Cardano: The Third-Generation Blockchain

The story of Cardano begins with a name familiar to many in the crypto world: Charles Hoskinson. He was one of the co-founders of Ethereum, the second-largest cryptocurrency in the world. However, Hoskinson had a different vision from his partners at the time. He wanted to build a platform grounded not in speed and hype but in solid research. The approach mirrors what is standard in medicine or engineering, where new developments are reviewed and tested before being put into practice.

In 2015 he founded the company Input Output Hong Kong (IOHK) and began developing Cardano. The platform launched in September 2017. Its native cryptocurrency is called ADA, named after Ada Lovelace, who is widely regarded as the first computer programmer in history.

At its core, Cardano is a blockchain: a digital, decentralised network where transactions are stored in a tamper-proof manner. You can think of it as a vast public ledger that is not controlled by any single bank or company but maintained collectively by thousands of computers around the world.

Running on this blockchain is the cryptocurrency Cardano (ADA), which can be bought, sold and sent. But Cardano can do more than just transfer money. It also supports what are known as smart contracts. These are essentially digital agreements that execute automatically once certain conditions are met, all without an intermediary. A simple example: a smart contract could trigger a payment automatically as soon as a delivery is confirmed.

Science over trial and error: Most blockchain projects develop their technology on a "build, test, improve" basis. Cardano reverses this process. Every technical innovation is first written up as an academic paper and reviewed by independent experts. This is exactly how medical studies are conducted. The approach takes longer, but it helps prevent errors before they occur.

Environmentally friendly by design: Bitcoin consumes enormous amounts of electricity because thousands of computers compete to validate transactions. This method is known as Proof of Work. Cardano uses Proof of Stake instead, a system in which validation power is determined not by computing power but by the amount of ADA a participant holds in the network. This saves energy and is significantly more sustainable.

A well-structured architecture: Cardano cleanly separates two key functions. One layer handles payments in ADA while the other manages smart contracts and applications. Think of it like a house where the electrical and plumbing systems are kept separate. If one fails, the other continues to work. This makes the platform more flexible and easier to upgrade.

The coming years will show whether Cardano's strategy pays off. The team is currently working on placing the platform fully in the hands of the community: ADA holders will be able to vote on how the network evolves and how funds are spent. At the same time, solutions are being developed to make Cardano significantly faster, with the goal of one day processing millions of transactions per second. The guiding principle remains the same: thoroughness over speed. And that is exactly what could turn out to be a long-term advantage.

While Cardano is the actual cryptocurrency and blockchain platform, a Cardano Future is a derivative financial product that allows investors to speculate on the future price development of ADA without owning the coins themselves.

Vontobel offers a broad range of leveraged products with Cardano Futures as the underlying, giving investors the opportunity to take both long and short exposure based on their own market view.