What is Cardano and How Do I Trade It?

What is Cardano?

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*Updated 1/19/2018

What is Cardano?

The Cardano Project (aka “Cardano”) is a 3rd generation blockchain platform for smart contracts and a cryptocurrency called “ADA“.1

Cardano has capabilities similar to Ethereum, in that it is a decentralized, open source, blockchain platform for smart contracts for distributed application development, and also a cryptocurrency (aka a coin).

That’s pretty much where the similarities stop…

Why is Cardano Considered a 3rd Generation Blockchain?

The blockchain community was built on the concept of eliminating trusted third parties through distributed applications (dApps).

And, in the nascent blockchain economy, Ethereum has been called the “King of dApps“…

However, Ethereum is considered to be a 2nd generation blockchain (Bitcoin was the 1st), whereas Cardano is considered a 3rd generation blockchain.

Charles Hoskinson of Cardano

The “father” of Cardano, Charles Hoskinson, was formerly the CEO of Ethereum. As such, Charles has made it known that the objective of Cardano is to use the benefit of hindsight in developing the next evolution in blockchain platforms.

In this video, Charles describes how, with the added value of hindsight, the Cardano Project aims to be a 3rd generation blockchain solution to many of the limitations and challenges that have been attributed to Ethereum.

Cordano incorporates improvements to three philosophical first principles in blockchain technology:

  1. Scalability
  2. Interoperability
  3. Sustainability

More specifically, Cardano addresses scalability, interoperability and sustainability in the following ways2:

  1. Peer Reviewed: Cardano is being developed using a peer reviewed process. The peer reviewed process helps ensure that the code that runs Cardano is “high assurance code” that is verified as such through a methodical, even slow, engineering driven process.
  2. Layered Technology and Metadata: Cardano allows separation of transaction data from metadata to provide greater efficiency and flexibility in transactions based on their specific requirements. The resulting effect is a more efficient approach to managing bandwidth, transactions per second and data scale.
  3. Regulatory Considerations: Within the data layers described above, metadata can be made to fulfill regulatory transactional requirements, if any. Regulatory considerations are important to address for the purposes of increasing the velocity of transactions that could be processed by Cardano. Many regulatory bodies (rightly) require anti-money laundering (AML), know your customer (KYC) and anti-terrorism funding compliance.
  4. Treasury: Cardano solves the problem of supporting the platform and its development by funding a central “treasury” with ADA. 25% of all new block rewards that are issued to producers on the Cardano blockchain go into the treasury to maintain the platform.
  5. Governance Model: Decisions on changes to Cardano (either hard or soft forks) are made using an on-chain governance model where token holders can vote on proposed updates to the blockchain.
  6. Provably Secure Proof of Stake (PoS) Protocol: Cardano uses a Proof of Stake (PoS) algorithm, as opposed to a Proof of Work (PoW). The proof of stake algorithm on Cardano is called “Ouroboros“. 3
  7. Developer Experience: Extending from the governance model, Cardano aims to improve the experience for developers who wish to build dApps on top of the platform. Cordano is built in a derivative language of Haskell, a purely functional programming language.

Does Cardano Run on Ethereum? 

No. Unlike many cryptocurrencies/token platforms that are used for smart contracts, Cardano does not run on Ethereum.

Did Vitalik Buterin Found Cardano?

No. However, Charlie Hoskinson worked with Vitalik Buterin at Ethereum, before leaving to found IOHK which developed the technology for Cardano.4

Who Runs Cardano?

Cardano is a decentralized blockchain platform that is governed by peer review and consensus and is supported by three separate, distinct entities:

  1. The Cardano Foundation: The Cardano Foundation is a non-profit organization that provides education and transparency around the Cardano protocol and its road map for development. The foundation also provides a knowledge base on Cardano for the cryptocurrency community, businesses, institutions and governments.
  2. Input Output Hong Kong (IOHK): IOHK Is led by Charles Hoskinson and Jeremy Wood, the former CEO and Executive Assistant of Ethereum, respectively. Charles is the CEO of IOHK. IOHK is an engineering company that developed the initial Cardano technology. IOHK develops each component of the Cardano platform, including its protocol and wallet. FWIW, the IOHK.io website (below) is very cool…
  3. Emurgo: Emurgo is a Tokyo, Japan-based research and development company focused on incubating commercial blockchain ventures that use the Cardano platform.

