Cardano's solution to scalability - Hydra.

Scalability is a problem for all blockchains, and after 5 years of research, in March 2020, Cardano released Hydra, the solution for scalability and throughput! For a blockchain to be globally scalable, it must have low latency, high throughput, and low required storage per node.

Hydra is Cardano’s second layer that runs semi-independently from the blockchain. It can handle transactions and micro-transactions with low fees, it can run smart contracts (same as the first layer), and it becomes faster and more efficient as the network grows (the more nodes there are Hydra can scale more).

VISA is often used for comparison with cryptocurrencies, as it usually handles around 2000 TPS, and it can go up to 24000 TPS. PoW blockchains can support several dozens of TPS while PoS blockchains can go up to a few hundred TPS, still not close to VISA. When mass adoption comes, the first layers (blockchains) won’t be able to support the rising demand for TPS. Because of this most of the transactions will be handled on the second layers. And this is where Hydra comes in! Hydra allows Cardano to overshadow VISA in the number of TPS it can handle while remaining decentralized and secure. Hydra solves all three aforementioned scalability issues: low latency, high throughput, and low required storage per node!

The Cardano blockchain is the first layer which is run by Ouroboros. On this layer, people can send and receive ADA, and soon, create dapps and smart contracts.

Hydra is the second layer, built on top of the Cardano blockchain. It runs semi-independently, which means that once a Hydra head has opened, all the transactions that occur there are not recorded on the Cardano blockchain. Once the Hydra head is closed the total amount of ADA coins that returns to the blockchain is the same regardless of the distribution. Let’s say we have 3 people and they all have 100 ADA. They have some business to do with many small transactions. They transact on the second layer, Hydra, to get lower fees and fast finality. Between them, they make 1000 transactions, and eventually, their business is concluded. Once they return their coins to the Cardano blockchain, the total amount is again 300 ADA but now person 1 has 200 ADA and the other two have 50 ADA each. Only that one change is recorded on the Cardano blockchain while the previous 1000 transactions are not of importance. This alleviates pressure and congestion from the first layer while giving people the ability to transact instantly, freely, and securely on the second layer or Hydra.

Every node or stake pool on the Cardano network can open a Hydra head or channel. A single Hydra head can process around 1000 TPS. So, 1000 nodes on the Cardano network can process up to 1 000 000 TPS. This puts Cardano ahead of the competition by miles, it even puts it ahead of VISA by miles. On top of that, a smart contract created on the Cardano blockchain can be transferred to its second layer, Hydra, where it can operate seamlessly, just like on the Cardano blockchain. Stake pools also have an incentive to run a Hydra head since it can be an added revenue stream for the stake pool operators – the more transaction occur the more transaction fees the stake pool can earn. A win-win for everyone involved.

Scaling for millions of users, without sacrificing decentralization, is the holy grail of cryptocurrencies. First-layer cryptocurrencies are already having problems handling the current demand for TPS, and that will only get worse in the future as the number of users grows. We have already seen this with Ethereum which had enormous gas fees this year.

Hydra is a great solution to a future problem, a pre-emptive strike. As the Cardano network grows, and more stake pools are added, so will the scalability of the network grow. Cardano will be able to grow and perform for millions of users without any problems with throughput, congestion, the finality of transactions, etc.

Hydra - Cardano's Second Layer

Funding Development and the Future of Cardano

Cardano is already up and running, ADA transactions are seamless with low fees. But there is so much more that Cardano can achieve. That requires development which requires developers, and who is going to pay for all that? What are they going to develop? That is why sustainability is of critical importance for Cardano.

There are two main issues here; “How we pay for things?” and “Where should we go?” as Charles Hoskinson so eloquently explained in his 

. The “How we pay for things” refers to the research and development of Cardano, and “Where should we go” refers to the future of Cardano, i.e. the direction in which to take Cardano, what to create, what changes to implement, etc.

The most popular model of funding the development of cryptocurrencies is ICO. That is a great way to start. The founders can get funding to hire more developers and complete their projects. But what happens after the money runs out? ICO is a great start but it is not sustainable in the long run.

How do we pay for things? Cardano’s solution is the Treasury. You can look at the Treasury as a decentralized bank account. A small portion of every transaction fee and block reward goes to the Treasury, instead of going to a stake pool. People can also donate to the Treasury. Now, we have a new problem, who decides which projects to fund? Voting is the answer! Let’s say someone submits a proposal to the treasury to create something on Cardano. Then ADA hodlers vote for the proposal, and if they get enough votes, the treasury will automatically send money to that person to fund their project.

