What is Cardano (ADA)?

As blockchain technology develops rapidly, each new platform aims to eliminate the shortcomings of the previous generation and offer a better future. Cardano, one of the important players in this ecosystem, draws attention with its scientific blockchain approach. So what exactly is Cardano and what are the features that distinguish it from others? In this article, we will thoroughly examine Cardano's cornerstones, history, why it is so valuable, and who brought it to life.

Cardano's Definition and Origin

Cardano (ADA) is known as a decentralized, public blockchain platform. Its main purpose is a Proof-of-Stake (PoS) blockchain designed to be more efficient than blockchains based on energy-intensive mechanisms such as Proof-of-Work (PoW). In other words, it is a highly energy-efficient platform among PoS coins. Cardano is also defined as a third-generation blockchain project developed with academic research and scientific methods. While positioning itself as a "third-generation" platform, it states that it is an update and alternative to "second-generation" platforms such as Ethereum. Cardano has design principles that aim to overcome issues that previous cryptocurrencies faced, such as scalability, interoperability, and lack of regulatory compliance.

Chainlink claims to specifically address Bitcoin’s slow and inflexible nature and Ethereum’s security or scalability issues. It is known for its research-focused approach. In 2017, when it was founded, it was the largest cryptocurrency using Proof-of-Stake.

Cardano has a layered structure consisting of the Settlement Layer (CSL), which is the layer where transactions take place and are recorded, and the Computation Layer (CCL), which allows smart contracts and decentralized applications (dApps) to work. This dual-layer structure allows for faster transactions than Bitcoin.

The story of the blockchain's cryptocurrency called ADA is also interesting. Because ADA was named after Augusta Ada King, Countess of Lovelace, an English aristocrat and generally considered the first computer programmer. The subunit of Ada is Lovelace. 1 ADA is equal to 1,000,000 Lovelace. Cardano's consensus mechanism is known as a Proof-of-Stake protocol called Ouroboros PoS consensus. Ouroboros was released as "the first provably secure PoS consensus protocol." This mechanism uses and rewards cryptocurrencies for work done to review and expand the blockchain's historical record, just like Ethereum. However, unlike Bitcoin's PoW, it is based on staking and consumes much less energy. Cardano's founder Charles Hoskinson described the Ouroboros consensus mechanism as energy efficient. In fact, according to data, it is up to four million times more energy efficient than Bitcoin's PoW. At the heart of Ouroboros is a Proof-of-Stake (PoS) consensus algorithm used by computers running the Cardano software to secure the network, verify transactions, and earn newly minted ADA.

The platform’s smart contract platform (Plutus) allows developers to build decentralized applications on the Cardano blockchain. Cardano is implemented with a programming language optimized for smart contract development called Plutus. Upgrades like Plutus V3 aim to further enhance its smart contract capabilities and developer tools. There is also a domain-specific language called Marlowe that makes it easier for non-programmers to create smart contracts in the financial sector. Cardano is built using Haskell, a functional programming language that emphasizes mathematical precision and reliability. Unlike traditional languages, Haskell uses a declarative approach where functions are written as mathematical expressions.

Cardano was founded in 2015 by Charles Hoskinson and Jeremy Wood. Charles Hoskinson was one of the co-founders of Ethereum but began developing Cardano after leaving due to disagreements over the direction of the project. Hoskinson stated that he viewed the early versions of Ethereum as a "proof of concept" and aimed to address its shortcomings with Cardano. After two years of research and development, the Cardano blockchain network was launched in 2017 with its first mined block.

Cardano's main goal is to create a secure, sustainable, and scalable financial infrastructure. It brings together leading technologies to provide unparalleled security and sustainability for decentralized applications, systems, and societies. It aims to be a platform that is strong enough to protect the security of billions of people's data, scalable enough to adapt to global systems, and robust enough to support fundamental changes. Cardano aims to decentralize power from unaccountable structures to individuals, that is, the edges, and to be a force for positive change and progress. It also has an ambitious goal of providing banking services to the world's unbanked population.

The Cardano platform aims to become a system for decentralized applications with various use cases as an answer to the question of what Cardano is used for. It focuses on creating a public blockchain ecosystem that allows developers to create other tokens, dApps, or any use case that a scalable blockchain network can accommodate. ADA, on the other hand, is used for transactions on the platform.