IOHK homepage

Concerns About Cardano

Cardano is very promising as a 3rd generation cryptocurrency and dApp platform.

That said, the team acknowledges publicly that they are a year or so away from making their business plans a reality. The full Cardano roadmap is laid out in great detail and can be found here.

The structure of the Cardano organization and ecosystem is interesting from a business perspective because they’ve built important pillars (non-profit education, tech team and business incubator) for business growth, similar to how Ethereum was set up. This structure could be terrific long term. Indeed, the “non-profit” as trojan horse for business is a great business model…

Remember: Non-profits are always “for profits” in disguise…

For example, a great “non-profit” organization that is very much focused on making a profit for their managers is the U.S. Green Building Council (aks USGBC).

USGBC charges an arm and a leg for LEED, and other environmental certifications, to help buildings and other assets become “green”. This is a legitimate non-profit strategy that results in real business, and societal, benefit.

By being a non-profit organization, USGBC can court big business for paid memberships, a portion of which are tax deductible. Members then tout their environmental efforts through USGBC’s public education efforts, PR efforts, LEED building certification, participation in GRESB (the Global Real Estate Sustainability Benchmark – a USGBC affiliate), etc. Customers of the global businesses then feel better about patronizing them as their clients… And around it goes.

As such, Cardano could operate the same way.

At the moment, though, Cardano is essentially a one trick pony as a cryptocurrency called “ADA”.

How Do I Trade Cardano / ADA in the U.S.?

Based on the potential promise of cryptocurrencies, blockchain, and the compelling and thoughtful bedside manner of Charles Hoskinson describing the platform, it’s no perhaps no surprise that Cardano has had a major run up lately.

If you were in it only a few months ago, you could have had Cardano at around 0.10 cents… Now it’s hovering above $1.00.

Trade Cardano

To trade Cardano, visit the Cardano Hub page which lists the exchanges that list ADA, the cryptocurrency that runs on Cardano.

Unfortunately, the options to trade Cardano at the moment are few and far between.

The exchanges in RED below are not accepting new user registrations, and others have only partially English language websites, adding increments of risk to non-Korean speakers.

The exchanges that offer ADA trading are:

  • Binance (China; new user registration available) – Binance is relatively user friendly for U.S. crypto traders, even though it is translated from Chinese. I was able to successfully trade ADA on this site.
  • Bittrex (new user registration temporarily suspended)
  • Upbit (South Korea – non-English website; new user registration suspended — they won’t tell you this until you actually create your account… Which is pretty annoying.)
  • Coinnest (South Korea – partial English website)5
  • Cryptopia (coming soon)
  • BITT (coming soon)

So, if you’re in the U.S. and don’t speak Korean, or Chinese, you can use Binance.

Cardano recently had a major run up, however it has shed half its value in the past month. If you are interested and excited about trading Cardano6, like I am, you may want to try using Binance.

Just remember, with every bull run there’s a correction waiting to happen…

That said, and contrary to what Mr. Money Mustache says, if you are just playing around and you happen to be 100% FINE with losing all of the money you wager on cryptocurrencies, there’s no reason why you shouldn’t go ahead and have fun!

Footnotes

  1. TLDR: If you are new to trading cryptocurrencies, such as Cardano, the only place to trade it is on Coinnest, which is still accepting new users.
  2. For a longer explanation of each of the items below, read this helpful article on Hackernoon.
  3. Ouroboros is peer reviewed and is said to be the only Proof of Stake algorithm that is mathematically proven to be secure.
  4. Vitalik Buterin is the founder of Ethereum.
  5. As someone who lives in the U.S., I found this site is almost impossible to use. Registration and verification was ultimately not successful.
  6. Cardano is named for an Italian mathematician, Gerolamo Cardano.

One Thought to “What is Cardano and How Do I Trade It?”

  1. […] What is Cardano and How Do I Trade It? | Midlife Croesus – Unfortunately, options to trade Cardano at the moment are few and far between. What is Cardano?. LEED building certification, participation in GRESB. […]

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