Crypto Academy Week 6 - Homework Post for @besticofinder

Hello every one welcome to another homework task post for @besticofinder one crypto professor, this is week 6 now which is one month and 2 weeks and i have learnt a lot by participating in this tasks and i hope you have too.

This week our professor @bestcofinder wrote about every thing that has to do with how to invest in cryptocurrency which is good so if you want to read our professor article click this link any way let's dive into this week task.

The homework task is to do my own analysis on the cryptocurrency that I am going to invest in and the name of that cryptocurrency is Cardano (ADA) so stick around to find out why.

What is Cardano(ADA?

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Cardano internal cryptocurrency is known as ADA and Cardano is a crypto network and open source project that it's goal is to run a public block chain platform for smart contracts.

The development of cardano started in 2015 but was later launched in 2017 by Charles Hoskinson, The development of the project is overseen and supervised by the Cardano Foundation based in Zug, Switzerland.

The Project Concept

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I went through the white paper to read the project concept of cardano and I found out that it is really different from most cryptocurrency because it is built around pre reviewed papers instead of white papers, instead of writing a white part and implementing it straight to code the cardano team actually make sure that expert from around the world read their papers, approve them and agree with the outcome.

Cardano claims to be the third generation of cryptocurrency, the first generation was Bitcoin and it essentially digital gold because it is used to transfer and store virtual money but it is with scalability issues, the second generation started with Ethereum and brought smart contracts, it improved scalability but not enough to become a global currency. The third generation however wants to take the two previous generation and improve upon them, right now Cardano and IOTA are bothering considered to be third generation block chains, Cardano want to solve three big pin points of the current generation which are scalability, interoperability and sustainability,

Scalability: scalability itself consist of three problems that has to be solved which are transaction per seconds, network bandwidth and storage. Transactions per second is the most obvious one because before a cryptocurrency can 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 rather than proof of work, you probably knows that bitcoin uses the proof of work algorithm and let's every one mine new blocks, this process is slow and not only waste a lot of computing power it also waste a lot of electricity.

Cardano is much more efficient because it doesn't let everyone mine their blocks instead the network elects a few notes to mine the next blocks this are called slot readers, so to make this all work cardano divides the time into epics, an epic is split into slots which is a short period of time in which exactly one block can be created the network then elects the 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 put them inside a block, if the slot leader doesn't complete it's task in time or don't show up he or she will loose the rights to produce a block and has to wait to reelected by the network, this technique makes cardano highly scalable because they can increase the amount of slots per epic and they can run multiple epics in parallel, the next scalability problem is network bandwidth, block chains are stored in a peer2peer network, each node in this network receives a copy of all new transactions but imagine what happens if there are many transactions per second. The nodes will need a lot of bandwidth to continuously download them all and that is not very scalable instead cardano wants to split up the network into subnetworks by using a technique called Rina, each node will be part of a specific epic sub network and can communicate with other networks if needed much like the tcpip protocol for the internet and the final aspect of scalability is data storage, block chain stores all transactions that has ever happened but you may be thinking how we handle this amount of data, the cardano team is thinking about implementing techniques like pruning, compression and partitioning.

interoperability: this again consists of two problems, first of all they are so many cryptocurrency out there that they don't really work together and secondly banks and government shy away from cryptocurrencies so the cardano team assumes that in the future we won't have one coin to rule them all instead multiple different currencies will exist side by side each with it's own protocol and rules, right now this don't talk to each other you can't for example transfer your bitcoin into eths without intermediate, the cardano projects aims to be the internet of block chains or in another words a block chain that understand what happens to other block chains, this mean moving assets across multiple chains then there is also a problem with governments and banks because they shy away from cryptocurrencies because they don't adhere to regular banking laws, it's hard for the to trust a transaction in the crypto world because they don't have any data about that transaction, you see they don't like to know who make the transaction and for what reason, however this is also very sensitive information so the cardano wants to allow people to attach data to a transaction if they want to this will make the crypto world play it nicer with the banking world but again it will be upto the user to decide if he wants that or not they final problem that the team intends to solve is the sustainability.

Sustainability: Right now they are a lot of people that want to build a company around cryptocurrencies they launch an ico or initial coin offering, after an ico the team ends up with a lot of capital that they can use to fully start their company. but what happens if after some years this money runs out and how will they make sure that the development of their company continues, should they create a new coin? and hold another ICO just to get some cash. This is still an unanswered question but it is 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 would received a small percentage of every transaction that happens on the network, the treasury it self is a special wallet that isn't controlled by any one instead it's a sort of smart contracts that can release a part of the funds to developers to which to improve the cardano protocol, to do this developers have to submit a proposal to the community saying what they want to change and how much money they need for it the they community can then vote on the ideas that think is the most important after a certain amount of time the treasury takes a most popular proposals and give them enough money so they can develop their improvements over time the treasury model will keep cardano sustainable by providing continuous streams of money that can be used to continue to do research and to improve the system so far we talked about all the things about the concept of the Cardano project and as you can see it is ambitious and a little bit risky because they are trying tackle many challenging problems take the treasury model for instance it depends on the voting system to prevent people from seizing control, the cardano project is still very young and still has a long way to go but their way of working from other cryptocurrencies so cardano might be the project that finally solves some long standing problems but time will tell.

The factors supporting my decision for cardano.

1). It is from a new generation.
2). It is fast.
3). It will solve a lot of standing issues.

Why the particular project will be a good investment.

Cardano will be a good investment because it is new and has a lot of use and also because it is still a growing company which have great potential.

Conclusion

Cardano is a good project not only because it is new but because it has come to solve a lot of issues that we face in the crypto community and I think that is what the community needs more project that will solve issues and that has a use case any way I want to thank @steemitblog and @besticofinder because through this process of doing this homework it has pushed me into doing researches.