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What Is Cardano ?
What is Cardano SL?
Cardano SL is also known as Cardano Settlement Layer and this is a cryptographic currency created and advanced by IOHK in collaboration with three universities – those of Edinburgh, of Athens and of Connecticut. Cardano SL is based on the white paper written by Aggelos Kiayias, Bernardo David, Alexander Russell and Roman Oliynykov.
Cardano SL is similar to Bitcoin, however it offers the freedom of fixing the design flaws of the later.
What Makes Cardano SL Special?
As mentioned, Bitcoin and Cardano SL are very much alike, however there are things setting them apart as well. One major difference is that the former is a proof of work type of cryptocurrency while the later uses a proof of stake to reach the agreement. This approach strengthens users’ honesty and participation for the long term.
Purpose of a Consensus Algorithm
To have an updated state of the ledger, consensus algorithms are needed since they produce new transactions blocks. All new blocks of transaction must be published and they need a proof of merit attached. It is the node running the cryptocurrency protocol that publishes the block of transaction. Let’s talk about two types of proofs that are possible.
Proof of Work and Mining
The most common general agreement algorithm type for the cryptocoins is the proof of work. This type of proof was created for Bitcoin and this is how Bitcoin still functions. The computer has to solve a test to create proof of work. The test is a problem that is difficult to find an answer to, however once it is found, it is easy to check it. When the answer is found by the computer on the proof of work network, it publishes it along with any transactions it observed during the time it worked to solve the problem. Its owner will collect transaction fees and a recompense because a block was generated. This whole action is referred to as mining. Mining uses a lot of energy that in turn is ever increasing, which in turn also leads to a lot of competition.