Cardano is a third generation blockchain platform launched in 2017 that aims to be a decentralized application platform. It uses a proof-of-stake consensus protocol called Ouroboros to validate transactions and mint new coins. Cardano has five development phases focused on decentralization, smart contracts, scalability, and governance. It differs from Bitcoin and Ethereum in its research-first approach and use of proof-of-stake over proof-of-work. Potential use cases for Cardano include education, agriculture, government, finance, and healthcare.

1. Cardano-
The Third Generation Blockchain
Technology
Presenter: Rashila Shrestha
Dec 2022

2. Outlines
1. Overview
2. Introduction
3. Five Phases of Cardano
4. How Cardano Ada works?
5. Ouroboros
6. Proof of Stake vs Proof of Work
○ How Cardano differs from bitcoin and ethereum?
7. Primary Use Cases
8. Future of Cardano
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3. Overview
● Cardano is a blockchain platform that was founded in 2015 by Charles Hoskinson. It was launched
in 2017.
● Cardano aims to be a decentralized application (DApp) development platform with a multi-asset
ledger and verifiable smart contracts.
● Cardano runs on the proof-of-stake Ouroboros consensus protocol.
● The primary cryptocurrency of Cardano is called "Ada."
○ Ada is used in the blockchain's PoS consensus mechanism.
● Cardano oversight is decentralized and shared by the Cardano Foundation, IOHK, and EMURGO.
Fast Fact:
"Ada" is Cardano's digital currency and is named after Augusta Ada Lovelace, a 19th-century countess
and English mathematician recognized as the first computer programmer.
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4. Introduction
● Cardano is a decentralized 3.0 proof-of-stake blockchain platform.
● It is the first blockchain platform to evolve out of a scientific philosophy and a research-first driven
approach.
○ Developers will be allowed to build DApps running on Cardano blockchain.
● It is built to overcome existing problems of other types of blockchain.
● Cardano has been designed with security as one of its founding principles.
● It is written in Haskell, a functional programming language.
○ Design components are conveniently testable in isolation.
● It is a fully open source project that aims to deliver an inclusive, fair, and resilient infrastructure for
financial and social applications on a global scale.
Primary Goal: To bring reliable, secure financial services to those people who do not currently have access.
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5. Five Prominent Phases of Cardano
● Byron:
○ It is the very first phase involves transferring of ADA
● Shelley:
○ This phase directed towards decentralization in 2020
● Goguen:
○ Functional smart contract roll out on this update
● Basho:
○ It focuses on scalability and interoperability
● Voltaire:
○ In this phase, the treasury system is incorporated
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6. Cardano Blockchain Architecture
● Cardano Blockchain consists of two core components:
○ The Cardano Settlement Layer (CSL)- acts as a unit of account
■ place where token holders can send and receive ADA instantaneously with minimal
transaction fees
○ The Cardano Computational Layer (CCL)- is a set of protocols
■ backbone of the blockchain, and helps to run smart contracts, ensure security and
compliance
■ allow for other advanced functionality, such as blacklisting and identity recognition
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7. How does Cardano (ADA) work?
● Cardano works on a specially designed proof-of-stake (PoS) blockchain
protocol for consensus called Ouroboros.
● This consensus mechanism allows for ADA to be sent and received easily and
securely at all times.
● It ensures the safety of smart contracts on the Cardano blockchain.
● Ouroboros provides rewards to token holders who stake their ADA to the
network and help ensure network consensus.
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8. ● The Ouroboros process goes like:
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9. ● The network randomly selects a few nodes to have the opportunity for mining new blocks. These
nodes are known as slot leaders.
● The blockchain is split into slots, each of which is called an epoch.
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10. ● Slot leaders have the ability to mine their specific epoch, or subpartition of an epoch. Any
participant who helps mine an epoch or part of an epoch receives a reward for their services.
● An epoch can be partitioned infinitely.
