Cardano Review by FIMA Plus Company

1. Overview

Cardano is a smart contract platform that started in 2015. It uses a decentralised public blockchain, cryptocurrency ADA and the whole project is fully open source. It is the first blockchain project to emerge from a scientific philosophy built by a global team of leading academics and engineers. Cardano focuses to become a technological platform that will be capable of running decentralised – blockchain financial applications used every day by individuals, organisations and governments. Cardano will combine privacy and regulation in order to balance both needs of users and regulators. Also, one of the goals is to use blockchain technology and bring it to banking systems in third world countries.

Cardano uses programming language Haskell, which is a general-purpose compiled, purely functional programming language, with non-strict semantics and strong static typing, according to the team. Ouroboros Proof of Stake Algorithm is used as a blockchain protocol. The reason why they chose Proof of Stake (PoS) algorithm is because Proof of Work (PoW) is very expensive and large amounts of electrical energy are being wasted. PoS functions in a way that a node which ”stakes”, i.e. holds a positive amount of coins and becomes a stakeholder that generates (mints) a new block with a probability proportional to the amount of coins this node holds. When a node is elected to mint a new block, from stakeholder it becomes the slot leader who signs this block with its secret key and publishes it to the network. In the Ouroboros protocol the physical time is divided into epochs and each epoch is divided into slots. A lot of terminology regarding Cardano, very often makes investors confused, but as it is stated before, scientific philosophy is behind the development.

Cardano platform is being constructed in two layers, to separate value from computation. Layers give the system the flexibility to be more easily maintained and upgradable. Cardano Settlement Layer (CSL) is the first layer and runs cryptocurrency Ada. Second Layer called Cardano Computation Layer (CCL) will be built to handle smart contracts, the digital legal agreements that will underpin future commerce and business.

Cardano will also support KMZ (Kiayias, Miller and Zindros) side chains, which is a new protocol that allows for the secure and non-interactive movement of funds from CSL to any CCL or other blockchain supporting the protocol.

Cardano wants to achieve true scalability which means as more users join, the capabilities of the system increase. As a example we can take common goal of sharing files with BitTorrent protocol. If you familiar with it, then you know that download is much faster if more peers are concurrently downloading it. The speed increases because the peers provide resources while also consuming them, and this is characteristic what describes fact written above about  distributed system scaling.

Daedalus is an official, secure, multi-platform, HD (hierarchical deterministic) wallet created by Cardano team. Currently, it only supports Ada cryptocurrency, but the team behind the wallet announced that they are in the process of building new features, such as support for Ethereum Classic and Bitcoin, mobile wallet for Android and iOS and also staking.

On July 30, 2018., Cardano Foundation launched its IELE Testnet virtual machine. IELE Testnet was launched exactly 2 months after the launch of first Testnet named K-EVM. K-EVM lets the developers test any smart contract that runs on Ethereum Virtual Machine [EVM]. The IELE Testnet has been developed to improve the performance of Cardano’s IELE virtual machine and it is the next step in the Cardano roadmap for smart contract development, that will allow developers to learn and develop skills before launching their programs on the Cardano mainnet. IELE virtual machine offers a more robust and reliable infrastructure for the creation of smart contracts. Developers who write smart contracts in Solidity on the Ethereum virtual machine will be able to test the same contracts on the IELE testnet. This is achieved using a “correct by construction” compiler that translates Solidity code into IELE. The IELE virtual machine ecosystem will eventually include compilers that facilitate the use of other high-level programming languages.

 

2. Use Cases

  • In May 2018, Cardano has partnered with Metaps Plus, a Japanese-owned, but South Korean-adopted mobile payments platform which will make ADA acceptable as a payment method in over 33,000 offline stores and promotions around Q3 2018
  • In May 2018 the Ethiopian government has signed a memorandum of understanding with Cardano. Ethiopian developers expect to start using an agritech platform based on Cardano’s blockchain by the end of 2018. The partnership between Cardano and the Ethiopian Ministry of Science will help coffee growers prove the source and purity of their coffee beans. Additionally, a study will be conducted to evaluate how tracking coffee throughout the supply chain affects its growing, harvesting, roasting, and wholesale life cycle. The project also aims to cut down on fraud and to make land registry more transparent.
  • At the start of 2018, GRNET, the national research and education network of Greece, started working on a pilot project with IOHK to verify student diplomas on Cardano blockchain. The GRNET app will be built on Enterprise Cardano, a private or permissioned ledger version of Cardano. Unlike a public blockchain, where anyone can join in and participate, a private blockchain allows only a restricted set of users to validate block transactions. Putting diplomas on a blockchain takes the paperwork out of the process and makes it easy and simple to check if someone holds a degree. In order to protect student privacy, instead of putting an entire diploma on the blockchain, GRNET plans to put only a cryptographic hash of a diploma on the blockchain.

