diff --git a/docs/04-explore-cardano/01-cardano-design-rationale.mdx b/docs/04-explore-cardano/01-cardano-design-rationale.mdx deleted file mode 100644 index e3c2c8b1..00000000 --- a/docs/04-explore-cardano/01-cardano-design-rationale.mdx +++ /dev/null @@ -1,93 +0,0 @@ ---- -title: Design rationale -metaTitle: Cardano design rationale ---- - -[Cardano](https://cardano.org/) has been built as a resilient and sustainable -blockchain using the core principles of security, scalability, and -interoperability. Fundamentally, it was designed as a -[proof-of-stake](https://docs.cardano.org/new-to-cardano/proof-of-stake) system, -which means it is undoubtedly more efficient, by orders of magnitude, than proof -of work. Crucially, our ground-breaking proof-of-stake consensus protocol -[Ouroboros](https://iohk.io/en/blog/posts/2020/06/23/the-ouroboros-path-to-decentralization/) -is proven to have the same security guarantees that proof of work has. - -Formal methods, such as mathematical specifications, property-based tests, and -proofs, are the best way to deliver high assurance software systems and give -confidence to users for the management of digital funds. Cardano has been built -using formal methods to get strong guarantees on the functional correctness of -core components of the system. - -Security is one of the founding principles of our blockchain. Cardano is written -in Haskell, a secure functional programming language that encourages building a -system using pure functions. This leads to a design where components are -conveniently testable in isolation. Furthermore, advanced features of Haskell -enable us to employ a whole range of powerful methods for ensuring code -correctness, such as basing the implementation on formal and executable -specifications, extensive property-based testing, and running tests in -simulation. - -For Cardano to deliver a resilient infrastructure on a global scale, it needs to -be able to scale on par with legacy financial systems. Even though we have -designed Cardano with resource efficiency in mind, scaling remains a fundamental -problem for blockchain systems of all kinds. To get towards a solution of the -scaling problem, our researchers have invented our scalability solution -[Hydra](https://eprint.iacr.org/2020/299.pdf), a protocol that can be executed -on top of Cardano, allowing transaction and smart contract processing off the -main chain. This will multiply the capacity of the overall system by a -multitude. - -Performance engineering was used to assess whether design decisions helped us -move closer to the resilience, performance and scalability targets. Distributed -systems performance engineering was applied to anticipate and mitigate issues -associated with long-term, continuous and scalable operations in a real-world -open environment. - -Another major aim in the design of Cardano is to reduce centralization while -actively working against economic incentives that would drive the system towards -centralization. As soon as you have [stake pools](/learn/stake-pools), you have -an economic incentive for these pools to grow, so it was important to make it -less attractive for a stake pool to become too big. It is more cost-efficient to -have a small number of large pools, than a large number of small pools. Cardano -was designed to work against the economic incentive where large pools dominate -the system, by making it less attractive for a pool to become too big. This was -achieved by changing the reward formula. In a naive system, the total rewards -for a pool would be proportional to its stake, so the bigger it gets, the -better. In Cardano, if a pool attracts more stake than a certain threshold (1/k, -where k is a configurable parameter), its reward will no longer increase. So, if -everyone acts in their own self-interest to maximize their rewards, you expect -_k_ pools of roughly equal size. - -The ability to interact with other systems, or interoperability, is a -fundamental design feature of Cardano. One of the current design innovations in -Cardano is the use of sidechains, which means that you can compartmentalize the -system and enable interoperability within the blockchain platform. Data can be -kept off the main chain in what is called a sidechain. Multiple sidechains can -run concurrently, so if one part fails, the rest of the system does not fail, as -it is maintained separately. This results in greater assurance and reliability -within the blockchain. By using sidechains you can transfer assets between -parallel blockchains that operate in different rules, mechanisms or languages -and ways of utilizing the network. - -Governance is also central to the design of Cardano to ensure system -sustainability and adaptability. A well-developed governance strategy will -enable effective, democratic funding for Cardano’s long-term development. The -Cardano treasury system is currently being designed as a sustainable funding -mechanism to maintain Cardano. It will be controlled by the community and will -enable a decentralized, collaborative decision-making process to sustain -Cardano’s development and maintenance. Various potential funding sources will be -used to refill the treasury on a constant basis, such as the aggregation of -newly-minted coins, a percentage of stake pool rewards, transaction fees, and -donations or charity. With funds being accumulated in an iterative process, it -will be possible to fund the project development and pay for improvement -proposals. In addition, Cardano Improvement Proposals (CIPs), will also be -delivered to foster and formalize discussions around new features and their -development within the community. - -Central to the treasury is a democratized voting mechanism where ada holders -will themselves decide how funds are allocated by voting on funding proposals. -This will ensure that decisions are made by a democratic vote rather than by -just a handful of stakeholders. This voting system will influence decisions such -as funding initiatives, authorizing updates to the protocol, and rolling out any -constitutional updates such as changes to the decision-making process, or the -minting of new tokens. diff --git a/docs/16-evolution/01-cardano-design-rationale.mdx b/docs/16-evolution/01-cardano-design-rationale.mdx new file mode 100644 index 00000000..e75edce0 --- /dev/null +++ b/docs/16-evolution/01-cardano-design-rationale.mdx @@ -0,0 +1,35 @@ +--- +title: Design rationale +metaTitle: Cardano design rationale +--- + +[Cardano](https://cardano.org/) is an open source [proof-of-stake](https://cardano-documentation-eta3wf1x1-iog.vercel.app/new-to-cardano/proof-of-stake) blockchain project that