The Treasury solution is very elegant and more importantly sustainable! As Cardano grows the Treasury gets more and more ADA (more transactions, more blocks, etc.). These funds can then be used to further grow and develop the network. The voting system also starts a debate in the community about the priorities and importance of various projects. Pretty neat!

Blockchains are always evolving. Where should we go? Changes on a blockchain are usually done via hard-forks or soft-forks. The issue with this approach is that there is no set way of determining which of the proposed changes to implement. Over time, this lack of guidelines leads to irreconcilable differences and blockchains break into two or more, for example, Ethereum and Ethereum Classic, etc.

Charles Hoskinson finds a parallel between a constitution and blockchain. Changing a constitution is a slow process that requires public debate and consensus for a change to happen. He proposes that we should look at blockchains in a similar way we see constitutions. The solution is voting on Cardano Improvement Proposals or CIP. Voting will be preceded by online debates, and for a CIP to be implemented there should be a high threshold of votes in favor.

Cardano boasts a strong community of scientists, developers, and hodlers, all working toward making Cardano and the world better! Its recent partnership with the Ethiopian Ministry of Education will make Ethiopian educational records the safest, the most transparent, and the most advanced in the world. Ethiopia will jump many steps that western countries underwent, and it will overtake them all! University and other student records will be available for all on the Cardano blockchain without the possibility of falsifying or losing them.

Cardano is a third-generation cryptocurrency, it is a platform that will very soon support smart contracts and dapps as well. Fast transactions with low fees have been available on Cardano for a long time, but that is just the tip of the iceberg. Cardano is a platform that can change the world! Cardano’s focus on 

, and sustainability is a focus on the future. Slow and steady wins the race!

Cardano and Sustainability

Cardano is the first third-generation blockchain – its goal is to be able to understand other blockchains and what is happening on them. We already have thousands of cryptocurrencies today and in the future there will be more, all of them focusing on specific problems or bringing a different solution, beyond decentralized money. The banking system will also be present. Now imagine thousands of blockchains and different banks, and all of these systems have their own language but they cannot communicate with each other.

The goal of Cardano is to become a decentralized currency, a cryptocurrency, yes. But it is much more than that. The ultimate goal is to bring interoperability between thousands of cryptocurrencies and the banking system. Cardano aims to create a platform that can bridge the gap and allow different chains to understand each other, send and verify transactions, etc.

Nowadays, there is no possibility for Bitcoin and Ethereum to understand each other, and sending direct transactions is impossible. You need a middle man for that, a centralized exchange (DEXes are not there yet). If you need a middle man, that defeats the purpose of cryptocurrencies, which is decentralization. Centralized exchanges become too powerful and subject to regulation, hacks, etc. The same thing with banks happens all over again.

Side-chains were proposed years ago, it is not a new solution. The goal is to send transactions across different chains, in a way that is 100% verifiable, i.e. that the person sending coins actually has them, and that it is not a double-spend. This requires structuring information in a way that can be read and understood by 2 different chains that are doing the transactions.

Let’s say all blockchains can communicate with each other. We still have a banking system that is not going away any time soon. The communication between the banking system and the world of crypto is even more complicated than communication between different blockchains. The reasons for that are metadata, attribution, and compliance. All three are almost non-existent in crypto but extremely important in the traditional banking system.

Metadata represents information about transactions, other than the amount spent. It is not important how much money someone has spent but where, on what, how long has a company existed, etc. This type of information doesn’t really exist in the world of crypto but it is extremely important in the banking system, for example, risk assessment. Metadata can be implemented on Cardano fairly easily but the problem is that it stays on the blockchain forever, and it is available for everyone to see. This information is personal and it is a problem just putting it on Cardano where anyone can have access. So the goal of Cardano is to devise a way to input metadata on the blockchain that will protect the privacy of the participants. It can be optional for people that work with the banking system, encrypting the data, restricting visibility, etc.

Attribution is information that belongs to metadata but because of its importance, it is put in a separate category. It represents information about where the money comes from and where it is going, who was involved in the transaction. It can be done on the Cardano blockchain. The problem is establishing the identity of users. If everyone had a public key, like a crypto wallet, for their identity this process would be seamless. We have the same problem with privacy as with metadata. Eventually, every user will have the option to create their public key for their identity. So, revealing the public key can be optional, it can be revealed in a restricted way, etc. This is not the case yet but it can already be done!

