Cardano is an innovative blockchain that aims to bring together Bitcoin and Ethereum functionality into a single decentralized network with maximum scalability.
In this guide, we’ll delve into some of the inner workings of Cardano and its native cryptocurrency ADA. Specifically, we’ll talk about the difference between Cardano and ADA, and how the blockchain differentiates itself from its rival network Ethereum.
Are Cardano and ADA the same thing?
Cardano and ADA are often used interchangeably by most crypto investors, but they aren’t the same thing.
Cardano is the third generation blockchain network founded in 2015 by former Ethereum core developer and co-founder Charles Hoskinson.
The network improves the first and second-generation blockchains represented by Bitcoin and Ethereum, respectively.
On the other hand, ADA is Cardano’s native cryptocurrency, like Ether is to the Ethereum network.
According to Cardano, the origin of the name ADA is historical. The title is based upon a 19th-century mathematician and computer programmer, Ada Lovelace. She was the daughter of the poet Lord Byron.
Cardano has two execution layers: (1) the Cardano Settlement Layer (CSL), which enables digital payments or value transfer, and (2) the Cardano Computation Layer (CCL), which hosts smart contracts or decentralized applications (dApps).
ADA is designed to facilitate value transfer on the CSL layer while also functioning as the mechanism to pay for gas fees on the CCL layer.
Why is Cardano called ADA?
Referring to Cardano as ADA is incorrect because the two aren’t the same thing. Cardano is a blockchain network, while ADA is the native cryptocurrency that facilitates value transfer within the Cardano blockchain.
However, most crypto investors often use the terms interchangeably, especially traders used to ticker symbols.
Therefore, ADA can refer to Cardano since it’s the actual asset being traded or invested in by the traders.
Who owns Cardano?
Cardano is a decentralized blockchain network meaning that its contributors, including the core developers and ADA stakeholders, are distributed worldwide.
However, critics have pointed to the power of IOHK in the development and governance of the project.
IOHK (Input Output Hong Kong) is arguably the driving force behind Cardano. It’s a Hong Kong-based technology and engineering company that builds decentralized networks for educational institutions, government entities, and enterprises.
The company was created by Ethereum co-creator Charles Hoskinson and Jeremy Wood in 2015.
According the official Cardano website, the IOHK is “contracted to design, build, and maintain the Cardano platform.”
Can Cardano be mined?
Cardano cannot be mined. Instead, Cardano can be staked because it uses a mechanism called Proof of Stake (staking) to achieve consensus within the network as opposed to using Proof of Work (mining).
Staking involves locking assets within a smart contract to be used as an incentive for good behavior by the transaction validators.
Also read: Can You Stop Staking Crypto?
Is ADA built on Ethereum?
ADA isn’t built on Ethereum; instead, it’s built on the Cardano blockchain. ADA is the native cryptocurrency of the Cardano blockchain, and since the latter is a fully-fledged network like Ethereum, it has a native crypto asset.
Cardano and Ethereum are direct competitors as both are smart contract platforms.
Cardano hasn’t fully rolled out its smart contract capability, but once it does, it promises to be a better alternative to its older rival.
What blockchain is Cardano on?
Cardano is a multi-layered blockchain, with a transactional first layer and second layer for smart contracts.
The network has a native crypto asset called ADA, which is sometimes erroneously used to refer to Cardano, but the two aren’t the same.
ADA is the cryptocurrency used to facilitate value transfer within the Cardano ecosystem, and it is created on the Cardano blockchain network.
Is ADA good crypto?
Whether ADA is a good cryptocurrency is an entirely subjective matter. The correct answer will depend on the person asking it, as people will look at various aspects.
For instance, investors will consider its potential to return outsized gains. They’ll use technical and fundamental analysis to gauge whether to invest or not.
Network supporters will be looking to see whether it is easy to stake and unstake their coins, the staking rewards, and how much their contributions are valued within the network.
Also read: Is Cardano Quantum Resistant?
Is ADA the next bitcoin?
it’s still too early to know if Cardano will be the next Bitcoin. Cardano is a third-generation blockchain with the features of the first two generations and a few improvements.
The network is designed with two layers: the Cardano Settlement Layer (CSL) and the Cardano Computational Layer (CCL).
The CSL mimics Bitcoin’s functions by letting users send and receive digital payments on a decentralized network.
Is Cardano better than Ethereum?
Cardano promises to be a better alternative to Ethereum by offering a more scalable network through its staking consensus mechanism.
Nevertheless, Cardano is yet to launch its smart contract functionality, and even if it does, Ethereum is also working on migrating from mining to a staking consensus mechanism that promises to improve its scalability.
At the moment, Cardano could be considered better than Ethereum because it is already faster and more environmentally friendly. Still, Ethereum is more popular, has smart contract capability, and is looking to upgrade for efficiency.
Also read: Is Cardano EVM Compatible?
Why is ADA so cheap?
ADA is cheap because Cardano minted a large number of these ADA coins. The cryptocurrency has a max supply of 45 Billion coins compared to Bitcoin’s 21 Million.
The law of supply dictates that the price of an asset will rise or fall inversely to its supply which means that an increasing supply will depress the price and vice versa.
Can Cardano replace Ethereum?
It’s too early to tell whether Cardano will replace Ethereum in the long run. Because Cardano is a relatively late entrant to the decentralized apps market, it can learn from its older rivals and avoid their mistakes.
On the other hand, Ethereum is hard to replace due to its first-to-market advantage and its constant iterations from core developers to improve it.
Cardano is an innovative blockchain project that introduces a lot of benefits not just to its community but to the entire crypto market. We still don’t know if it’ll have a lasting impact on the crypto space as the core developers are working on the project’s roadmap.