3. Team

Unlike many other crypto projects, there are three core organisations that are contributing to the development of Cardano:

 

 

All three organisations share the same vision but contribute in different ways.

a) The Cardano Foundation – an independent standards body based in Switzerland with core responsibilities to support the community of Cardano users and to work with authorities on regulation and promoting Cardano as a platform for commercial entities and serving as an objective organization for enterprises interested in joining Cardano.

Most prominent team members:

Michael Parsons (FCA) – has over 25 years of experience as an executive and consultant in the banking industry, with a strong emphasis on technological innovation. He currently serves as the Chairman and Executive Director of the Cardano Foundation, which promotes and supports the new Cardano blockchain protocol.

Tom Jelly (Marketing & community manager) – is an experienced marketing professional, with a background focused on growing technology businesses from the ground up. He graduated from Oxford Brookes University with a degree in Business Innovation & Enterprise. Previously Tom was Marketing VP at Busy Rooms, a software company which optimizes revenue for the global hotel industry.

 

b) IOHK – a leading cryptocurrency research and development company which works on both projects Cardano and Ethereum Classic. It is an engineering company that builds cryptocurrencies and blockchains for academic institutions, government entities and corporations. Also it holds the contract to develop Cardano platform until 2020.

Founders:

Charles Hoskinson – Colorado based technology entrepreneur and mathematician. He attended University of Colorado, Boulder to study analytic number theory in graduate school before moving into cryptography and social network theory. His professional experience includes work with NoSQL and Big Data using MongoDB and Hadoop for several data mining projects involving crowd-source research and also development of web spiders. He is perhaps best known as one of the cofounders of Ethereum (with Vitalik Buterin), and former CEO of Ethereum. In 2015 he partnered up with the Cardano Foundation and founded IOHK as a contract team to develop the Cardano protocol up until 2020. He has assembled a team of distinguished academics and doctorates, scientists, businessmen, technical specialists, and software engineers from all over the world to develop a truly scientific approach rooted in philosophical fundamentals inherent to the blockchain community.

Jeremy Wood – Studied arts at Indiana University-Purdue University Indianapolis. After leaving Ethereum, Jeremy consulted on cryptocurrencies before starting Input Output with Charles Hoskinson in 2015. Jeremy believes that the future of fintech will progress only through experimentation and research, and by promoting collaboration between diverse groups and organizations.

 

c) EMURGO – was founded in 2017 and is a registered company in Japan. They develop, support, incubate commercial ventures and help integrate these businesses into Cardano’s decentralized blockchain ecosystem. Cardano seeks to power the financial stack for the developing world, and EMURGO’s mission is to help these economies emerge through blockchain technology.

Ken Kodama (CEO) – In 2014, Kodama started his career as a certified financial planner and provided life planning consultation and financial products. That year, he saw a great potential in Bitcoin and began promoting cryptocurrency. Then he embarked on the Cardano project with Michael Parsons and Charles Hoskinson, working on business development and promotion. Kodama founded and became CEO of EMURGO in 2017. He has a wide range of relationships with both domestic and international entrepreneurs – blockchain experts.

Pros

a) Proof of Stake (PoS) Validation which reduces energy consumption comparingly to Proof of Work (PoW)

b) Open-source development

c) Strong and skilful team supported with three organizations, Cardano Foundation, IOHK and EMURGO

d) Trying to make atomic swaps easier and to remove the need for exchanges

e) Quantum resistant signatures in development

 

Cons

a) Slow development of project which makes platform still unproven & untested

 

Potential risk Project Transparency Token Liquidity Project Development Marketing and PR Decentralization**

4

5

4

3

2,5

2

Overall Score*

3,5

Potential risk Project Transparency Token Liquidity

4

5

4

Project Development Marketing and PR Decentralization**

3

2,5

2

Overall Score*

3,5

*1 – Very bad / 5 – Excellent
*Decentralization makes the Overall Score look bad, but we are looking forward for further steps in decentralization process with protocol upgrade

 

UPDATES:

16/08/2018 – Icarus launched > thanks to this project, developers will be able to build lightweight wallets for Cardano on browsers and mobile devices. This is a step forward to make ADA token more accessible. Customized third-party wallets with simple installation mean that users will have an easier time purchasing with ADA, while merchants and businesses gain opportunity to integrate wallet services into the browser.