Cardano’s History: Major Milestones

Cardano’s story begins with its seeds being planted in 2015 and follows a carefully planned roadmap. This roadmap is divided into five main “eras,” or phases, named after important figures in the history of poetry and computer science: Byron, Shelley, Goguen, Basho, and Voltaire.

These stages represent the transformation process of Cardano from a basic blockchain to a fully decentralized and self-governing ecosystem. The story of Cardano can be divided into important headings as follows:

• 2015: IOHK was founded. This engineering company, which laid the groundwork for the development of Cardano, was founded by Charles Hoskinson and Jeremy Wood. IOHK focused on developing high-assurance blockchain infrastructure solutions for public, private, and government customers. It became the primary developer of the Cardano blockchain. Later, Input Output Hong Kong (IOHK) was renamed Input Output Global (IOG).
• 2017: Cardano mainnet and ADA token were launched. After two years of research and development, the mainnet of the Cardano blockchain went live in September 2017 with the Byron phase. This phase allowed users to buy and sell their native token, the ADA token. The Byron phase was the first phase of the Cardano roadmap.
• 2020: Staking began with the Shelley update. Named after Mary Shelley, the Shelley phase transitioned Cardano from a governed structure to a more decentralized PoS consensus mechanism called Ouroboros. This phase was designed as a secure and stable transition towards a more decentralized Cardano via community-run network nodes that were incentivized to participate in the network’s decentralization goals. Shelley introduced the staking mechanism, which allowed ADA holders to stake their tokens to participate in the security of the network and earn rewards. This significantly decentralized the network.
• 2021: Smart contracts enabled with the Alonzo hard fork. Named after computer scientist Joseph Goguen, the Goguen phase aimed to enable smart contract functionality on the blockchain. This was achieved with the Alonzo hard fork in September 2021. The Alonzo update enabled smart contracts on the Cardano blockchain for the first time, opening up the possibility for a wide range of dApps to be built on Cardano. This update allowed developers to create dApps like NFTs and manage multiple cryptocurrency assets associated with them. The Alonzo hard fork was one of the critical steps in the Cardano Shelley Alonzo transition and significantly expanded Cardano’s capabilities.
• 2022: Vasil hard fork increased scalability. As part of the Basho phase (named after the Japanese poet Matsuo Bashō), the Vasil hard fork was completed in September 2022. This update introduced scalability upgrades to further enhance dApp functionality, such as increased block size, improved transaction processing, and new scripting capabilities. Vasil increased the network’s transaction throughput and smart contract capabilities.
• 2023–2024: CIP (Cardano Improvement Proposal) and Governance Improvements. The Voltaire phase (named after the French writer and philosopher Voltaire) focuses on the integration of decentralized governance. This phase aims to bring voting and treasury management to the blockchain network. Through mechanisms such as CIP (Cardano Improvement Proposal), a decentralized decision-making process has been launched that allows ADA token holders to create, vote on, and implement proposals. Testnets such as SanchoNet, defined by the CIP-1694 guidelines, serve as a sandbox for testing governance tools. The Chang hard fork, planned as part of Cardano’s Voltaire phase, will introduce on-chain governance in two phases. This transition marks the successful transfer of control of network development from IOHK to the community.

These major milestones summarize the Cardano updates process. Although the answer to the question of when Cardano was released is 2017, the platform’s capabilities have changed and expanded significantly over time. The roadmap continues to progress, with Basho focusing on scaling and optimization, and Voltaire bringing full decentralized governance. Overall, this Cardano roadmap provides a vision for the platform’s future development. We can also say that the roadmap satisfies the curiosity of investors or people who want to enter this field regarding the network.

Why is Cardano Valuable?

There are several reasons why Cardano stands out among other blockchain platforms and is considered valuable. The main reasons are the platform's basic principles and technological infrastructure. However, it is not limited to this. Let's take a closer look...

Cardano is an academic blockchain platform

First of all, Cardano is the only blockchain platform developed with academic peer-reviewed research, which makes it unique. The platform's "research-first" approach is a distinctive feature. As the company that built Cardano, IOHK has published more than 100 academic articles on the technology and partnered with global universities in the process. It has supported research on blockchain technology with institutions such as the University of Edinburgh, Tokyo Institute of Technology, Stanford University, and the University of Wyoming. This rigorous, evidence-based development process also includes formal verification, which means mathematical verification of Cardano's code. This scientific and research-based approach creates confidence in the robustness of the platform. This allows it to be defined as a scientific blockchain.