began in 2015 to address existing blockchain challenges in the design and development of cryptocurrencies. It aims to provide a more balanced and sustainable ecosystem that better accounts for the needs of its users as well as other systems seeking integration. + +The first generation of blockchains (like Bitcoin) offered decentralized ledgers for secure cryptocurrency transfer. However, such blockchains did not provide a functional environment for complex deal settlement and decentralized application (DApp) development. As blockchain technology matured, the second generation (like Ethereum) provided more enhanced solutions for writing and executing smart contracts, application development, and the creation of different token types. On the other hand, the second generation of blockchains often faces issues in terms of scalability. + +Cardano is conceived as the third-generation blockchain as it combines the properties of the prior generations and evolves to meet all the arising needs of users. When comparing blockchain properties, many aspects should be considered. Thus, the best solution must ensure the highest security, scalability (transaction throughput, data scale, network bandwidth), and functionality (besides transaction processing, the blockchain should provide all means for business deal settlement). Moreover, it is important to ensure that blockchain technology is constantly developing in terms of sustainability and is interoperable with other blockchains and financial institutions. + +To address these needs, Cardano has been built focusing on such core concepts as: + +- Scalability – ensures that the Cardano network is capable of processing an increasing number of transactions as user demand grows. Scalability also provides higher bandwidth capabilities to allow transactions to carry a significant amount of supportive data that can be easily managed within the network. For these needs, Cardano is implementing various techniques (like data compression for instance), and introduces such scaling solutions as [Hydra](https://hydra.family/head-protocol/) and [Mithril](https://mithril.network/doc/), for example. Read more about the [research underpinning Cardano's scalability here](https://www.essentialcardano.io/article/an-analysis-of-the-research-underpinning-cardanos-scalability). + +- Interoperability – ensures the most multi-functional environment for financial, business, or commercial operations by enabling users to interact with different blockchain systems. Cardano aims to support cross-chain transfers, multiple token types, and commonly used smart contract languages. Read more about the concept of [partner chains](https://iohk.io/en/blog/posts/2023/11/03/partner-chains-are-coming-to-cardano/). + +- Sustainability – designing a proof-of-stake blockchain means it is vital to ensure that the system is self-sustainable. To drive growth and maturity in a truly decentralized manner, Cardano is built to allow the community to maintain its continuous development by participating, proposing, and implementing system improvements. This is now being implemented through [CIP-1694](https://cips.cardano.org/cip/CIP-1694) on-chain governance mechanisms. + + +## Cardano advantages + +- Academic research – formal methods, such as mathematical specifications, property-based tests, and proofs, are the best way to deliver high assurance software systems and give confidence to users for the management of digital funds. Cardano has been built using formal methods to achieve strong guarantees on the functional correctness of core components of the system. All of the research and technical specifications that underpin Cardano are publicly available, and all Cardano development activity is published online. + +- System design – Cardano is written in Haskell, a secure functional programming language that encourages building a system using pure functions, which leads to a design where components are conveniently testable in isolation. Advanced features of Haskell enable employing a whole range of powerful methods for ensuring code correctness, such as basing the implementation on formal and executable specifications, extensive property-based testing, and running tests in simulation. + +- Security – [Ouroboros](https://iohk.io/en/blog/posts/2020/06/23/the-ouroboros-path-to-decentralization/) (the Cardano proof-of-stake protocol) establishes rigorous security guarantees; it was delivered with several peer-reviewed papers presented in top-tier conferences and publications in the area of cybersecurity and cryptography. + +- Energy efficiency – Cardano is a proof-of-stake blockchain. In contrast to proof-of-work blockchains, [Cardano requires much less energy](https://iohk.io/en/blog/posts/2021/08/17/why-they-re-calling-cardano-the-green-blockchain/) and computational power. The Bitcoin network is secured through computers doing ever-more-energy-intensive computations – proof of work – which is unsustainable in the long term. Cambridge University has an online tool that shows the [computers powering Bitcoin](https://cbeci.org/) already consume more electricity than some countries, like [Switzerland](https://www.bfe.admin.ch/bfe/en/home/supply/statistics-and-geodata/energy-statistics/overall-energy-statistics.html) for example. + +- Seamless upgrades – traditionally, blockchains upgrade using hard forks. When conducting a hard fork, the current protocol would stop operating, new rules and changes would be implemented, and the chain would restart – with its previous history being erased. Cardano handles hard forks differently. Instead of implementing radical changes, the Cardano [hard fork combinator technology](https://iohk.io/en/blog/posts/2020/05/07/combinator-makes-easy-work-of-shelley-hard-fork/) ensures a smooth transition to a new protocol while saving the history of the previous blocks and not causing any disruptions for end users. + +- Decentralization – Cardano is maintained by over 3,000 distributed stake pools that are operated by the community. All blocks and transactions are validated by network participants without any reliance on a centralized authority. + +- Functional environment for business use cases – Cardano is establishing a foundation for global, decentralized finance to develop a range of DApps that can run using functional and domain-specific smart contracts, providing multi-asset tokens for any needs. diff --git a/docs/16-evolution/_category_.yml b/docs/16-evolution/_category_.yml new file mode 100644 index 00000000..371f1771 --- /dev/null +++ b/docs/16-evolution/_category_.yml @@ -0,0 +1,4 @@ +position: 16 +label: Cardano's evolution +collapsible: true +collapsed: true