if they wish. It means all of the work everyone has done on a project is made available, for free, for the entire world to use if they want.

Cardano is open source. All of its software is released to the community to be freely used by others. It’s also deliberately not patent encumbered.

That’s a short couple of sentences to read, but its implications about the intent of its creators, its community and its mission to change the world can’t be overstated.

Who's behind Cardano?

Charles Hoskinson – Cardano’s creator. He remains instrumental in its development and rollout, in no small part because his company continues to develop the core Cardano blockchain software. One aspect of Charles that can’t be overstated is his openness and engagement with the community. Both for Cardano, and for the blockchain industry as a whole. There is no other leader in the blockchain space who comes anywhere close. The reason Cardano has such a large and engaged community is because of Charles, his fundamental beliefs and aims and his ability to communicate it so well and modestly with people everywhere. One of his videos which is particuarly famous is his 2014 TED talk titled “The Future Will Be Decentralized”, where he sets out some of his vision for blockchain. Outside of that, the countless AMA’s (Ask My Anything) videos he’s done are a gold mine for anyone wanting to delve into the crypto space and what it needs to offer to the world.

Input Output – (also called IOG and IOHK) is the company owned by Charles Hoskinson (Cardano’s founder), tasked and paid to research and then build the Cardano blockchain during these formative years.

The Cardano Foundation is the party in ultimate control of Cardano. It has only really properly sprung into life recently but is now making big moves to push Cardano forwards.

Tell me more!

If you’ve made it this far, you’re well on your way to becoming a bit of an expert on blockchain and Cardano! If you’d like to know more about what sets Cardano out there above the rest of the pack, hit the button below and visit my next page on exactly why Cardano is such a good blockchain choice.

Delve into everything happening on Cardano...

There's more!

There’s so much more we can talk about. In time I will get to expand this website out further. There’s DeFi, Hydra side chains, Marlowe, stable coins, regulation, identity, governance, research…

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This website is a personal project, aiming to try and explain what can be quite complex concepts to non-technical people. Why the good blockchains should exist, why Web3 is important and why Cardano in particular should be something everyone eventually knows about.

Got any thoughts about how to improve this content? Constructive criticism is also welcomed. Hit me up on Twitter, DMs are open to respectful people.

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