Introduction
A blockchain is a shared record of transactions that many independent computers keep in sync. Nobody needs to trust a single company to keep the record honest. Cardano is one such public blockchain. Its native currency is ada.
How it works
- Cardano uses proof of stake (its protocol family is called Ouroboros). Instead of burning electricity like proof-of-work mining, blocks are produced by stake pools, chosen in proportion to the ada delegated to them.
- Time on Cardano is divided into epochs of 5 days.
- Anyone holding ada can delegate it to a stake pool to help secure the network, without giving up control of their ada (see the staking lesson).
- Cardano is governed on-chain: ada holders, Delegated Representatives (DReps), stake pool operators and a Constitutional Committee vote on governance actions under the Cardano Constitution.
Ada holder → delegates voting power → DRep → votes on governance actions
Example
Amara in Nairobi sends ada to her cousin in Colombo. Her wallet builds a transaction, a stake pool includes it in a block within seconds to minutes, and both wallets show the updated balance. No bank sits in the middle, but a small network fee is paid in ada.
Common mistakes
Thinking "Cardano" is a company. Cardano is a network. Organisations such as the Cardano Foundation, Input Output and Intersect contribute to it, but none of them owns it.
Believing anyone who promises guaranteed returns. Cardano itself never promises profits. Treat such offers as scams.