○ This means that the Cardano blockchain is, in theory, infinitely scalable, making it
possible to run as many transactions as needed without hitting a bottleneck.
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11. Ouroboros
● Ouroboros, the kind of Proof- of-Stake consensus algorithm that runs on the
cardano software that validates transactions, minted ADAs and promotes
network security.
● It is divided into epochs and slots.
● Epochs are categorized as time frames whereas slots are sections of
increments within epochs. Slot leader are responsible persons for the addition
of blocks.
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12. Ouroboros contd..
● The greatest benefit of Ouroboros is its mathematical security in choosing blockchain
validators.
● Other blockchains claim that they choose block validators at random, but these claims
cannot be verified.
● Ouroboros offers a provable way to randomly select a validator.
○ ensure that all token holders who stake ADA to the Cardano blockchain have a fair chance of
mining a block and receiving the associated reward.
● This eliminates any need for excessive computational power prevalent in proof-of-work
(PoW) blockchain networks
● It guarantees an objectively fair staking model that is not found in any other PoS
blockchain protocol.
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13. Proof of Stake vs Proof of Work
● Two major consensus mechanisms that cryptocurrencies use to verify
transactions.
● Proof of work, used by Bitcoin, requires users to solve complex cryptographic
puzzles before they are added to the blockchain.
○ This is also known as cryptocurrency mining.
● Proof of stake, is more energy-efficient because it does not rely on crypto
mining.
○ Instead, it relies on multiple random validators to agree that a transaction is accurate before
it is added to the blockchain.
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15. Cardano Staking
● In Cardano’s PoS system, staking determines a node’s capability to open blocks on
the blockchain.
● A node’s stake is equal to the amount of Ada it holds over the long term.
● A stake is an interest held by a pool participant, secured with Ada that is pledged.
● Pledged Ada cannot be used or spent by the holder because it is held as collateral
for honest validation behavior.
● Users with pledged Ada are given rewards in the form of transaction fees.
● The rewards are distributed according to the amount of Ada a user has staked.
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16. How CARDANO differs from Bitcoin and Ethereum?
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17. Cardano Use Cases
● Cardano calls itself the third-generation cryptocurrency.
● It solves the scaling and infrastructure problem that first appeared in bitcoin, the first-
generation cryptocurrency.
● It also solves the problem of high fees and the problem of slowing down the network
during high-volume transactions.
● How is it used?
○ The Cardano blockchain can be used to create smart contracts and create decentralized applications
and protocols.
○ Users can send and receive money fast with minimal fees.
○ Cardano’s cryptocurrency can be used as an investment for purchases and exchanges.
○ Like other blockchains, Cardano crypto holders can use their ADA to vote for any changes and
developments to the protocol.
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18. Primary Use Cases
● Education
○ Solution- Credential verification
● Agriculture
○ Solution - Supply Chain Tracking
● Government
○ Solution- Digital Identity
● Finance
○ Solution- Onboarding
● Health Care
○ Solution- Counterfeit Medicine
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19. Key Points
● Cardano is a third-generation cryptocurrency that combines the best characteristics of
the first and second generations, Bitcoin and Ethereum.
● Its platform offers an efficient alternative to the standard Proof of Work (PoW) network
utilized by Ethereum and other comparable coins.
● Cardano uses Proof of Stake (PoS) instead of Proof of Work (PoW) to improve scalability
and sustainability when compared to other cryptocurrency systems.
Cardano will use a democratic governance system that allows the project to evolve over time, and fund
itself in a sustainable way through a visionary treasury system.
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20. References
● Ethiopian Education Minister Confirms Cardano Blockchain Partnership - CoinDesk
● CARDANO Use Cases and Competitors (crowdwisdom.live)
● Enterprise - Cardano
● What is Cardano (ADA) - A Complete Guide | eToro
● Cardano (ADA): What Is It and How Does It Differ from Bitcoin? (investopedia.com)
● Introduction (cardano.org)
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21. Thank You!!
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