Cardano 101

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Cardano and (ADA) are two different concepts. Cardano is the blockchain where the asset ADA resides. ADA is the native asset on the Cardano blockchain. You use the Cardano blockchain to send and receive ADA.

  1. Cardano: the Blockchain
  2. ADA: the crypto asset

Cardano was founded in 2015 by Charles Hoskinson and Jeremy Wood. Hoskinson is a mathematician and co-founder of Ethereum. Wood was a founding member of the Kansai Bitcoin Meetup and an ops-manager for Ethereum.


ADA is a proof of stake asset. Ouroboros defines the way in which nodes come to a consensus about the state of the ledger. Its algorithm selects which nodes will become slot leaders. The slot leader generates new blocks on the blockchain, and verifies the transaction. Anyone holding ADA can become a stakeholder, and also become a slot leader. A slot leader publishes new blocks to the network when Cardano’s consensus algorithm selects ADA that you hold. A node is selected to generate a new block with the probability proportional to the amount of ADA the node has.

Let’s clarify this a bit more:

  1. If a node has any amount of ADA staked, you are a stakeholder.
  2. If a node gets chosen to mint a new block, you are a slot leader.

The more ADA you hold, the better the opportunity you have at becoming a slot leader, and a better chance at receiving more rewards. The more you hold, the better your chance. It’s as easy as that!

Cardano Development:

The Cardano blockchain has two layers.

  1. The Cardano Settlement Layer (CSL)
  2. The Cardano Computation Layer (CCL)
  • The CSL acts as a balance ledger and runs the transfer of ADA.
  • The CCL contains information on why transactions occur.

The second layer (CCL) runs Cardano smart contracts. Both of these layers separate the account values from the reason why the values are moved from one account to another. This separation provides more flexibility for the Cardano smart contracts. Users of the CCL can create rules to filter transactions based on the parameters set. This will become important as blockchain regulation continues to increase.

KMZ Sidechain protocol:

This is Cardano’s solution to interoperability between other blockchains. Cardano wants to accomplish this by implementing side chains. This would provide the capability to transfer assets between blockchains without middlemen, thus keeping your data secure. A very important step in the overall blockchain plan.

If you would like to dive deeper into Cardano and ADA please visit their official website:

The Cardano Whitepaper can be found here:

Cardano 101 was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

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