Read on Twitter
In Nov 2018 I dipped my toes into the ๐๐ข๐ณ๐ฅ๐ข๐ฏ๐ฐ crypto project. The objective for doing so was to create incentives to learn more about crypto. Cardanoโs (ADA) transparent and academic approach, rather than trial & error, appealed to me the most(1/19) https://www.cardano.org"> https://www.cardano.org
As delays have plagued the project it has been a bumpy ride, until the recent announcement of the release of ๐๐ฉ๐ฆ๐ญ๐ญ๐ฆ๐บ and thus full decentralization. But the price performance is not this threadโs topic. https://cointelegraph.com/news/here-comes-shelley-ada-price-excels-with-cardano-upgrade-inbound">https://cointelegraph.com/news/here...
I want to highlight that the more Iโve read about ADA, the more Iโve come to realize that crypto projects (not necessarily ADA) will have a significant impact on the future ๐ง๐ช๐ฏ๐ข๐ฏ๐ค๐ช๐ข๐ญ ๐ด๐บ๐ด๐ต๐ฆ๐ฎ. A claim that many prominent people still neglect. https://medium.com/@Cardanians_io/how-can-cardano-disrupt-the-traditional-financial-system-5ffe2809d6c7">https://medium.com/@Cardania...
ADA is a 3rd gen crypto currency and is based on advanced ๐๐ณ๐ฐ๐ฐ๐ง ๐ฐ๐ง ๐๐ต๐ข๐ฌ๐ฆ (PoS) consensus technology to verify transactions. PoS is scalable & significantly more energy efficient than Proof of Work (PoW) consensus (used by Bitcoin & most others) https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/">https://blockgeeks.com/guides/pr...
Staking works pretty much like this: ADA owners will be able to delegate their holding to a stake pool. In return they will receive rewards from the stake pool, which could be compared to stock dividend. Currently the annual yield, or staking reward, for ADA is around 10%.
A stake pool is basically a server that verifies transactions. The more ADA that has been delegated to it, the higher probability for it to โwinโ transactions to verify. The stake pool operator cover its costs and profit by charging a fee of the poolโs total rewards.
However, part of maintaining decentralization is to make sure that no operator can control the network, ever. Thus, if a specific stake pool becomes too big, it will become oversaturated and its yield will decline until some ADA owners re-delegate their ADA to another pool.
