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About Cardano

What is Cardano? What does 'Cardano' mean?

Cardano is a 3rd generation cryptocurrency, which tries to improve on 2nd generation cryptocurrencies like Ethereum and 1st generation cryptocurrencies like Bitcoin. A decentralized cryptocurrency keeps track of all transactions by all addresses on a peer-to-peer shared record. One of Cardano’s innovations is high transaction capacities, fast transaction times, and low transaction fees, through a system of proof-of-stake.

How does Cardano work?

Blockchain based cryptocurrencies like Cardano work by grouping transactions together in data blocks, then linking the blocks cryptographically. The chain of blocks is stored across a decentralized network of stakeholder nodes, and distributed as peer-to-peer shared files. Quantities of Cardano are stored at addresses, cryptographic sequences paired with a private key used to spend the amount at the address. The user’s wallet keeps track of all their Cardano addresses and adds up the balance.

Who invented Cardano? How was Cardano created? Who is behind Cardano?

Cardano was created by Charles Hoskinson as an attempt to technically improve Bitcoin and Ethereum, increasing the amount of transactions that can be processed, by replacing computationally expensive proof-of-work with a proof-of-stake. Cardano borrows the Blockchain concept from Bitcoin, and the Smart Contract concept from Ethereum. Cardano is maintained by the IOHK (Input Output Hong Kong), and the software is open source, so anyone can improve it.

How many Cardano coins are there? What is the Cardano maximum supply?

The maximum number of Cardano ADA is 45 billion. New Cardano coins are given to staked wallets as a reward in the proof of stake system. It is estimated that it will take several decades before the maximum supply is reached. The designers were very conscious of hyperinflation from fiat currencies, and wanted a currency with a ruthlessly fixed supply. This makes Cardano a deflationary currency.

Can Cardano be mined? What is Cardano mining? How does Cardano mining work?

Cardano is not minable, but it has liquid staking with rewards payable every 5 days (1 epoch). Traditional cryptocurrency mining, lite Bitcoin, is the computational process of adding new blocks to the blockchain. New transactions are grouped together in a block. New blocks must cryptographically connect to previous blocks with a proof-of-work hash function. Cardano also has a blockchain, but with a critical difference – it is proof-of-stake rather than proof-of-work. The blockchain is a record of all transactions, but rather than validation by anyone who performs the proof-of-work, transactions are validated by consensus proof-of-stake.