Cardano: A Deep Dive into the Proof-of-Stake Blockchain

There are many interesting projects in the blockchain space. One of the most interesting projects to come out is Cardano. Similar to Ethereum, Cardano is a Proof-of-Stake (PoS) smart contract platform but differs because of its layered-architecture, offering scalability and security.

What makes Cardano even more exciting, is that it’s built on scientific philosophy and peer-reviewed academic research, conceptualized by Charles Hoskinson, who also happens to be one of Ethereum’s co-founders.

While Ethereum continues to play contender against DeFi, it is considered by Hoskinson to be a second-generation blockchain.

How It Works

Part of Cardano’s glamour is the amount of maintenance and upkeep it requires. There are three organizations that help maintain it, including The Cardano Foundation, IOHK, and Emurgo.

In 2015, Hoskinson, with Jeremy Wood, created Input Output Hong Kong (IOHK), an R&D company committed to using P2P innovations of blockchain to build accessible financial services for all. They have been contracted to help build, design, and maintain Cardano through 2020.

Cardano’s platform is comprised of two layers, the Cardano Settlement Layer (CSL) and the Control Layer.

CSL

The Cardano Settlement Layer (CSL) is used to settle transactions with the platform’s native cryptocurrency, ADA. Specifically, it serves as the balance ledger and is the primary layer of the program or platform.

An application of this is changing how data is stored and accessed, depending upon the nation or country’s laws.

CSL

The second layer, the Control Layer, is used for smart contracts.
So, how do the two-layers work together? Here’s an example:

1. John needs to hire an electrician to fix his kitchen lights.
2. John enters into a smart contract agreement that is stored on the computation layer.
3. The agreement states that as soon as the electrician has fixed John’s lights, the agreed funds will be released.
4. When this happens, the smart contract is transferred to the settlement layer, which allows the electrician to be paid in ADA cryptocurrency.
5. Everything is fully automated, meaning that there is no need for a third party.