Cardano: Masters of True Decentralization

Bitcoin was the first generation of cryptocurrency that introduced the world to the concept and true potential of blockchain technology. It is indeed the first decentralized product that might change banking and transactions as we know it. However, BTC did fall short in certain places; for instance, it still calculates it’s mining ability through the total energy consumed by the miner via Proof of Work (POW).

From an environmental standpoint that method is still questionable. But, ever since the blockchain revolution began there are plenty of cryptocurrencies throughout the world that are adapting to a Proof of Stake (POS) token method. This does not require verification of transactions on the basis of POW.

Cardano is a blockchain network that is not based on the generic mining process. Instead token holders receive rewards based on POS structure.


Cardano was first introduced to the cryptocurrency world in 2015, having the parent company Input-Output Hong Hong (IOHK), which was managed by Charles Hoskinson the co-founder of BitShares and Ethereum. While Bitcoin and Ethereum are first generation cryptocurrencies, Cardano is third generation cryptocurrency that has created its own blockchain concept.

While Cardano is merely the name of the blockchain on which it works, ADA is the token name (coin name) that is rewarded to users. Cardano belongs to the same staking family as Tezos for example but is achieving decentralisation on a unique scale like no blockchain has ever achieved before.

Cardano allows its users to create smart contracts, similar to that of Ethereum. These smart contracts allow two or more users to enter an agreement without needing a third party. So, once the predefined conditions have been met the whole procedure is automated, givingit the true definition of being completely decentralized.

How will it work?

Staking pools focus more on the staking capacity of the system. Let us take an example:

If person A has a staking wallet with 1000 Ada coins but wants to do it alone, their wallet might not get selected as a block, since the blockchain tries to find the most suited and compatible block for mining. So, person A might not receive many rewards.

Whereas person B really wants to contribute to the stake pool and decides on a number of coins they will put forth The staking pools value will undoubtedly increase as compared to other wallets and pools, and person B will have a higher chance of getting rewarded for resolving a pool. This is because, after person B’s contribution, the number of nodes will increase in the pool, and the blockchain would choose them as a block. 

This basically works like a stock market, only more secure, legitimate and rewarding.

The Shelley Era

Unlike the Byron era, the Shelley era (based on a scientific philosophy) is more focused on making Cardano’s journey a completely decentralized platform. The network under the Byron system was rather federated. But as Shelley is being integrated in the blockchain, more nodes are shifting towards the control of the Cardano community.

The whole idea behind the launch of Shelley is to give the power back to the community and Ada token holders. More than a 1000 nodes are predicted to run after the launch of Shelley, provided the stake pools are enough. This will promote decentralization, giving the community back the power.

This introduction of Shelley to the Cardano blockchain has also given the opportunity for the platform to delegate and incentivize the stake pool system. As a POS network, ada coin holders would pool their coins to participate in the network.

Designed using game theory and based on recent research of the POS network, Cardano would be delegating their stakes to the hands of users through stake pools, so more the nodes, more the rewards.

Once implemented,it is predicted to become 50-100 times more decentralized than any other large blockchain network in the business. At the moment the network is designed to reach an equilibrium of 1000 stake pools. Currently, the network is controlled by less than 10 mining pools. This paves the way for a much greener initiative, as POW blockchains would be using the electricity equivalent of a small country, whereas the POS network would only be using electricity of a small house.


Theoretically the POS network has succeeded and is said to work better and decentralize the Cardano network in very little time. Moreover, the reward system of Cardano after the introduction of Shelley is exponential and would truly benefit the users. This is by far a much more greener initiative and is indeed the future of one of the largest decentralized networks.