Every bank has to follow certain rules and regulations. For example:

All businesses that provide some kind of money service have to follow these laws, including banks. Now, in the world of cryptocurrencies, the regulation is still behind the innovation, and because of that, it is difficult to do direct transactions from a blockchain to a bank. This can be solved by implementing solutions for the first 2 problems; metadata and attribution. After that regulatory organs will decide whether a transaction complies with the laws or not. Cardano’s solutions for interoperability are already there, it just takes time for the world to catch up!

Cardano – The Third-Generation Blockchain

We covered scalability, and in our next article, we will talk about sustainability. These three goals are very complex and require an academic approach – research, publish, review, implement – the Cardano way!

Cardano aims to be the glue, the bridge that connects different blockchains with each other, and with the banking system. It aims to bring interoperability between different technologies in a seamless and streamlined way, without any interruptions. One day we will all be able to participate in a global marketplace from every part of the globe, and all that will be necessary is a smartphone.

Cardano and Interoperability

We all use money daily but we rarely stop and think about it, except when we think that we need more money. Currency or money is a medium of exchange. Its main purpose is facilitating transactions in society. So, units of a currency give us information; tell us how valuable something is, like work, commodities, food, etc.

At first, money was a commodity, something that was commonly wanted by others and it was likely to be used in a barter economy, for example, wool, wheat, etc. Overtime money evolved, and from commodities, people started using coins, iron, silver, gold, etc.

Then we got the first banks. People didn’t want to carry lots of coins around. It was heavy, and if you got robbed there was no safety net. The first bank IOU notes were issued as a receipt by the bank to the depositor. So, you would go to the bank, give them your coins and they would give you a bank IOU note that confirmed you left your coins for safe-keeping at the bank. That way you can pay for something just with a receipt from the bank. That was the start of the paper cash that we are familiar with.

Now we have different kinds of currencies, like 

digital money, legal tender, credit cards or debt

, etc. Ten years ago, Satoshi Nakamoto, threw his hat into the ring with the creation of Bitcoin, and now we have thousands of cryptocurrencies, a new financial world that keeps growing!

 In the early communal settlements, people all worked together with the common goal, which was mostly survival. There was no concept of money. As societies got more complex with the invention of farming, domestication of animals, crafts, etc, a need for exchange developed. Small communities didn’t require money still, as everyone knew everyone, and keeping tabs on who owes what was easy. But as farming, shepherding and crafts grew, the societies grew with them, and it was becoming increasingly difficult to adequately keep tabs on who owes what to whom.

Bank IOUs would have been very useful at this time. Instead, people started using commodities, common assets that would very likely be accepted in a transaction. Those were barter economies. People used common items like animal skins, tools, weapons, etc. So, for a transaction between two people to be successful double coincidence of needs was necessary. That means, if I don’t want what you offer, no deal, and vice versa. That proved not to be an efficient economic system, and a double coincidence of wants had to be solved. The solution was metal coins.

The evolution from barter gave the world currency. At first, those were coins made from different materials like iron, copper, silver, gold, etc. This greatly simplified exchanges and made the economy much more efficient. For the first coins to be accepted by all, they also had similar requirements as modern money. Kings had their faces stamped on coins, and everyone would accept those coins in exchange for goods and services. Coins of different materials had different values, which represented different denominations. Those were the first real currencies.

Some countries started using paper money earlier than others. China is the first country that used a paper currency, but all countries eventually transitioned to paper currencies, as they realized that paper is much more convenient than metal.

Banks started issuing IOU receipts to depositors. People no longer had to carry around lots of coins with them, instead, they had a note from the bank which guaranteed to anyone who held that note that the bank has the specified amount of coins and that they can retrieve them when they want. So, I buy a stove from someone and pay him with an IOU, he can then go to the bank and get the specified amount of gold or silver coins from the bank, or buy something else with the same banknote. This was the creation of paper money. In the beginning, paper money was used because of convenience and it was only issued by private banks, but its role was pretty similar to today, albeit smaller. 

Nowadays, paper money or FIAT money is regulated and issued by central banks that are established by laws or governments. Its value isn’t pegged to anything, and it doesn’t have any intrinsic value, other than being a medium of exchange. The gold standard is no longer in use, anywhere in the world.

Checks are a financial instrument that contains information like date, amount, etc. It must be signed by the payor and must contain his or her name. They can be deposited into a bank account or cashed at the bank. There are different kinds of checks; cashier’s check, money order, certified check, etc. Check, as a payment method, dates all the way back to the Roman Empire.

