The idea of Cardano is to become a third generation blockchain project – to take the best of the technologies first implemented in the Bitcoin (Generation I) and Ethereum (Generation II) networks. Cardano claims to outperform Bitcoin which is slow and energy-consuming, and Ethereum which is unsafe.
Cardano users can create decentralized applications and run smart contracts.
The Cardano network implements the Ouroboros consensus mechanism based on Proof-of-Stake. It has been validated by the research of computer scientists and cryptographers from the University of Edinburgh, the University of Tokyo and other reputable institutions.
The special feature of the Cardano blockchain is that it is divided into two levels:
- Cardano Settlement Layer (CSL). This is where the ledger of accounts and balances are settled. Transactions are verified by the Ouroboros consensus mechanism.
- Cardano Computation Layer (CCL). This is where the calculations are performed for applications running on the blockchain through smart contracts.
Splitting the blockchain into two layers allowed the Cardano network to process up to a million transactions per second. But this is far from the limit. It is likely that the power will increase significantly after an update called Vasil scheduled for September 2022.