Name: Cardano - Simply Explained
Uploaded: 2018-06-24T11:25:10.000Z
Duration: 8 min 1 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Right now there are countless of cryptocurrencies
that you can buy.

Adverbs of manner

But recently, we've seen something called
Cardano getting a lot traction.

Adverbs of degree

But why is Cardano so popular all of a sudden?

What makes it so special compared to other
crypto's?

Cardano is a new cryptocurrency platform that
was launched in September 2017 after more

It's rather different then other cryptocurrency
projects because it is built around peer reviewed

So instead of writing a whitepaper and implementing
it straight to code, the Cardano team actually

makes sure that experts from around the world
read their papers, improve them and agree

Cardano claims to be the third generation
of cryptocurrencies.

The first generation was Bitcoin and is essentially
digital gold.

It's used to transfer and store virtual
money but is plagued with scalability issue's.

The second generation was started with Ethereum
and brought us smart contracts.

It improved scalability somewhat but not enough
to become a global currency.

The third generation however wants to take
the previous two generations and improve upon

Right now Cardano and IOTA are both considered
to be third generation blockchains.

Cardano wants to solve three big pain points
of the current generation: scalability, interoperability

We'll start with scalability which itself
consists out of three problems that have to

be solved: transactions per second, network
bandwidth and storage.

Transactions per second is the most obvious
one: in order for a cryptocurrency to become

a global payment system, you need to be able
to handle a lot of transactions per second.

Cardano's Ouroboros system solves this by
adopting proof-of-stake instead of proof-of-work.

You probably know that Bitcoin uses the proof-of-work
algorithm and lets everyone mine new blocks.

This process is slow and not only wastes a
lot of computing power, it also wastes huge

Instead, the network elects a few nodes to
mine the next blocks.

To make this all work, Cardano divides the
time into epochs.

An epoch is split into slots, a short period
of time in which exactly 1 block can be created.

The network then elects a slot leader for
each slot and this is the only person that

can mine a block for that particular slot.

Slot leaders listen for new transactions,
verify them and then puts them inside a block.

If a slot leader doesn't complete his task
in time or doesn't show up, he loses the

right to produce a block and has to wait until
he is reelected by the network.

This technique makes Cardano highly scalable
because they increase the amount of slots

per epoch and they could run multiple epochs
in parallel.

The next scalability problem is network bandwidth.

Each node in this network receives a copy
of all new transactions.

But imagine what happens if there are thousands
of transactions per second.

The node would need a lot of bandwidth to
continuously download them all, not very scalable!

Instead, Cardano wants to split up the network
into subnetworks by using a technique called

RINA (Recursive InterNetwork Architecture).

Each node will be a part of a specific subnetwork
and can communicate with other networks if

Much like the TCP/IP protocol for the internet.

The final aspect of scalability is data storage.

Blockchains store all transactions that have
ever happened.

But how do we handle this ever growing set
of data?

The Cardano team is thinking about implementing
techniques like pruning, compression and partitioning.

However they don't consider this a top priority
at the moment because storage space right

They'll tackle this problem later in 2018
or beginning 2019.

Big problem number two is interoperability.

First of all: there are many cryptocurrencies
out there, but they don't work together.

And secondly: banks and governments shy away
from cryptocurrencies.

So the Cardano team assumes that in the future
we won't have 1 coin to rule them all.

Instead, multiple different cryptocurrencies
will exists side by side, each with it's

You can't for example transform you Bitcoin
into Ether without an intermediate.

The Cardano project aims to be the “Internet
of blockchains” or in other words: a blockchain

that can understand what happens in other
blockchains.

This would mean seamlessly moving assets across
multiple chains.

Then there is also a problem with governments
and banks.

They shy away from cryptocurrencies because
they don't adhere to regular banking laws.

It's hard for them to trust a transaction
in the crypto world because they don't have

They like to know who made the transaction
and for what reason.

However this is also very sensitive information.

So the Cardano projects wants to allow people
to attach metadata to a transaction if they

This would make the crypto world play nicer
with the traditional banking world.

But again, it would be up to the user to decide
if he wants that or not.

The final problem that the team intends to
solve is sustainability.

Right now there are a lot of people who want
to build a company around cryptocurrencies.

To raise money for their company, they launch
an ICO or Initial Coin Offering.

After an ICO the team ends up with a lot of
capital that they can then use to fully start

But what happens if - after a couple of years
- this money runs out?

How will they make sure that development of
their technology continues?

Should they create a new coin and hold another
ICO just to get some cash?

This is still an unanswered question, but
it's clear that raising money just once

isn't very sustainable and doesn't promote
continuous improvement.

Cardano intends to solve this problem by creating
a treasury.

The idea is that the treasury will receive
a small percentage of every transaction that

The treasury itself is a special wallet that
isn't controlled by anyone.

Instead it's sort of smart contract that
can release a part of the funds to developers

who wish to improve the Cardano protocol.