Credit cards are essentially debt. You pay for something with the banks' money and you enter a predetermined contract to pay it back later, with some extra charges.

The advancement of technologies brought us debit and credit cards, and then digital money. Instead of going to the bank, you can access your account from your phone and pay online. The bank never sends any paper money to the payee; it simply deducts the number from your account and digitally sends the same amount to the payee's account.

As the internet became a part of our daily lives digital currencies, online payment processors and online vendors became more and more popular. And now we are witnessing a new evolution of currencies, from centralized and government regulated FIAT currencies to decentralized and algorithm regulated currencies. This is the essence of cryptocurrencies and the reason for their appeal, giving control and power back to the people, decentralizing power, and finance.

In simplest terms, when you read FIAT, you can think of it as a currency like 

, or any other currency that is issued and regulated by a government. FIAT currencies are modern currencies that we use daily. 

 in Latin means “let it be done”, i.e. let this be our currency, let’s use this. FIAT money or currency is a medium of exchange that is regulated and issued by the government (central banks). Its value comes from the people that are willing to accept it as a form of payment, and from a country that aims to maintain the value and stability of a national currency.

Besides that, they have no intrinsic value. The value of FIAT currencies is not derived from the materials that it is made of, nor is it backed by gold or silver, like it was in the beginning. So, what gives FIAT money its value? Why is it valuable? It is valuable because people are willing to accept it for goods and services, to hold and use in the future. 

The belief in the system gives money value

. For example, the US dollar is generally accepted around the world, and because of that, it is stable and valuable, compared to other national currencies. 

For something to qualify as a currency it must meet these 5 requirements:

Units of a currency must be identical in quality and appearance so that they could be used in society. A currency must be divisible into smaller units in a way that doesn’t lose value.

Something we consider money must be made to last a long time. Coins are a great representation of durability, paper not so much. But if you have a damaged paper bill, a bank will replace it with a brand new one!

Imagine having to carry a million dollars in gold coins. Yeah, that won’t work. So now, we have paper money you can carry in your pocket and even digital money you can spend with a phone.

Everyone must know what the agreed-upon currency looks like, otherwise, it won’t work. I never heard of your money, why would I accept your funny bills?!

When accepting money, you want security. You want to later spend that money and purchase something of similar value, preferably higher. If the value of the currency fluctuates too much, it creates uncertainty on the market and fewer people are willing to accept it for goods and services.

Cryptocurrencies meet the first 4 criteria, and easily beat FIAT currencies in comparison. Price stability is not a staple of cryptocurrencies but with time as the clear winners emerge, and more and more people start using them, price stability will come. Bitcoin created a new world, and there is no stopping it now. 

The governments create money through their central banks. The central banks do so by buying government bonds or lending the created money to the commercial banks with interest. The governments use the money for military, social, healthcare, and other programs, while the commercial banks use that money to give out loans to those that want them.

Nowadays, only a percentage of new bills are printed during the creation of money. In most modern countries it is done digitally by releasing the digital currency to the commercial banks as loans or by buying government bonds.

Debt is a certain amount of money that someone borrows from a bank and must return with interest. It is a financial tool that, if used properly, can generate a profit for the borrower and the bank. Let's say someone borrows 10 million dollars, then they create a business that is sold for 100 million dollars. This is a win-win situation for the borrower and the bank. Even though debt is often perceived negatively, it has its place and purpose in a healthy economy, as long as it is not rampant and borrowers make payments on their loans. This is an oversimplification but you get the picture.

Inflation of a currency means that the purchasing power of that currency goes down over time. It is expressed as a percentage and it is often represented through an average shopping basket. Let’s say that last year you could buy 10 apples for 10 dollars, and this year, because of the inflation, you can buy 9 apples for 10 dollars – that is 10% inflation.

Inflation occurs when the supply of money outpaces economic growth. For example, if the economic growth was 5% last year then the money supply should be 5% bigger to have 0% inflation.

Inflation is controlled by central banks through money creation and interest rates. A certain level of inflation is desired because that promotes spending money instead of keeping it in a bank where it depreciates. That leads to future economic growth. The inflation of the US dollar has drastically increased since the seventies, and it keeps going up.

A central bank is a financial instruction that was given power, by the government, to create and distribute money, control interest rates, and create national monetary policies. Some of the central banks are owned by the country in which they operate while others are not, but they are all established and regulated by laws. Central banks are legal monopolies, since commercial banks cannot create money, monetary policies nor can they control interest rates.

