IOG, the company behind the Cardano blockchain, is releasing a new privacy-centered network called Midnight, along with a cryptocurrency called Dust. IOG CEO, Charles Hoskinson, announced that Midnight, which is based on zero-knowledge-proof technology will go beyond other privacy coin projects by delivering zero-knowledge smart contracts. This news was shared during an event at Edinburgh University in Scotland.

Investors who were staking Cardano up until now have deep knowledge of the currency, but this article will focus on existing and potential investors looking to reap its benefits. Before we continue with details on the new Midnight network, let’s take a brief overview of ADA Cardano and whether it’s worth investing in.

Cardano Overview

Cardano is a blockchain that uses fewer resources than PoW blockchains. The currency was named ADA after Augusta Ada King, who many consider to be the first computer programmer. Cardano utilizes a PoS consensus mechanism where users are rewarded with ADA for participating in a stake pool.

Charles Hoskinson developed Cardano over a two-year period from 2015 to 2017. Cardano is an up-and-coming Ethereum competitor. Both systems are used for things like smart contracts and share the objective of constructing a decentralized network.

Cardano is a blockchain platform that strongly rivals Ethereum in terms of future potential. It advertises itself as the third generation, while Ethereum remains the second generation. However, not only does Cardano seek to provide better speed, scalability, and security than its contemporary competition, but it also has a goal of helping those who don’t use traditional banking.

PoS vs. PoW Difference

Cryptocurrencies use two main methods to verify transactions: proof of work and proof of stake. With PoW, used by Bitcoin, users must solve complex puzzles before their transaction is added to the blockchain. This process is also known as crypto mining.

The other primary method for consensus, PoS, is more efficient with resources because it does not use crypto mining to verify transactions. Instead, several random validators confirm the accuracy of a transaction before it joins the blockchain.

The Cardano platform operates through the Ouroboros consensus protocol in order to reduce energy expenditure. This is done by substituting PoW mining, which requires substantial computing resources, for a more efficient PoS algorithm.

Staking Cardano

Staking Cardano is a great way to earn passive income and support the growth of the network. It involves using your ADA tokens to lock them up in a stake pool. This creates an incentive for node operators, with rewards proportionate to the amount of stake they have in the pool.

Staking helps secure the Cardano network and gives ADA holders the opportunity to participate in delegating their stake or running a stake pool. Staking rewards are distributed monthly or quarterly, depending on the network’s blockchain protocol, and can be quite lucrative if done correctly.

Cardano’s Midnight

Hoskinson stated that Midnight has progressed privacy-coin technology to where everything is anonymous, much like zCash and Monero did. This new way of writing and running private smart contracts enables you to do things like run a decentralized exchange or mine data sets while keeping your information discreet.

Although privacy coins have been greatly appreciated by those who believe in crypto libertarianism, regulators are weary of how the technology might help fund criminal activity. However, Hoskinson noted that since privacy is something every business should explore from a legal standpoint, it’s time to start thinking about ways to add privacy features to blockchains, even though it may be difficult to figure out how best to do so.

In order for the protocol to be effective, programmability is necessary. This also means that taking Zcash and simply forking it will not work. Rather, what is needed are developers who can write the code in a common programming language such as JavaScript, so that privacy is guaranteed.

The new blockchain generated interest in enterprise blockchains. For example, Midnight will be working with Hyperledger, a group of big companies working together to explore private ledgers for things like supply-chain management. This is something enterprises look for.

Bottom Line

Cardano’s developers have lofty plans for the platform. They eventually envision it as being fully decentralized, with voting and treasury management capabilities built into the blockchain itself. From this standing point, Cardano has a bright future ahead, and if you consider investing, now might be the right time.