What Is Cardano SL?
Cardano SL (Settlement Layer) is a cryptographic currency developed by IOHK in collaboration with the University of Edinburgh, the University of Athens, and the University of Connecticut. It builds upon the foundational whitepaper authored by Aggelos Kiayias, Bernardo David, Alexander Russell, and Roman Oliynykov.
Key Innovations
While similar to Bitcoin, Cardano SL addresses critical design flaws in its predecessor. Here’s what sets it apart:
- Proof of Stake (PoS): Unlike Bitcoin’s energy-intensive Proof of Work (PoW), Cardano SL uses Ouroboros, a PoS consensus algorithm, to enhance scalability and sustainability.
- Modular Design: Separates the settlement layer (transactions) from the computational layer (smart contracts), enabling upgradability.
- Academic Rigor: Peer-reviewed research underpins its protocol, ensuring robustness.
Consensus Algorithms Explained
Purpose
Consensus algorithms maintain ledger integrity by validating transactions and creating new blocks. Two primary types dominate cryptocurrencies:
Proof of Work (PoW)
- Used by Bitcoin.
- Requires solving complex mathematical puzzles ("mining").
- Energy-intensive and increasingly competitive.
Proof of Stake (PoS)
- Cardano’s Ouroboros selects validators based on stake (coins held).
- Reduces energy use by 99% compared to PoW.
FAQs
1. Is Cardano SL the same as ADA?
ADA is the native token of the Cardano blockchain, while Cardano SL refers to its settlement layer technology.
2. Why does Cardano use PoS?
PoS ensures energy efficiency, scalability, and long-term decentralization by incentivizing stakeholder participation.
3. How does Cardano improve upon Bitcoin?
By resolving scalability, interoperability, and sustainability issues through layered architecture and peer-reviewed solutions.
4. Where can I store ADA?
Use official wallets like Daedalus (full node) or Yoroi (lightweight) for secure storage.
5. Can Cardano handle smart contracts?
Yes, via the Plutus platform on its computational layer, enabling decentralized applications (DApps).
Key Features
- Scalability: Hydra solution processes 1M+ transactions per second.
- Interoperability: Bridges for cross-chain communication.
- Governance: On-chain voting via Voltaire.