Yet another exciting contrast is that Bitcoin and other trending cryptocurrencies are grounded on **proof of work** (PoW) consensus mechanisms. However, Cardano uses a **proof of stake** (PoS) consensus mechanism, making it a more sustainable and scalable blockchain.
Cardano’s consensus mechanism uses mathematical principles and a unique multilayer architecture, making it stand out in the next generation of cryptocurrency solutions.
Cardano smart contracts (aka ADA smart contracts) are quite similar to the Ethereum blockchain. Dubbed as a rival to Ethereum, the Cardano smart contracts act as executable programs running on the Cardano blockchain.
Smart contracts are like digital agreements between two parties. The transactions (or the outputs) are the outcome of execution when specific prerequisite conditions (or inputs) are met. Once the conditions are met, the transactions automatically execute. These outputs (or transactions) sit on the Cardano blockchain forever.