Cardano is finally starting to live up to some of its early promise as it continues to construct for the future.
Cardano (ADA 5.22%) has rarely been flashy or sexy, but it has consistently been one of the top 10 cryptocurrencies by market capitalization. Even some have referred to it as “really boring.” Cardano rose to a peak of just over $3 even at the height of the cryptocurrency craze. Every time a rival blockchain, like Ethereum (CRYPTO: ETH), introduces a new innovation, it seems like Cardano is always late to the party.
But Cardano might finally be poised to fulfill its early promise and compensate investors with a long-term perspective. A technology upgrade (known as Hydra) that will make the Cardano blockchain faster, more interoperable, and more secure could be the major catalyst in 3Q 2022. Additionally, this upgrade will give developers more freedom to create brand-new dApps, or decentralized applications, on top of the Cardano blockchain.
The implications of the new upgrade for Cardano
The “layer 2 scalability solution” that Cardano refers to as the Hydra update entails that Cardano will be able to add more users, more developers, and more applications in the future without suffering any speed or performance losses. Charles Hoskinson, the creator of Cardano and a co-founder of Ethereum, has noted that the new update is all about scaling and enhancing performance for the more than 3 million different wallets that hold ADA. According to Hoskinson, Cardano should theoretically be able to process more than 1 million transactions per second if everything goes as planned. Comparatively, Solana (CRYPTO: SOL), the current fastest blockchain, can process between 65,000 and 70,000 transactions per second.
The possibilities for Cardano could be endless given this increased capacity. When it comes to non-fungible tokens (NFTs), for instance, blockchains like Ethereum and Solana receive all the attention, but Cardano now appears to be making a strong play to partake in more of the action. NFTs now make up about 40% of all new activity occurring on the Cardano blockchain, according to Hoskinson. A new, eagerly anticipated NFT collection from comedian and actor Martin Lawrence is the most recent high-profile launch.
The race is won by steadiness and speed
Cardano has undoubtedly received criticism for its slow rate of development from those in the tech industry who prefer to break things first and ask questions later. This is in part because of how Cardano updates its blockchain. An evidence-based software development process akin to an academic, peer-reviewed process is at the core of the Cardano approach. The first blockchain protocol based on peer-reviewed research is something that Cardano takes great pride in. This strategy slows down development but guarantees that new software upgrades perform as intended.
In the end, going steadily faster might be the way to go. Cardano appears to be gaining momentum now, despite appearing to lag behind in some developments. As an illustration, Cardano adopted smart contract functionality as part of its Alonzo upgrade last September.
Keeping your composure and sense of reality when others are not
Charles Hoskinson, the founder of Cardano, has experienced many bear markets in the cryptocurrency industry over the past ten years and has seen it all. He recently stated in an interview that “bear markets are actually quite comfortable” because they allow you to concentrate on getting the fundamentals right and creating for the future.
Hearing those words during a market downturn is consoling. Cardano might end up being one of the safest cryptocurrencies to hold in a bear market once its new tech upgrade is finished.