Central banks create rules and regulations for commercial banks and control the money supply by creating new money and increasing or lowering interest rates. Lower interest rates are implemented when the central banks want to encourage borrowers and to grow the economy, and vice versa.

They regulate the minimal reserve requirements that commercial banks must-have. Depending on the country that can be anywhere from 3% to 10% of the total deposits. So, if all the depositors demanded money from their commercial banks they would be unable to pay since they have lent it.

Central banks are emergency piggy banks. When something goes wrong with a financial intuition or the government requires large sums of cash, it doesn’t go bankrupt, it gets a bailout. Central banks do so by creating money or buying government bonds. That causes further inflation of the currency since the money supply suddenly goes up. Bailouts are finally covered by taxpayers, either through inflation or taxation, or both.

Comparison of Cryptocurrencies and FIAT currencies

Blockchain is an immutable decentralized distributed ledger – everyone that is involved in running the network by mining or running a pool has a copy of every transaction that has ever happened on the blockchain. It cannot be changed, falsified, counterfeited, etc. That makes cryptocurrencies possible. Since there are thousands of people running the network, no one person, country, or company can control it. The network is governed by its protocol (algorithm) and all changes are made by voting of the participants. It is democracy personified!

We explained what central banks do and how far-reaching their decisions and policies are for everybody. That is why decentralized money, which is not governed by countries and people behind closed doors, but governed by an algorithm and its users is so important, even revolutionary!

Why are Cryptocryptocurrencies Better than FIAT Currencies?

Cryptocurrencies are decentralized, and that means no one government, company, nor individual can control a cryptocurrency. Every blockchain has an algorithm that governs the issuance of new coins, and all big changes to the blockchain are made by voting. That makes cryptocurrencies stable and predictable. FIAT is centralized and controlled by central banks and government policies. The decisions they make are about monetary policies are made behind closed doors and oftentimes they are not in the best interest of the people.

Everything that FIAT money offers, cryptocurrencies also offer, and in the future, they will provide for so much more.

Cryptocurrencies are deflationary by design, they have a cap on the number of coins that will exist. Unlike FIAT money that is infinite as the FED representatives 

While FIAT money depreciates through the years, cryptocurrencies appreciate.

FIAT can be counterfeited, cryptocurrencies cannot.

Cryptocurrencies address various problems that no other technology can successfully solve. FIAT money is used for transactions only.

FIAT has no intrinsic value while cryptocurrencies do. For example, since the records on the blockchain are immutable, they can be used as proof of ownership, they can prevent misuse of public funds, votes on the blockchain cannot be stolen, etc. Cryptocurrencies are more than just a medium of exchange, they are tools that solve many problems.

You can oftentimes hear sceptics on the news saying that cryptocurrencies are only good for money laundering and other criminal activities. What in the hell did those criminals do before the invention of cryptocurrencies, I 

The Concept of Money and Cryptocurrencies

As we said, FIAT money is a medium of exchange. It provides us information about the value of goods and services. It is used by people, companies, governments, etc. Its functions are to facilitate transactions, measure value, and store value over time, etc. The control of FIAT money lies in the hands of the few that make all the important decisions about money that affect us all. On the other hand, cryptocurrencies provide everything that FIAT currencies provide with an important difference, decentralization. Control of cryptocurrencies is in the hands of the people that use them, and they are governed by algorithms and by transparent voting that can’t be tampered with.

Blockchain technology, which makes decentralized cryptocurrencies possible, makes possible everything that FIAT money does, and more. Besides using cryptocurrencies for transactions, now we see emerging decentralized finance or DeFi projects popping left and right. Artists are selling their songs and other creations on the blockchain, keeping all the profits for their work! We can verifiably track our food from the field to our plate thanks to blockchain technology. There are decentralized markets, banks, storage services, games, workplaces, businesses, etc. Now, keep in mind that even though Bitcoin was created in 2009, this is still a developing world, and there are a lot of unfinished projects, projects that will fail and be forgotten, just like in the early days of the internet. But that also means that there is great potential for the future!

Will cryptocurrencies replace FIAT money? We are optimists, so we hope so! But even if they don't, cryptocurrencies will have a much bigger role than they have today, their use will be more regulated, and they will disrupt many industries and change them for the better. But will they completely replace government-issued money? Who knows, all we can do is work and hope for the best. 

Banks and companies are already working on their own blockchain solutions, and eventually, they will start implementing them in their businesses. Those blockchains will be centralized and they will help the banks and businesses have a more efficient way of doing business, but they will not be decentralized. That is an important distinction.

