What Is Cardano (ADA)?

Cardano (ADA) is a decentralized Proof-of-Stake (PoS) blockchain designed for global use by developers. Similar to Ethereum, Cardano's PoS consensus mechanism uses and rewards cryptocurrency for work done to review and expand the historical blockchain record.

The Cardano blockchain and project transitioned to its final phase in January 2025, becoming a system for decentralized applications (dApps) with multiple use cases governed by a community. The blockchain's cryptocurrency token is named ADA after Augusta Ada King, Countess of Lovelace, an English aristocrat commonly regarded as the first computer programmer. ADA can also be purchased on most maj📖or cryptocurrency wallets and cryptocurrency exchanges.

History of Cardano

Charles Hoskinson, an Ethereum co-founder who left the project due to disagreements with the direction of Ethereum, began developing Cardano in 2015 and launched the blockchain network, mining the first block in 2017.

The Cardano project considers itself an updated version of and has positioned itself as an alternative to Ethereum, anointing itself a “third-generation” platform compared with Ethereum’s “second-generation” credentials. Cardano also has a self-proclaimed goal of providing banking services to the 澳洲幸运5开奖号码历史查询:world’s unbanked.

The Cardano Foundation was established in 2017 to promote th๊e Cardano blockchain and its adoption. IOHK, an engineering company, is the primary developer behind the Cardano blockchain.

Hard Forks

Cardano labels its development and changes in eras, with hard forks generally marking the transition to a new name. Throughout its history, the Cardano blockchain has undergone ten notable 澳洲幸运5开奖号码历史查询:hard forks over seven eras: Byron, S💯helley, Allegra, Mary, Alonzo, 🔜Lobster, Vasil, Valentine, Chang, Plomin.

The Shellꦍey hard fork transitioned Cardano from a federated Byzantine Fault Tolerance (fBFT) consensus mechanism to a more decentralized PoS consensus mechanism called Ouroboros. The Alonzo hard fork enabled smart contracts on the Cardano blockchain for the first time, opening up the possibility for a wide range of dApps to be buiไlt on Cardano. The Vasil hard fork brought scalability upgrades to further improve dApp functionality, such as increased block size, improved transaction processing, and new scripting capabilities.

In September 2022, the Valentine upgrade occurred, causing another (planned) hard fork. The purpose of this update was to allow more efficient cross-chain applications to be built and add support for other protocols. Chang brought several decentralized governance features to the blockchain in September 2023, and Plomin enabled the remaining governance actions in January 2025.

Cardano vs. Ethereum

Both the Cardano and Ethereum blockchain platforms are used for responsive applications and aim to build a connected system similar to the Apple and Android stores, but decentralized. The most prominent features offered by Cardano and Ethereum to support dApps are their use of 澳洲幸运5开奖号码历史查询:smart contracts and a PoS blockchain algorithm. Cardano had a staking mechanism lo🔯ng b🦂efore Ethereum did, but Ethereum supported smart contracts before Cardano.

Smart Contracts

Cardano implemented smart contract support in 2021 with its Alonzo update. This update took place on Cardano's test network, a beta version of the blockchain, and was the first iteration of bringing promised scalability and interoperability to users.

Smart contracts allowed Cardano developers to create dApps such as 澳洲幸运5开奖号码历史查询:non-fungible tokens (NFTs) and manage multiple cryptocurre🅠ncy assets associated wit▨h these dApps.

Cryptocurrency Staking

Cardano uses a PoS consensus mechanism, in which users "stake" the blockchain's cryptocurrency for the opportunity to become a validator. A stake is a pledge of a certain amount of ADA cryptocurrency to represent and secure validator rights in the Cardano network. ADA cannot be used or spent while it is staked because it must be held as collateral to incentivize honest validation behavior.

Validators ope🦄n and finalize blocks of transactions and are rewarded with ADA from other validators based on the number of tokens they have staked. Users can participate in the validation process by creating or joining a pool, which can be public or private.

Staking pools consist of one or more trusted server nodes that conduct the work of validating transactions, updating the ledger, opening new blocks, and earning rewards. Public pool🍸s distribute rewards to members based on the amount of ADA they have staked. Private pools, as the name suggests, give rewards to the owners.

A Cardano staking pool must be run by an operator with the technical knowledge and skills to maintain the stake pool by renting servers, monitoring the node, holding the pool key, and conducting other pool administration tasks.

Cardano vs. Bitcoin

Bitcoin was developed as a peer-to-peer payment system, while Cardano is focused on foꦬstering a general blockchain ecosystem that allows developers to create other tokens, dApps, or any uses a scalable blockchain network can host.

The Cardano platform's PoS consensus mechanism relies on staking to validate transactions and reward cryptocurrency to validators, whereas Bitcoin's PoW relies on 澳洲幸运5开奖号码历史查询:cryptocurrency mining. Cardano's PoS expends drastically less ene🐻rgy than Bitco♎in's PoW by removing the need to have computers gobbling up large amounts of electricity to power complex mining processes.

Cardano's PoS consensus mechanism also makes its validation process more accessible to the average user than Bitcoin's PoW. Cardano staking can be done simply by installing compatible wallet software on computers or devices. Bitcoin mining can also be done this way, but it is not very efficient, even if it is done through a pool, which is the least commitment-intensive option for mining.

Future of Cardano

Cardano has been developed in "phases" named after notable figures in poetry and computer science history (phases are one step higher than eras): Byron, Shelley, Goguen, Basho, and Voltaire.

Voltaire, Cardano's final era of development, was finalized in January 2025, creating a self-sustaining system where proposals, voting, and treasury management are governed by blockchain participants.

The blockchain and ecosystem's future lies in the hands of its community. Developers have proposed projects to continue making improvements to the blockchain and network, such as scalability, new protocols, application programming interface services, and more. As of June 2025, the project's future is in the hands of its users.

The Bottom Line

Cardano is a decentralized PoS b🐟lockchain founded in 2015 and launched in 2017. It has positioned itself as an alternative to PoW blockchains like Bitcoin because it is more energy-efficient, scalable, and more useful as a development platform.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our 澳洲幸运5开奖号码历史查询:warranty and liability disclaimer for more info. As of the date this article was written, the author does not own cryptocurrency.