Energy saving: PoS infrastructure draws attention

Cardano's PoS infrastructure, which provides low energy consumption, is a significant advantage. Bitcoin’s Proof-of-Work (PoW) mechanism requires a tremendous amount of energy to reach consensus. Cardano’s Ouroboros consensus algorithm addresses this issue with a more sustainable approach by offering a solution to PoW’s performance and energy usage challenges. Ouroboros selects participants (in Cardano’s case, staking pools) to create new blocks based on their stake in the network. As such, it uses a much smaller amount of energy than Bitcoin’s PoW algorithm. This energy efficiency is valuable both in minimizing environmental impact and making the consensus process more accessible to the average user.

Cardano can generate income through staking

Cardano’s passive income through staking is an attractive feature for its users. In the Proof-of-Stake consensus mechanism, users “stake” the blockchain’s cryptocurrency for the opportunity to become validators. Staking is the locking of a certain amount of ADA cryptocurrency into the network to represent and secure validator rights on the Cardano network. Validators open blocks of transactions and finalize the transaction. They are then rewarded with ADA according to the number of tokens they staked. Users can participate in the validation process by joining a pool, which can be public or private, or by creating their own pool. These Cardano staking pools allow ADA holders to earn rewards by transferring their tokens to others rather than operating them themselves. Staking both ensures the security of the network and incentivizes participants for honest behavior.

Wide range of use cases and ecosystem

On the other hand, Cardano has active use cases for decentralized applications (dApps), NFTs, education, and identity projects. Its smart contract capabilities enable a wide range of use cases. DeFi services are available on Cardano, allowing developers to create native assets, dApps, and NFTs. The platform’s use cases include traceability, authenticity, and sustainability. Some of the cases where Cardano has been used include:

·       Use in the coffee supply chain in Ethiopia

·        Use in the identity verification system in Georgia

·        Authenticity pilot program for New Balance shoes

·        ID and registration system for five million school students in Ethiopia

·        DJ Paul Oakenfold’s album release

·        Collaboration with Dish Network

Also, the potential to help citizens in Zanzibar, Ethiopia and Burundi obtain digital IDs, and the World Mobile Token (WMT) that provides remote mobile network access in Africa, were built on the Cardano network. These projects and use cases are the simplest answers to the question of what Cardano is for. The Cardano Foundation aims to use blockchain to create future-proof solutions by working with institutions, businesses, regulators and policymakers. Blockchain training is also offered through the Cardano Academy.

The apple of investors’ eye: ADA coin

ADA token is used for transaction fee payment, staking and governance. ADA is the native cryptocurrency token of the Cardano network. Users can use ADA as a secure exchange of value, without the need for an intermediary third party. Every transaction is recorded permanently, securely and transparently on the Cardano blockchain. ADA ownership determines who becomes the slot leader (who has the right to add blocks) and who earns a share of the fees paid for transactions in the blocks. ADA tokens are also used to vote on software policies (such as the inflation rate), incentivizing participants to hold ADA and secure its future value.

ADA’s maximum supply is limited to 45 billion tokens. Approximately 31 billion ADA was in circulation in early 2020, with the remaining 14 billion planned to be released via minting. This information provides insight into the supply and circulation of ADA, as well as the economic structure of the token. The ADA token features make it not only a trading tool, but also a critical role in the operation and management of the network. The answer to the question of what is ADA coin defines this versatile token in the Cardano ecosystem. In the meantime, it is necessary to mention the ADA price. ADA is changing hands around $ 0.68 as of May 2025. It has been about 4 years since the coin saw its all-time high. In 2021, its price jumped to $ 3.10.

High security with Ourobos protocol

Finally, it is necessary to mention Cardano's Ouroboros protocol, which is described as "Provably Secure". This protocol guarantees that the network is secure as long as 51% of honest participants stake it. This security guarantee is achieved through innovative concepts such as random leader election. The protocol continues to evolve through new iterations and rigorous security analysis. Being written in formally specified programming languages ​​such as Haskell allows its code to be mathematically verified, a process widely used in the banking and defense sectors.

When all these factors come together, it becomes clearer why Cardano is a valuable blockchain platform. Research-driven development, energy efficiency, passive income opportunities, active use cases, and the functionality of its token make Cardano a major player in the blockchain ecosystem.

