The Cardano Technology

 Introduction 

This article my beloved Crypto peasants is going to do a deep dive to Cardano impressive technology, a true ETH killer. Cardano according to my insanely sophisticated view and understanding is here to stay and in the long run, take over Eth. 

Cardano is the blockchain platform for true change makers, innovators, and visionaries, with the tools and technologies required to create possibility for the many, as well as the few, and bring about positive global change.

For those who’d like to learn a little more about Cardano prior to reading this report, here are some primary links:

• docs.cardano.org
• cardano.org news
• adaex.org
• static.adapools.org

Note: This article might get updated, so stay tuned, and is meant to provide a holistic overview of Cardano.

Fundamental Analysis/ Metrics

Below we can see some fundamental analysis basic metrics:

 

Name: Cardano

Ticker: ADA

Token Type:  Run on its own chain

Validator Method: PoS

Platform:  Cardano

Category: Large cap

Transactions Per Second: 1000 TPS

Consensus Mechanism:  PoS

Sector (Use cases): N/A 

Exchanges:  See Link

Head Quarters (HQ):  Switzerland 

Number of employees:  49 (From Linkedin Insights)

Two year growth: 145% (From Linkedin Insights)

Company year founded:  2016

Crypto currency use case: N/A the Cardano foundation does not specialise in a specific use case. since this is a Smart Contract chain.

The Cardano cryptocurrency is managed by the Cardano foundation and its HQ is in Switzerland (a decent place for a tech startup). The most impressive part is that Cardano has an employee growth , based on the Linkedin Insights, of 145%. The company behind Cardano is Input Output (IOHK) a research and development company in the field of cryptography and distributed systems. Since IOHK was founded in 2014 it has been involved blockchain research, building a global team of cryptographers and researchers (a headcount of 216 employees).  

Below we can see the headcount distribution growth per function (in Cardano foundation): 

The company employee ratio, based on speciality seems to be well balanced (in Cardano foundation):

As shown above the foundation does have personnel for Marketing and Community Social Services. The foundation seems to know very well how to attract  a big user space (its related personnel for this purpose is 58%). 

Cardano Foundation Restructure

The team initially included three conglomerates which held 5.18 billion ADA between them. Emurgo company which aimed to develop, support, and incubate commercial ventures; and Input Output Hong Kong (IOHK), founded in 2015 by Charles Hoskinson and Jeremy Wood. IOHK also works on Ethereum Classic development and focuses on research and development in cryptography and distributed systems.

In October 2018, IOHK released a detailed blog post explaining several issues IOHK and Emurgo have had with the Cardano Foundation, including lack of strategic vision or plan, lack of transparency regarding operations, and misrepresentation of the Cardano trademark. Several members of the Cardano Foundation have since been replaced after restructuring in December 2018 [5].

Launch Overview

Cardano was conceptualised back on 2016 by Charles Hoskinson as a come back for the Ethereum hard fork due to the DAO hack, a decentralised blockchain and cryptocurrency project based on peer-reviewed research using the Haskell coding language. The story began in 2015, with a vision of addressing the three strategic challenges facing all blockchain networks: scalability, interoperability, and sustainability. Cardano ICO was conducted 2 Jan 2018. At the $ 1.49 ATH price on 27 Feb 2021 investors were able to sell this position with 74.48x ROI in USD [4].

Circulating Supply: 31,948,309,441 (71%)

Max Supply: 45,000,000,000 (This could change in the future)

Market Cap Dominance: 2.18%

Market Cap: $40,603,302,243

ATH: 1.49 (27 Feb 2021)

Cardano Partnerships 

The Cardano Foundation has the core responsibilities of helping, overseeing, and supervising the development of Cardano and its blockchain ecosystem. 

The following partnerships were achieved, with this goal in mind [7]:  

• IBM Research on January 17, 2020
• PwC on January 27, 2020
• New Balance on September 30, 2019 
• COTI Network on October 31, 2019
• SIRIN LABS on February 14, 2018
• Ellipal Hardware on July 3, 2019
• Konfidio on August 15, 2019
• Algoz on June 26, 2019
• Metaps Plus on May 10, 2018
• Z/Yen Group on December 5, 2017
• Priviledge on January 24, 2020
• ScanTrust on January 21, 2020
• Runtime Verification on December 18, 2017
• South Korea Government-Approved Trade Associations on August 20, 2019
• Ethiopian Government on April 30, 2019
• Georgian Government on June 17, 2019
• Edinburgh University on February 24, 2017

Cardano Social Media Presence 

Below we can see the most popular communication channels for learning more about Cardano:

Twitter followers: 318.5K Followers

Telegram (Announcements): 50 359 members

Telegram (Community): 37894 members (4463 online)

Cardano Forum: Reasonable Active

The Telegram community is active and healthy (e.g. members do not exchange cooking recipes etc.). Cardano has multiple Telegram channels.

Cardano Roadmap

The Cardano roadmap is a summary of Cardano development, which has been organized into five eras [3]: 

1. Byron - 
• Introduced the Ouroboros staking protocol.
2. Shelley -
• Introduced delegation and incentives scheme.
3. Goguen - 
• Introduced Marlowe and Plutus (a high-level, domain-specific languages for businesses), along with fungible and non-fungible tokens.
4. Basho - 
• Introduced parallel accounting styles(aka. sidechains)
5. Voltaire -
• Introduced treasury systems (aka. DeFi like functionality)

Each era is centred around a set of functionalities that will be delivered across multiple code releases. While the eras of Cardano will be delivered sequentially, the work for each era happens in parallel, with research, prototyping, and development often in progress all at once across the different development streams [3].