We believe that the world would be a better place if we just put everything on decentralized blockchains; political financing, government spending, voting, you name it, we say put it on the blockchain! The world is changing and in the future, there will be god-knows-how many cryptocurrencies that will solve different problems, other than transferring value almost instantly across the globe with low fees, since that problem they already solved!

We had to write a longer article about this topic, and we only fear that it is not too short and that we were able to paint a clear picture of cryptocurrencies and their importance as a medium of exchange, store of value, and tools for solving different problems! FIAT money has gotten us this far but there’s a new sheriff in town. Do your own research!

The evolutionary history of money from barter to cryptocurrencies | Britannica

Central Bank Definition (investopedia.com)

Money and Importance of Cryptocurrencies

People that own ADA, the cryptocurrency of Cardano, can 

 to a staking pool/node. Okay, let's break that down.

Cardano is the name of the network, and ADA is the cryptocurrency that is used on that network. 

 keep the network running, secure and they validate all the transactions on the Cardano network. The more ADA there is on a node, the bigger are the chances of it getting picked to confirm the next block, and getting the block reward. Now, a 

 that is open for everyone to stake/delegate their ADA. In the case of staking pools, the block reward and transaction fees are divided based on the percentages that make up the total stake in the pool. 

pool. There are 10 delegators and each one has delegated 10 ADA coins, i.e. the reward is divided so that everyone gets 10 percent.

Just after a node goes live on the Cardano network, it becomes open for anyone to delegate ADA. People that are holding or not planning to sell anytime soon, can simply delegate their ADA coins and earn more ADA while participating in creating the network consensus. That is all about delegating ADA in a nutshell. We are going to go over it a bit more in-depth through the article.

Cardano’s blockchain measures periods that are about 

. So, if an epoch starts in the middle of a Monday it will end in the middle of a Saturday. The next epoch begins in the middle of a Saturday and so on.

Cardano epochs are important because they determine when you will see the rewards from your stake. You can see the current epoch and the time before the next epoch in your Daedalus wallet.

At the start of a new epoch, the network takes a snapshot. A snapshot is like a print screen, it records ADA stakes on all staking pools that were delegated in the previous epoch.

 In the beginning, a snapshot of stakes in Epoch 1 is taken.

 The network uses the snapshot information from Epoch 2.

So the first time you delegate, the reward is paid out after 15-20 days and 

Cardano’s cryptocurrency, ADA can be stored in two wallets, Daedalus and Yoroi.

 is the heavier version of the two, it is a full-node wallet. That means that Daedalus downloads the 

 so that the network can be decentralized and it doesn’t depend on centralized servers. Daedalus can only be installed on a laptop or a computer.

is the light version, it connects to servers that have copies of the Cardano blockchain. It doesn’t have a copy of the blockchain. Yoroi wallet can be used as a browser extension or installed on a smartphone.

 full control of your ADA coins. You can withdraw your ADA whenever you want or delegate to another pool at any time. You can spend ADA while you are delegated. The pool can’t spend your ADA, and even if it gets hacked your ADA will be safe, because the pool doesn’t have your spending key.

First, you need to download the Daedalus, and you can find it here. Just choose the operating system and the download will begin. You can find it 

2. Create a New ADA Wallet or Restore an Old ADA Wallet

After the installation is complete open the Daedalus wallet, it will have to get synced with the blockchain, and that might take some time, an hour or more.

You will be prompted to either create a new or restore an old ADA wallet with your recovery phrase.

3. Move your ADA from an Exchange to Your Daedalus Wallet

After you have created a new wallet, send your coins to your new Daedalus address from your exchange. Keep in mind that if the wallet is not fully synced you might not see the coins in your wallet until it completely syncs with the network. Just click on the share button for any address you want to use. You will see a pop-up that allows for QR code scanning or you can simply copy your receiving address.

Now that your wallet is synced and your ADA coins are in your wallet, you are ready to delegate and start earning ADA.

On the left side of the wallet, there is a navigation bar, the first icon is your wallet and the second icon is the “Delegation center”. Here you can look up different stake pools, see your rewards, etc.

Choosing and delegating to a stake pool is very simple with the Daedalus wallet. Just go to the second card named “Stake pools”. Here you have a search bar where you can find a pool by their ticker or their pool ID. If you don’t know which pool to choose, then it’s even simpler, choose our pool! 

Once you type in RHEA, a little block will appear and after you click on it, you will see a pop-up with some information about our pool. At the bottom will be the “delegate” button. It’s easy as 1,2,3.