Who is Cardano's Founder?

The story of Cardano took shape under the leadership of visionary individuals. The platform's co-founders and the organizations that support it played critical roles in Cardano's development. Cardano was founded by Charles Hoskinson and Jeremy Wood. The duo are experienced in the blockchain world.

Charles Hoskinson is a Colorado-based tech entrepreneur and mathematician. He studied analytical number theory at the Metropolitan State University of Denver and the University of Colorado Boulder before entering the cryptography field with industrial experience. His professional experience includes founding three cryptocurrency-related startups: Invictus Innovations, Ethereum, and IOHK. He has also held various positions in both the public and private sectors. He was the founding chair of the Bitcoin Foundation’s education committee and founded the Cryptocurrency Research Group in 2013.

Hoskinson is also a co-founder of Ethereum. However, in 2014, he left Vitalik Buterin and the Ethereum team over a disagreement over whether Ethereum should be a commercial company (Hoskinson’s view) or a non-profit organization (Vitalik Buterin’s view). After this departure, he co-founded IOHK with Jeremy Wood in 2015 and focused on developing Cardano. Hoskinson stated that he is not seeking venture capital for Cardano, as he believes it goes against the principles of blockchain and that venture capital involvement can lead to over-controlling a project.

Hoskinson’s current projects focus on educating people about cryptocurrencies, advocating for decentralization, and making cryptographic tools easier for mainstream users. This includes leading the research, design, and development of Cardano, a third-generation cryptocurrency that launched in September 2017. He is the CEO and founder of IOHK. The primary answer to the question of who founded Cardano is Charles Hoskinson, but Jeremy Wood is also a key partner. Jeremy Wood is a former Ethereum colleague and co-founded IOHK with Hoskinson. He served as an Executive Assistant at Ethereum.

IOHK (Input Output), a company responsible for the technical development of the Cardano ecosystem, was founded in 2015 by Charles Hoskinson and Jeremy Wood. This engineering and research company is designed to build cryptocurrencies and blockchains. It develops high-assurance blockchain infrastructure solutions for public, private, and government clients. IOHK served as the primary developer of the Cardano blockchain. Now rebranded as Input Output Global (IOG), the company is a fully decentralized remote organization of over 400 people in over 50 countries. It is strongly committed to the principles of academic rigor and evidence-based software development.

The Cardano ecosystem is governed by three core entities to ensure the progress of the project and its core mission. These independent entities collaborate within a decentralized team:

• IOHK (development): Responsible for building the Cardano blockchain as an engineering company and technical development. Software development firm.
• Emurgo (commercial integration): Responsible for commercial applications. Supports the commercial growth of the ecosystem.
• Cardano Foundation (community & standards): A non-profit foundation headquartered in Zug, Switzerland. Responsible for overseeing the development of the Cardano blockchain and promoting its adoption. Aims to standardize and promote the ecosystem. He works with institutions, businesses, regulators, and policymakers. Frederik Gregaard has been the CEO of the Cardano Foundation since 2021.

Frequently Asked Questions (FAQ)

Below, you can find some frequently asked questions and answers about Cardano (ADA):

• What is Cardano and how does it work?: Cardano is a third-generation blockchain platform developed based on scientific research. It uses the PoS (Proof of Stake) mechanism and aims to provide sustainable, secure and scalable solutions.
• What does ADA coin do?: ADA is Cardano's native cryptocurrency. It is used to pay transaction fees on the network, to do staking, and to participate in governance processes.
• How is Cardano staking done?: ADA staking is done by delegating your cryptocurrencies to validator pools (stake pools) by holding them in your wallet. Staking can be done easily through wallets such as Yoroi or Daedalus.
• What is the difference between Cardano and Ethereum?: Ethereum is an older and widely used platform. However, Cardano has adopted the energy-efficient PoS system from the very beginning. Cardano also has a layered structure developed with academic methods.
• What are Cardano’s future plans?: Cardano aims to increase the development of smart contracts, scalability, and governance. It is also working on projects such as on-chain governance (Voltaire) and sidechain integration.
• Is Cardano reliable?: Cardano is a reliable project with its scientifically based approach, open-source structure, and active developer community. However, it is always important to do your own research when investing.

Don’t forget to follow our JR Kripto Guide series for more on Cardano and scientifically based blockchain projects!