Cryptocurrency evolution has been highly consistent as well as an expected, as various new technological concepts seem to be emerging out of it. Nevertheless, these technologies are mostly being incorporated for the betterment of the financial world and in turn humankind. The initial coin offering has helped the Entrepreneurs in many ways. It has provided them with the platform in order to showcase their ideas as well as raise huge amounts of money for their respective initiatives. Even the Blockchain technology has transformed many industries apart from the financial domain and cryptocurrency mining has also been very popular these days. Let us understand the Cardano Blockchain and the process of Cardano Mining.
The Cardano Cryptocurrency Blockchain platform is very similar to any other Blockchain which was initiated with a sole intention to improvise the financial economy, with an increased transactional speed, reduced cost, and in impenetrable security provided through Cryptography. The Blockchain platform is also considered to be highly regulation friendly as it doesn’t seem to violate any of the terms and conditions. It even supports the Smart Contract functionality, similar to that of the Ethereum network but with an increased scalability. However, the official cryptocurrency token of the blockchain platform is known as ADA.
Cryptocurrency mining is nothing but a process of helping the cryptocurrency Blockchain platform to sustain as well as improve by offering a certain amount of computational power of the processors. it must be understood that cryptocurrency mining results in the rewards in the form of new cryptocurrency tokens but specifically in this case of Cardano mining there is no outcome of new cryptocurrency tokens as all the ADA tokens were pre-mined during its inception self. The concept of mining was initiated from the process of Gold mining, hence the people have gained a false notion that mining always results in the evolution of new coins, but technically, this is not the case.
Ouroboros is the name given to the cryptocurrency mining algorithm that Cardano mining incorporates. It is actually a very efficient method when compared to other cryptocurrency mining protocols, where the users need to stake their funds. The nodes which Stake a certain amount of funds are known as stakeholders. Then all the stakeholders elect a single slot leader, who only gains access to add a block to the network. Interestingly each block must be mined every 20 seconds, and the whole process repeats for every 20 seconds, where each time a new slot leader is elected.
Each user contributes to the process of mining whose effect is directly proportional to the amount of ADA tokens they hold, during the Cardano mining process. The work of a slot leader is basically, to verify a bunch of transactions for its authenticity and group them into a single block and added to the Cardano network in the process of Cardano mining.
The Cardano mining process allows for a unique algorithm for which is named as ‘Follow The Satoshi’. The algorithm specifically designates some random coin in the network and the owner of that particular coin happens to become the slot leader. Indirectly the Cardano mining process possesses a higher probability for the users of the Blockchain platform having more number of ADA coins with them.
The Cardano mining and along with the overall Blockchain platform can be categorized into two phases. The first one being the Byron phase and the second one being Shelley. In the first phase, the cryptocurrency mining is vested only with few of the participants of the network and is somewhat centralized in nature, but in the second phase of the Cardano mining, the process would be made available to the public as well. Currently, the platform is in the first phase, and all the cryptocurrency enthusiasts are eagerly waiting for the release of the second phase.
However, the cryptocurrency mining is a bit complex and technical procedure. Therefore, one needs to have sufficient technical knowledge in order to start cryptocurrency mining. But in the case of Cardano mining, the process seems to be simplified as it doesn’t incorporate the complex Proof of Work consensus mechanism.