Yoroi can be installed on Android, iOS, or as a browser extension. Supported browsers are Chrome, Edge, and Firefox. You can find it 

2. Create a New or Restore an Old Yoroi Wallet

When creating a new wallet, you have to name it and choose a spending password. Make sure you choose a secure one. Then you will see the recovery phrase. Write it down and keep it somewhere safe. That’s it, your wallet is ready.

You bought some ADA on an exchange, and now, you can start delegating. But first, you need to move your coins to your wallet. Go to receive, copy your address and send your ADA from your exchange.

Go to the delegation center, and start the search for pools by their ticker, same like with Daedalus. Our pool’s ticker is 

. If you type that in, you will see our pool information and the delegate button. Ok, now click delegate.

Sure, why not!? Just create a new wallet or send your ADA to another address, and done. You can also redelegate to another pool whenever you want, and spend your ADA even while delegated. There are no restrictions, they are your coins after all!

As you see, staking is very simple and important for the Cardano network. It helps the network to operate more efficiently while people that run staking pools and people that delegate can earn ADA. There are also some rules to encourage people to delegate to smaller nodes instead of just delegating with whales, to achieve complete decentralization. So, if you don't choose our RHEA POOL, choose a small pool that you like and support decentralization! Anyway, 

Simple Guide to Delegating Cardano ADA

Once a person gets into the world of cryptocurrencies they find a lot of confusing words and acronyms. This can be overwhelming for newcomers, and it is an obstacle one must overcome to continue the journey. Because of this, we decided to compile a list of basic crypto terms that every beginner should understand.

They are not listed in any particular order, and we are not going to cover everything, but just enough to help people understand crypto and blockchain basics.

 – Originally a typo on a forum meant to be HOLD. It means don’t sell. Just HODL.

 – Person or persons that invented Bitcoin, identity unknown.

 – One Bitcoin can be divided into 100 million Satoshis.

 – A decentralized distributed ledger that records all transactions that have ever happened on it. Blockchain is the technology, cryptocurrency is the first application of the technology.

 – A form of digital currency that is decentralized and runs on top of a blockchain.

 – It is the name for the first block of a cryptocurrency.

 – It represents all the transactions that have happened on the blockchain, that were confirmed by miners in a certain timeframe. The timeframe is different for different cryptocurrencies, it is 10 minutes for Bitcoin. So, all the transaction that the miners confirm and write on the Bitcoin blockchain in 10 minutes

 – It can be a synonym for cryptocurrency or it can mean 1 unit of a cryptocurrency. For example, I have 10 ADA, i.e. I have 10 coins of ADA.

 – After you send coins, the blockchain validates the transaction. Usually, two confirmations are enough.

 - Every transaction has its own unique ID that can be looked up in the blockchain explorer (different blockchains have different explorers). A transaction ID can tell you the public addresses of the participants, the amount sent, and the date of a particular transaction.

 – Every transaction has a fee. Depending on the blockchain it happens on, the fees differ. On PoW networks, transaction fees go to the miners that facilitate the transactions by running mining computers, and confirming transactions in the new block. On PoS networks the fees are paid to the node that confirms the transactions. Transaction fees are paid by people that send the transactions.

 – Digital money can be copied and spent more than once. Not cryptocurrencies. Bitcoin was the first to solve the problem of double-spending, and that made cryptocurrencies a viable option.

 – A person that runs mining computers to confirm transactions, secure and run the network.

 – Process of computers confirming transactions on the blockchain by solving cryptographic puzzles. It also keeps the blockchain secure.

 – Rewards that miners get for mining the next block on the blockchain. When the new block is added, the network creates new coins. Those new coins are paid to the miner who added the new block. For Bitcoin that means 12.5 new coins for every mined block. 

 – A field of mathematical and computer science that is the foundation of blockchain technology and cryptocurrency, hence the name cryptocurrency.

 – Bitcoin is the original, so any coin that is not Bitcoin is an altcoin.

 – An app that can be installed on your phone or computer. It is used for keeping your coins and spending them. The name hot storage simply means that your wallet can connect to the internet.

 – A paper or hardware wallet. It is also used for storing your coins. The difference is that it can’t connect to the internet which makes your coins safer.

 – Never reveal your private keys to anyone. This is how you control your funds. It is like a password for sending money, and anyone who has it can use it to send any amount.

 – This is where you receive coins from others. So if someone wants to send you some coins, then you share with them your PUBLIC KEY.

