Cardano is a blockchain platform which provides safety and secure value transfer for both individuals and businesses. In its core, it is a smart contract platform much like Ethereum. But on the scale of decentralization Cardano wins the game by comparing to Ethereum, this article explains the variance of its mechanisms with other blockchains.

Cardano is the world’s first peer-reviewed blockchain. This means that it needs approval from its community even before updating its own protocol mentioned in their whitepaper. The network claims that they are the third generation blockchain platform by solving the scaling and interoperability problems, which bitcoin and Ethereum failed to solve.

As mentioned by Charles Hoskinson, the founder of the project, the platform was structured by researchers and scientists from various top universities. The interesting part is the project named after the 16th-century mathematician Girolamo Cardano.

How is it different from other projects?

In other blockchain platforms, each node carries a copy of the blockchain, despite having an entire blockchain running on the node. Cardano uses a different approach to solve the three main issues of blockchain – scalability, interoperability, and sustainability.

Let’s discuss about what scalability and interoperability are

Scalability: Is a ability of the system to expand.

Interoperability: The ability of the system to exchange and make use of the data with other blockchains

Speed: The ability of the network to transact at a fast rate

To counter this issue, the protocol uses a special proof of stake mechanism called Ouroboros. It is a mechanism designed by IOHK (Input Output Hong Kong, the holding company), which employs a first principles approach driven by peer-reviewed academic research to build the network from the ground up.

Ouroboros consensus algorithm helps in selecting the stream on the chain, under which various nodes are created. These selected nodes are very important compared to other nodes on the network as they are responsible for handling other nodes. These nominated nodes can securely verify and validate the transactions that happen on the blockchain, and they are called slot leaders. This particular principle helps the Cardano blockchain in scaling issues.

To handle the bandwidth inside the blockchain, the platform uses a special network protocol called RINA – Recursive Internetworked Architecture. RINA protocol works like a TCP/IP protocol which provides a faster way for the aforementioned slot leaders to communicate with their child nodes. This network architecture assists it to solve interoperability issues.

Cardano Working Model

Ouroboros is different from other energy consuming mechanisms like proof of work and traditional proof of stake. It aids particularly in resolving the scalability problem on the platform. Moreover, the significant point is Cardano also can access sidechains which are linked to other ledgers.

The foremost layer of the platform is called CSL – Cardano Settlement Layer.

CSL is the stable ledger for its blockchain. Cardano layer uses a scripting language to move a set of values in the chain because this style of a programming language is better for problem-solving compared to procedural programming.

Let’s dive into how technically Cardano works

Ouroboros is the proof of stake mechanism in Cardano,

English synonym of Ouroboros – The ancient symbol of a serpent eating its own tail.

Remember this synonym which will help you understand the mechanism easily.

At first, Ouroboros looks for the distribution of tokens in the ecosystem by choosing a random number. Post this, the mechanism divides the domain into epochs.

Epochs: A particular period of time in history.

In the mechanism, each epoch is divided into slots and the time span of these slots is only 20 seconds.

What is Cardano Blockchain? Step-by-Step Guide
Image Source: Cardano Docs

Here ouroboros mechanism randomly chose the slot leader.

Once the process is done each slot is allocated with slot leaders.

What is Cardano Blockchain? Step-by-Step Guide
Image Source: Cardano Docs

After this step, the mechanism works just like the Proof of Work mechanism. The slot leader acts as a miner; they are the ones who are responsible for validating the block and adding it to the chain. However, they can add only one block

What is Cardano Blockchain? Step-by-Step Guide
Image Source: Cardano Docs

And this is how the block gets validated in the network with the help of the slot leader.

Let’s see what happens to the validation, in case a slot leader misses the chance?

As explained above this mechanism gives a lot of importance to Slot leaders. To be qualified as a slot leader one must own 2% of stake in Cardano. These slot leaders are called electors in the network. Interestingly they are the ones who elect the slot leaders, which works like a loop. In other words, the mechanism works like a snake biting his own tail. (I hope you remembered the meaning) 

In case a slot leader fails and missed the chance to solve to confirm a particular block, this leads a slot leader to completely miss the opportunity. This node will have to wait a while before becoming a leader again. This is because the mechanism chooses the slot leader randomly. By this, Cardano ensures that even a powerful slot leader with a large amount of stake considered equally in the network.

These decentralized ideals come directly from Charles Hoskinson, who’s also one of the co-founders of Ethereum.

Images source: Cardano

Cardano foundation is the team of IOHK and Emurgo, blockchain training academy. As mentioned on their website, this partnership will last for the next 5 years. Once they make the blockchain completely decentralized, Hoskinson and IOHK team will move to a different blockchain project.

Currently, it is still in its primary stage and has a lot of major decisions ahead.

Learn more about Cardano here

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