What is Cardano?
Cardano is a third-generation, research-first blockchain built to be scalable, interoperable, and energy-efficient. It uses Ouroboros, a provably secure proof-of-stake (PoS) consensus protocol where ADA holders can run or delegate to stake pools that produce blocks and earn rewards. docs.cardano.org+1
How Cardano Works (in plain English)
- Consensus: In each time “slot,” the protocol selects a stake pool as leader to add a new block; delegators share in the pool’s rewards. cardano.org
- Smart contracts: Cardano’s contracts run on Plutus (Haskell-based) and the EUTXO model, which extends Bitcoin’s UTXO for predictable, parallel execution. Marlowe offers a simpler DSL for finance workflows. docs.cardano.org+2docs.cardano.org+2
Architecture at a Glance
- Settlement vs. Computation: Cardano separates value transfer from computation (often described as CSL & CCL) to improve flexibility and scalability. docs.cardano.org
- Networking: Nodes communicate over TCP/IP with a modular networking stack designed for reliability. docs.cardano.org
ADA Token & Monetary Policy
- Ticker: ADA
- Smallest unit: Lovelace (1 ADA = 1,000,000 lovelace) Figment
- Supply: Protocol enforces a fixed cap of 45 billion ADA (the “max_lovelace_supply,” a non-updatable genesis parameter). Rewards draw from reserves along a declining schedule. Cardano Forum+1
Key Innovations
- Ouroboros PoS: First peer-reviewed PoS protocol with formal security proofs. IOHK
- EUTXO + Plutus: Deterministic fees/behavior and strong correctness properties via functional programming. docs.cardano.org+1
- Hydra (Layer-2): Off-chain “heads” enable parallel processing and linear scaling; mainnet capabilities have been iterated since 2023 with ongoing 2025 improvements. levex.com+1
- Mithril: Stake-based multi-signatures that certify blockchain snapshots for fast, lightweight verification and sync. cardano.org+1
Governance: Toward Voltaire
Cardano’s governance is moving on-chain through CIP-1694, which defines decentralized decision-making structures (e.g., DReps, voting thresholds) as part of the Voltaire era. cips.cardano.org+2GitHub+2
Developer Ecosystem
- Languages & frameworks you’ll see: Plutus, Plinth (Plutus Tx), Aiken, Plutarch, OpShin, Marlowe.
- Official docs include quick starts, tutorials, and references for building dApps and tooling. docs.cardano.org+1
Common Uses for ADA
- Payments & fees: Pay transaction fees and interact with dApps.
- Staking & delegation: Secure the network and earn rewards.
- Governance (rolling out): Vote on parameter changes, treasury uses, and upgrades per Voltaire/CIP-1694. cips.cardano.org
Strengths & Trade-offs
Strengths
- Energy-efficient PoS with peer-reviewed foundations. IOHK
- Predictable smart-contract behavior via EUTXO & Plutus. docs.cardano.org
- Clear monetary policy with a fixed ADA cap. Cardano Forum
Trade-offs
- Functional-programming stack can have a learning curve. docs.cardano.org
- Layer-2 & governance features, while advancing, introduce moving parts and evolving tooling. levex.com+1
Further Reading (Primary Sources)
- Cardano Docs (overview & developer resources): docs.cardano.org. docs.cardano.org
- Ouroboros PoS (peer-reviewed paper): IOHK research library. IOHK
- EUTXO explainer: Cardano Docs. docs.cardano.org
- Plutus & Marlowe: Cardano Docs. docs.cardano.org+1
- Hydra progress & monthly updates: Cardano Scaling blog. cardano-scaling.org
- Mithril (stake-based signatures): Cardano.org blog & GitHub. cardano.org+1
- On-chain governance (CIP-1694): CIP spec & repo. cips.cardano.org+1
- Protocol/monetary references: Network parameters & supply distribution. docs.cardano.org+1
FAQ (quick bites)
Is ADA supply capped? Yes—45 billion ADA max, set at genesis (non-updatable). Cardano Forum
How do I participate in staking? Hold ADA in a supported wallet and delegate to a stake pool—no lockup or slashing on Cardano. Figment
What’s special about EUTXO? It brings deterministic, parallelizable smart-contract execution with clearer fee predictability. docs.cardano.org