 – When you install a new wallet, at the beginning of the process you will get a recovery phrase or 

. It can be anywhere from 12 to 24 random words. You should always write them down and keep them safe. If you lose access to your wallet, you can use the recovery phrase to regain control of your coins.

 – Every crypto project has some kind of a whitepaper. It is a document that outlines the problem that a particular cryptocurrency is addressing, how it is solving the problem, and the technology used to solve the problem.

 –Person to person connection, cutting out the middleman. 

: when you use an app to pay your phone bill, the transaction goes like this; you send a request then it goes to the bank’s server, and then the bank approves the transaction and sends your money to ATT. 

 – It is a way of achieving consensus about transactions on a blockchain. It is done by computer algorithms. Different cryptocurrencies use different variations.

 – A group of miners that combine their computational power to increase their chances of mining a block.

 – A way of achieving consensus about transactions but instead of using computational power, owners of coins stake their coins to get a chance to confirm transactions (there is no mining).

 – One person runs a node, and others can delegate their coins to the node. This way they increase the chances of a node being chosen to confirm a block. They receive transaction fees, and everyone that delegated gets a portion of the fees.

 – A computer connected to a PoS network, that is always online and waiting to be chosen to confirm a block.

 – Organized move of buying large amounts of coins of a particular cryptocurrency to raise the price. After the price goes up and others start buying coins, pumpers sell all their coins at a higher price.

 – Organized move of selling coins to lower the price of a cryptocurrency. After unknowing people in the market start also selling the dumpers buy their coins at a lower price.

 - A large number of altcoins or shitcoins that someone is holding after the price significantly dropped.

 – An altcoin that has no real value, bad investment choice.

 – When a new project announces its launch, before their mainnet goes online, they sell their initial coins as a way to raise money to fund the development of their project.

 – A National centralized paper currency.

 - A person that thinks Bitcoin is the only good coin and refers to all altcoins as shitcoins. 

 – Someone who has large amounts of coins of a particular cryptocurrency, so many coins that they have the power to influence the market.

 – A feeling or a prediction that the price of a coin will fall.

 – A person that thinks/says the price of a coin will fall.

 – A feeling or a prediction that the price of a cryptocurrency will go up.

 – A person that thinks/says the price of a coin will go up.

 – The highest price level of a cryptocurrency.

 – The lowest price level of a cryptocurrency.

 – Usually relates to news/stories/forum posts that spread Fear, Uncertainty, Doubt.

 Don't just trust everything your read, verify, research. 

 – When the price starts going up, people start fearing they will miss out on an opportunity. Fear of missing out.

 – When you are happy that you didn’t buy and you saved your funds. The joy of missing out.

 – The amount of money someone has earned by investing in cryptocurrencies.

 A phrase that is often used. It means you should buy or buy even more coins when the price goes down.

 – Meaning that the price of a coin will go up by a lot. Bitcoin to the Moon!

 – A blockchain update on which not all miners agree on. The common result is two or more different blockchains. The new blockchain can’t process old transactions and blocks, and the original blockchain can’t process the transactions on the new blockchain. Some miners remain on the original chain (those that don’t agree with the update), others go on the new chain (those that supported the update). An example: Bitcoin is the original blockchain, Bitcoin Cash was created after a hard fork.

 – A blockchain update on which a large majority of miners agree on. The blockchain continues to operate normally with a new update.

 – Represents the total number of blocks that have been mined on the blockchain so far.

 – A site where you can buy and sell cryptocurrencies.

 – Just like a regular exchange it is a place to buy and sell cryptocurrencies with an important distinction, it runs on a blockchain and it is decentralized. That means it cannot be controlled by a company, country, etc.

 – Some exchanges require identity verification, under AML laws.

 – Before a new cryptocurrency goes online for everyone to use, they 

 their protocol with a limited number of participants.

 – A bubble is a market that is highly overvalued and the real price is much lower. For example, the housing market in the USA in the years leading up to 2008 was a bubble. Some realized this but it was already too late to change what happened in 2008. The Big Short is a good movie. Bitcoin was declared dead, a bubble, worthless, thousands of times, and now in 2021, the price has never been higher.

 – The number of coins on the market multiplied by the price per coin.

 – It refers to how fast and easy it is to buy a cryptocurrency without influencing the general price on the market. The higher the liquidity, the less influence a standard purchase of a cryptocurrency will have on the market price, and vice versa. High liquidity means a more stable market for a particular cryptocurrency. 

A growing blockchain ecosystem that aims to decentralize finance. Lending money, borrowing money, savings accounts, etc.

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