In the last few years, the Cardano blockchain gained solid positions in the blockchain market. The key factors of Cardano’s success are the special scientific development process and the wide list of companies working on Cardano blockchain. Cardano has gained popularity through such companies as crypto exchanges, wallets, trading platforms, and node providers, which give access to the Cardano nodes, and many other crypto partners.
The success of the Cardano blockchain can be also attributed to several technical key factors:
- Scientific approach: Cardano is known for its rigorous scientific and academic approach to blockchain development. The project is led by IOHK (Input Output Hong Kong), which has a strong focus on formal methods and peer-reviewed research. This scientific approach ensures that the blockchain is built on solid theoretical foundations and is designed to be secure, scalable, and sustainable.
- Peer-reviewed research: Cardano’s development process involves extensive peer-reviewed research. The team behind Cardano publishes their research in academic journals and conferences, which enhances the credibility and trustworthiness of the project. This focus on academic rigor helps to differentiate Cardano from other blockchain platforms.
- Ouroboros consensus protocol: Cardano uses a unique proof-of-stake (PoS) consensus protocol called Ouroboros, which was developed based on academic research. Ouroboros is designed to be secure, decentralized, and energy-efficient. It enables the Cardano network to achieve consensus without relying on energy-intensive mining operations, making it more sustainable compared to proof-of-work (PoW) based blockchains like Bitcoin.
- Scalability and sustainability: Cardano aims to address the scalability and sustainability challenges faced by many blockchain platforms. It has a layered architecture that separates the settlement layer from the computation layer, allowing for greater scalability. Additionally, Cardano incorporates mechanisms to address governance, interoperability, and sustainability, making it a comprehensive blockchain platform.
- Emphasis on compliance: Cardano places a strong emphasis on compliance and regulatory frameworks. By actively engaging with governments and regulatory bodies, Cardano aims to provide a blockchain platform that meets regulatory requirements and can be adopted by enterprises and institutions. This focus on compliance enhances Cardano’s appeal in regulated industries.
- Growing ecosystem and partnerships: Cardano has been successful in building a vibrant ecosystem around its blockchain. It has attracted a growing community of developers, researchers, and enthusiasts, apart from the companies, who contribute to its development and adoption. Cardano has also established partnerships with various organizations, including governments, academic institutions, and technology companies, to foster innovation and adoption of its blockchain.
These factors collectively contribute to the success of Cardano, making it an attractive blockchain platform with strong potential for growth and adoption. However, it’s important to note that the success of any blockchain project is subject to various factors, including technological advancements, market dynamics, and competition within the blockchain industry. Also, a big factor of success is the mass adoption within the Web 3 market, which can provide technical contributors, such as SaaS providers and companies which accept ADA coin, the native coin of Cardano blockchain. Let’s look closely at these types of companies.
Cardano Ecosystem Companies.
There are several notable SaaS providers for the Cardano blockchain. These providers offer infrastructure and services to support the operation of Cardano’s decentralized network.
- IOHK: IOHK, the technology company behind Cardano, operates a network of nodes to support the blockchain’s infrastructure. IOHK plays a crucial role in the development and maintenance of Cardano’s blockchain.
- Coinone: Coinone is a South Korean cryptocurrency exchange that supports Cardano and operates a node for the blockchain. It offers trading services for ADA and facilitates the participation of users in the Cardano ecosystem.
- Nexo: Nexo is a blockchain-based company that offers a range of financial services primarily focused on the cryptocurrency industry. The company operates as a crypto lending platform, allowing users to borrow against their Cardano as collateral. Nexo’s platform provides instant Caradano loans, enabling individuals and businesses to access liquidity without selling their Cardano currency.
- NOWNodes: NOWNodes is a blockchain infrastructure platform that offers node deployment and management services. It provides support for multiple blockchain networks, including Cardano, allowing users to manage nodes easily.
More complete list of companies that work with Cardano is published on Cardano’s official website or developer documentation.
How is the Cardano blockchain working?
The Cardano blockchain works through a decentralized network of nodes that collectively maintain the integrity of the blockchain. Here’s a simplified explanation of how Cardano works:
- Consensus Protocol: Cardano uses a proof-of-stake (PoS) consensus protocol called Ouroboros. In this protocol, instead of miners competing to solve complex mathematical puzzles (as in proof-of-work), validators, also known as stakeholders, are randomly selected to create new blocks and validate transactions based on the amount of ADA they hold and are willing to “stake” as collateral.
- Transaction Validation: When a transaction is initiated on the Cardano network, it is broadcasted to the network of nodes. Validators selected through the PoS protocol, collect and validate the transaction. They ensure that the transaction is properly formed, the sender has sufficient ADA balance, and the transaction adheres to the predefined rules of the blockchain.
- Block Creation: Validated transactions are bundled into blocks. In Cardano’s case, the blockchain consists of two main layers: the settlement layer (SL) and the computation layer (CL). The settlement layer handles the transfer of ADA, while the computation layer supports smart contracts and dApps. Each layer has its own set of nodes responsible for block creation and validation.
- Block Validation: For the settlement layer, the Ouroboros consensus protocol determines the node selected to create a new block. The selected node assembles the validated transactions into a block and includes cryptographic proof that attests to the validity of the block. Other nodes then validate the block by verifying the proof and the transactions within it.
- Block Propagation: Once a block is validated, it is propagated across the network, ensuring that all nodes receive and validate the new block. This process helps maintain consensus and ensures that all nodes have an up-to-date copy of the blockchain.
- Governance: Cardano incorporates a governance layer that allows ADA holders to participate in the decision-making process for protocol upgrades and improvements. ADA holders can propose and vote on proposals for changes to the blockchain, including protocol upgrades, funding decisions, and parameter adjustments. This mechanism ensures decentralized governance and the evolution of the Cardano blockchain based on community consensus.
- Smart Contracts and Applications: The computation layer of Cardano supports the execution of smart contracts and decentralized applications (dApps). Developers can build applications using Cardano’s Plutus programming language and deploy them on the computation layer. Smart contracts are executed and validated by the network of computation layer nodes, allowing for the creation of various decentralized applications and use cases.
This is a high-level overview of how the Cardano blockchain works. The actual implementation involves complex cryptographic algorithms, network communication protocols, and consensus mechanisms. However, understanding the fundamental concepts outlined above provides a basic understanding of the extreme success of the Cardano blockchain.