Whether Cardano to oust bitcoin and Ethereum[↻50%]

During the cryptocurrency fever of last year, bitcoin, ether and Ripple enjoyed the greatest demand from investors. This is not too surprising, because these currencies are the most expensive on the market — their capitalization exceeds 330 billion dollars. But the January collapse showed that the situation could change very quickly.

Now high volatility is caused by overheated market and doubts of some investors in their investments. But in the future, price dynamics will be determined by the emergence of more efficient technologies that replace the old, slower and worse optimized. Today, bitcoin and Ethereum blockchain reign in the market, but they are rapidly catching up with Cardano — the third generation blockchain, which seeks to become an ideal version of the technology. Will he be able to push the predecessors?
Introduction To Cardano
Cardano is a public, decentralized blockchain and open source cryptocurrency (as with bitcoin, blockchain and cryptocurrency are called the same). Its appearance was the result of cooperation between three organizations: non-profit Fund Cardano, engineering firm Input Output Hong Kong (iohk) and Japanese Emurgo, which works with companies interested in the introduction and integration of blockchain Cardano.
While the project is at the beginning of the journey, the software is actively updated. The main difference between Cardano is a peer-reviewed blockchain. It was created from the ground up to overcome the shortcomings of existing technologies related to the regulation, scalability and protection of personal data.
This can be viewed in a different way: bitcoin was a first-generation blockchain. He introduced the public to cryptocurrencies, but he had and has certain shortcomings. Blackany the second generation, such as Ethereum, learned from the mistakes of bitcoin. However, overcoming some of the problems of bitcoin, ether collided with others.
Cardano tries to make the most of the experience and achievements of its predecessors. The table shows the main characteristics of these projects.

There are other differences between the first, second and third generation blockchain, but we will focus on two main ones: the consensus algorithm (Protocol) and transaction data.
The algorithm of consensus
The consensus algorithm is just a fancy term describing the process of determining who will sign the next block in the blockchain. Probably, you have already heard about proof of work (proof-of-work, PoW), often called "mining". In it remuneration for calculation of the next block in proportion to the provided computing power. The method works, but it has some drawbacks: security issues, high power consumption, low transaction rates, and other issues. Currently, Bitcoin and Ethereum work under the Poe Protocol.

When proving the ownership share (proof-of-stake, PoS), the reward is proportional to the number of cryptocurrency in the user's wallet. In a sense, it can be seen as a dividend paid for owning a token. By analogy with mining, this process is called "stacking" (from English. stacking).
Bitcoin developers do not plan to switch to PoS, while the Ethereum network is in the process of transition. However, there is one problem: there is still no formal proof Of the security of POS algorithms.
For all except one, called Ouroboros, underlying the Cardano network. The PoS Protocol provides high security, highly rated banks and government organizations. In addition, there is no need to extract tokens. Instead, their entire volume is created at the very beginning and they enter the market immediately or in parts. The developers have released 45 billion tokens Cardano, although now in circulation is about 30 billion. Thus, you can buy Ada tokens only on the market.
Transaction data
Imagine the difference between buying candy and buying a house. The first can be easily purchased in the store, having only basic information. Buying a property requires much more information, a detailed contract and complex transactions.
The key difference between crypto projects is the amount of data that is moved during transactions. Bitcoin like any other currency, and only handles basic information. That is why it is called "cryptocurrency" (although not all tokens are cryptocurrencies).
Ether can be used as a currency and store contract information, but it is all collected in one layer. As a result, transactions are not always smooth. It's like buying a house for paper dollars and writing a contract on it. This approach significantly complicates the transaction and is not an optimal way to store information for future use.
Cardano uses a multi-layered storage system. Tokens can also be used as a currency to store contract information, but this happens in separate layers of the program code. This approach allows for more complex operations and increases the speed of work compared to the blockchain of previous generations, contributing to increased interest on the part of companies and wider introduction of technology.
In the end
Bitcoin brought blockchain technology to the masses, but it is very far from ideal. Platform Ethereum has made a number of improvements in the technology of bitcoin, but are faced with problems of growth.
Cardano is developing as a popular blockchain, which combines the experience and achievements of predecessors. However, the project is still in the early stages, and tokens still perform the function of the usual cryptocurrency. The next major update is scheduled for the second quarter of 2018. The proof-of-stake algorithm, on-chain control structure, and several key functions will be released.
Before the final implementation of the third generation blockchain will take place for some time, will require a number of SOFTWARE updates. Most likely, this year the popularity of the project will increase significantly — potential investors should keep this in mind.