What is Cardano (ADA)?

Cardano is a research-driven Proof-of-Stake blockchain, often referred to as a "third-generation blockchain." It was founded by Charles Hoskinson, a co-founder of Ethereum, with the goal of creating a more secure, sustainable, and scalable platform for smart contracts and dApps.

• Scientific Approach: Every technical development at Cardano is based on peer-reviewed scientific papers. This methodical approach aims to minimize errors and maximize stability.
• Sustainability: Cardano uses the energy-efficient Ouroboros Proof-of-Stake consensus mechanism, which is considered one of the most secure of its kind.
• ADA Token: The native coin of the platform, used for transactions, staking, and participating in governance.

How does Cardano work?

Cardano is unique due to its **two-layer architecture**, which allows for flexibility and easy upgrades:

1. Cardano Settlement Layer (CSL): This is the base layer responsible for processing transactions with ADA. It is optimized for security and efficiency, similar to the Bitcoin network.
2. Cardano Computation Layer (CCL): This layer runs the smart contracts and decentralized applications. Since it is separate from the settlement layer, the rules for computations can be adjusted without compromising base security.

Consensus is achieved through Ouroboros, a mathematically proven secure Proof-of-Stake algorithm. Instead of relying on computing power, validators are selected based on the amount of ADA they hold and "stake" to create new blocks.

Why is This Important?

Cardano takes a slower, but more methodical and security-oriented approach to blockchain development, making it particularly attractive for certain use cases.

• Security through Research: The focus on scientific peer review makes Cardano a potentially very secure platform for high-value applications like identity solutions or financial services.
• Strong Community: Cardano has one of the most dedicated and loyal communities in the crypto space, who strongly believe in the project's long-term vision.
• Interoperability: The design aims to work seamlessly with other blockchains and traditional financial systems in the future.

What are the Risks?

Cardano's methodical approach also comes with challenges:

How can I buy this coin?

The process for buying ADA or other established cryptocurrencies is always very similar. We have explained the easiest method for you step-by-step in our Start Guide.