For more information see the following video:

Cardano Wallet 

Cardano has released two wallets Yoroi and Daedalus. Daedalus is an open source wallet for ADA, and supports most major desktop operating systems such as Windows, macOS, and Linux. Daedalus is built with web technologies on top of Electron. 

It is also important to mention that DAEDALUS [13]:

• Is a full node wallet. This means that Daedalus downloads a full copy of the Cardano blockchain and independently validates every transaction in its history. 
• Also allows theme customisation for the user.
• Has newsfeed that delivers news to Daedalus users directly via the user interface.

Yoroi is a light wallet for Cardano, developed by EMURGO [12]. Yoroi is a Firefox, Chrome and Edge Browser extension. But also come as an Android and IPhone client. In the Google Play Store Yoroi has a 4.6 out of 5 rate and 100,000+ installs. Also the IPhone version has 4.7 out of 5 rate in the Apple Store and 217 Ratings.

Cardano User Structure

Typical Cryptocurrencies such as Bitcoin and Ethereum have different types of user base. For example Bitcoin has the developers maintaining the Bitcoin network, the miners, securing the network and the users buying Bitcoin (e.g. supporting the financial ecosystem etc.). Same think happens with Ethereum, but slightly different, because the Ethereum has two type of developers those who maintain and improve the network, just like Bitcoin and those who maintain and create Smart Contracts, increasing the Ethereum use cases. Cardano by adding the Goguen network is increasing the ecosystem complexity and create five type of users, the developers maintaining the network, the developers writing smart contracts, the subject matter experts (that do not know how to code), the miners securing the network (through staking) and the users buying the token.

Below we can see the evolution of the cryptocurrency ecosystem:

     

Cardano Staking

ADA held on the Cardano network represents a stake in the network, with the size of the stake proportional to the amount of ADA held. The ability to delegate or pledge a stake is fundamental to how Cardano works [1]. In Cardano we can run private or public staking pools, and a calculator is provided to assess the rewards.

Below we can see a screenshot from the Cardano calculator:

Below we can see how the staking mechanism rewards the stakers: 

Cardano Architecture 

This section describes a high-level architecture of Cardano. It provides details on the core components and their interactions, and briefly discusses Cardano’s eras and implementations. The current implementation of Cardano is modular. 

It includes the following components (different deployment use cases will use different combinations of components):

• Node
• Command line interface (CLI)
• Daedalus wallet
• Cardano db-sync
• GraphQL API server (Apollo)
• REST API components
• SMASH server

Below we can see how the different components are connected:

 

Note: For more information on the Cardano documentation, refer to the relevant links [1]. 

Cardano Repository/Code Assessment 

The Cardano repository is frequently updated with excellent documentation. The code looks clean (code coding style), with self explanatory comments. The programming language used to develop the technology is Haskell (Haskell is the main programming language , not the only one). Haskell is considered to be an advanced, purely functional programming language, designed with emphasis on fault tolerance. In layman's terms Haskell allows for the code to be easily verified, and become less error-prone [10]. 

Note: Also Haskell cannot easily be used to for large scale programming and the talent pool is restricted, becoming a problem in the long run for large scale developer adaptation. It is also understood that this type of programming language will attract people from the academia (e.g. universities, such as Phd students and researchers) and not the commercial market, that is adopted into solving real world problems. 

Cardano Security Considerations

Cardano has undergone an independent source code audit (of Phase 1 that includes the Byron epoch) by a respected company named Root9B. The IOHK team wanted to reassure users that Cardano is a secure protocol [8].  Root9B was founded in 2011 as Root9B Technologies, the company touted itself as an IT security training firm staffed by an impressive list of ex-military leaders with many years of cybersecurity experience at the DoD and NSA.  But later on, the company, due to bad marketing, received some really negative publicity about, potentially manipulating its own stocks and that led to the company closing  [9]. 

The output of the reports can be found here: github.com. The most important finding was Insecure Genesis Block Generation (which is related with the randomness of the block generation), the issues identified were remediated and verification document was produced by Root9B to confirm that.

Below we can see the report extract about the single Critical vulnerability identified:

Note: It does worth mentioning that there were also identified some other interesting such potential Denial of Service attack etc.

At this point it should be mention that from a quick view in the Cardano repository, it seems that the Cardano team does take into consideration, newly identified security vulnerabilities as the development is progressing.

The screenshot below shows that [11]:

   

Conclusion

Finally after all this analysis the time has come to say my opinion on what is the verdict outcome. Below you can see the pros and cons based on the information collected:

PROS:


Here are my pros about Cardano:

• As far as their business/social presence is concerned from me gets an 9 out of 10. Well designed site, clear businesses goals, strong community, good partnerships.
• As far our their technology is concerned from me gets a 9 out of 10. The technologies are carefully chosen and well designed.  
• As far as the token economics is concerned I will give it a 7 out of 10. The coin inflation is good and incentives staking to secure the network.
• The Cardano team has a strong academic background and might make the Cardano goals non realistic.

Very well designed stacking mechanism and decent reward systems, this is a 9 out of 10 staking technology.

CONS:

Here are my cons about Cardano:

• Cardano is making use of Haskell, and because of that, the developer adaptation is going to be difficult. 
• Cardano has prolonged the mainnet release for the sake of quality too long (or maybe not).

Total score is: 8 out of 10 for long term investment and a 7 out of 10 for short term.

References:

• cardano.org [1]
• adaex.org [2]
• roadmap.cardano.org [3]
• cryptorank.io [4]
• bravenewcoin.com [5]
• www.publish0x.com [6]
• www.publish0x.com [7]
• cardanojournal.com [8]
• krebsonsecurity.com [9]
• why.cardano.org [10]
• github.com [11]
• yoroi-wallet.com [12]
• daedaluswallet.io [13]