Cardano, the Blockchain 3.0. Isn’t it? – Part 2

Last week, we published our first part of the weekly dive about  Cardano where we discussed generally the project. In this part, we are going to focus more on the consensus behind Cardano and a brief comparison between this project and EOS.

cardano vs eos

Proof of Stake:

The idea behind PoS is that users vote or “stake” with their coins on the network which will help them in accruing interest. In other terms, the “stakers” gain freshly minted, distributed tokens at regular intervals for their participation. The protocol encourages the crypto user base to be active on the network. Eventually, this will help in the facilitation of transactions and in securing the blockchain. Meanwhile, the protocol does not require any energy compared to the Proof of Work (PoW). There is no doubt that Proof of stake seems like the most optimal solution. However, many problems encounter PoS. The major problem is a costless simulation, which is related to “the nothing at stake” problem. In other words, it’s possible to build an alternative history of the blockchain and create multiple competing chains at no cost. As a consequence of this, an attacker can manipulate the blocks and select himself to ‘win’, since blocks themselves are the source of randomness used to elect the creators of the blocks (which is named grinding attacks).

As a solution, Cardano hopes to take the concept of PoS and solve its shortcomings in a similar way to Bitcoin Denial of Service. Some people claim that ADA is a better version of Bitcoin that uses another algorithm. After years of research to solve the problems, Cardano is today implementing a new type of PoS algorithm under the name of Ouroboros. The algorithm determines how individual nodes reach consensus about the network. In addition to eliminating the need for an energy-hungry proof of work protocol, Ouroboros is the first proof of stake protocol that mathematically been shown to be provably secure. Actually, the level of security demonstrated by Ourobors is comparable to that of Bitcoin’s blockchain, which had never happened before. In an interview, IOHK Chief Scientist behind Ouroboros Aggelos Kiayias said about his project:

Contrary to [other proof-of-stake protocols], we developed Ouroboros together with a formal proof of security that the protocol indeed captures the security properties of a robust transaction ledger like bitcoin.

Roadmap of Cardano

According to the project roadmap, Cardano will be released in 5 stages:

  • Byron: Enables users to trade and transfer Ada. The Cardano main net was also launched.
  • Shelley: Ensures that the tech is in place for it to become a fully decentralized and autonomous system
  • Goguen: Will see the integration of smart contracts.
  • Basho: Centered around performance improvements.
  • Voltaire: IOHK will add a treasury system and governance.

 

KMZ Sidechains

KMZ sidechains are the key to encapsulating complexity. Ledgers with regulatory requirements, private operations, robust scripting languages and other special concerns are effectively black boxes to Cardano Computation Layer.

Thus, Sidechains are developing tools that support digital assets on one blockchain to be securely used in a separate blockchain and then be moved back to the original blockchain if needed.

 

ADA Token distribution

The total supply of ADA is 45 billion.

During the ICO held between September 2015 and January 2017I, 25,927,070,538 ADA were sold for $63 million (= $0.0024 per ADA) to more than 10.000 people.

As per the distribution audit, the majority of the ADA ( 94.45%) was sold to Japanese citizens, 2.56% to Koreans, 2.39% to Chinese and the remaining 0.61% to citizens of 5 other Asian countries.

The other 5,185,414,108 ADA were distributed over IOHK, Emurgo and the Cardano Foundation. The remaining 13,887,515,354 ADA of the 45 billion ADA that will ever exist (maximum supply) will be minted as block rewards.

Cardano VS EOS

In our first episode of the “Weekly Dive” we made a deep analysis of the EOS blockchain.

As mentioned in the title of this section, we are going to compare EOS and Cardano, since they are working with proof of stake algorithms and both of themare focusing on solving similar problems such that blockchain scalability.

PoS Vs DPoS

Despite the fact that EOS and Cardano are aiming to achieve scalability, their respective blockchains use different types of consensus algorithms. As mentioned above, Cardano uses a PoS type consensus algorithm (Ouroboros). On the other hand, EOS uses a delegated proof of stake algorithm (DPoS) with a predetermined number of delegates, also named blocs producers, BP (21).

ADA VS EOS Token

One of the differences between EOS and Cardano is the use of different types of native tokes for transaction fees on their network. Compared to EOS where transactions are free of charge since when you create an account on the platform you deposit tokens into it, the fees for sending and receiving ADA tokens are calculated by using a formula.

a + b x (transaction size measured in bytes)

a and b are constants, with a = 0.155381 ADA, and b = 0.000043946 ADA,

Thus, the minimum transaction fee a user can pay is fixed at 0.155381 ADA. The TX fee increases by a small fraction of ADA.

“Interoperability” VS “flexibility”

In addition to addressing today’s scalability issues, Cardano’s architects are focused on creating decentralized software systems that are “interoperable” and “sustainable.” Currently, there exist more than 2000 different digital assets. Cardano’s  team believes that it’s necessary that these tokens have a way to “interoperate.” Moreover, the project is focusing on having a viable funding model in order to have more longevity and sustainability.

On the other side, EOS is eying “flexibility”, “usability” and “governance”. After the DAO attack on Ethereum, EOS’ architects claimed that Ethereum’s blockchain was ‘inflexible’, and the proof its hard fork just after the attack.

Charles Hoskinson VS Dan Larimer

This seems ironic but it happened! Last year, some drama happened between the EOS and Cardano communities over a series of posts and counter-posts by a couple of the 2 faces of each project.

Dan’s critique: https://steemit.com/cardamon/@dan/peer-review-of-cardano-s-ouroboros

Charles response: https://imgur.com/a/hA8O4 or https://www.reddit.com/r/cardano/comments/7oibsi/some_shots_fired_across_the_bow/

Dan’s response to Charles’s response: https://steemit.com/cardano/@dan/asking-the-right-question

 

This sort of “debate” shows more a sort of contrast between Academia (Cardano) and Business (EOS).

 

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Khalil Liouane

Computer Engineering student, interested in blockchain tech startups creating innovative solutions that can shape a better future.If you are one of those startups email me: contact@decentral.news

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