Understanding Cardano and ADA: More Than Just a Cryptocurrency

Discover the unique features of Cardano's blockchain and ADA, including proof of stake mining, dual-layer structure, and future cross-chain transfers.

Cardano and ADA are not the same thing.

Cardano is the blockchain, whilst ADA is the crypto currency that can be transferred in the Cardano blockchain.


But Ethereum does the same thing - what makes Cardano so special?

The answer is that it's not enough to simply say that ADA lives in the Cardano blockchain.

ADA is a Proof of Stake (PoS) coin that fuels Cardano in the concept that a person can mine or validate block transactions according to how many coins he/she holds.

The maximum supply of ADA coins that will ever be created is capped at 45 billion.

As of today (17 July 2020) the current circulating supply is 26 billion ADA coins.


Anyone holding ADA can become a stakeholder as well as a miner!

Basically if you hold the ADA tokens, you can create a block in the blockchain, there are no miners "above" you. The more ADA you hold - the higher your position would be in the Cardano blockchain, and the more rewards you would get from it (hint: miners do get a fee from every transaction that is taking place in the blockchain).

So basically, investors see this as an opportunity to hold more tokens and influence the Cardano blockchain - and this is something you won't find with Ethereum for example.


Cardano has 2 layers: CSL and CCL

The Cardano Settlement Layer (CSL) acts as the balance ledger and runs the transfer of ADA tokens.

The Cardano Computation Layer (CCL) contains information on why transactions occur. This is the layer that runs smart contracts.

Why is it important?

Because with the CCL users can create rules to filter transactions based on parameters they set - for instance exclude transactions that don't include identification data. As the blockchain regulation continues to increase this can be a vital solution for such concerns - e.g. allow exchange websites to process only transactions containing identification data.


Cardano's future - exchanging ADA to other crypto currencies without intermediaries

The Cardano team is working on a Cross-Chain transfer, a process where tokens are exchanged across different blockchains without using an intermediary party (e.g. without using Binance for example).

Many Crypto users have experienced hassles dealing with some shady exchange sites, so having to skip on the intermediary is definitely a positive step, however this specific goal is not complete as of yet.


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