Ethereum's dominance over Blockchains could be coming to an end as Cardano approaches the next phase of its long-awaited development.
Cardano is a blockchain project looking to create a fairer, more transparent platform for its users and position itself as a market leader over its biggest competitor, Ethereum.
Now, it’s finally starting to prove itself when the Cryptocurrency industry needs it most.
Cardano is the first blockchain network that is peer-reviewed and assembled by industry experts, setting itself apart through its approach in creating a research-driven, open-source blockchain.
It was launched in 2017 by Charles Hoskinson, a renowned mathematician and co-founder at Ethereum. Following his departure from the Ethereum project, he founded IOHK, which is responsible for the development of Cardano.
Since then, Cardano has become one of the fastest-growing projects in the industry, becoming a prominent figure in the Market Cap top-10 and considered a front-runner in the race for blockchain dominance.
Cardano explained like you’re five
Cardano and its native token, ADA, run on the Cardano blockchain. Users can build DAPPs (Decentralised Applications), protocols and smart contracts on Cardano.
Cardano was built to tackle the issues modern blockchains face, most notably network scaling and handling large amounts of transactions. It plans on achieving this through advanced functionalities and by using code influenced heavily by mathematics.
It differs from traditional blockchains via its two-layer design; Layer one, the “settlement” layer, handles all ADA transactions whilst the second, known as the “computational” layer, hosts all smart contracts on the network.
Products already built on Cardano focus on traceability, product authentication and digital identity, with innovations and modern adaptation expected in the industry.
In the future, Cardano may find itself becoming an in-demand network provider for those seeking to expand into these industries.
However, despite the considerable market cap of Cardano, its development and use cases remain limited, with stunted network growth and missed timelines reducing investor confidence.
In terms of development, Cardano is still in its early stages, and has yet to reach full network maturity. Based on their roadmap, there are five development phases:
The foundation stage of development introduced the buying and selling of ADA and the popular Daedalus desktop wallet, mainly used to redeem and secure ADA safely.
Next is Shelley, which launched in July 2020. It focused heavily on Decentralization and introduced staking rewards and pools for users.
The Goguen phase introduces more technical capabilities for users through the creation of smart contracts and DAPPs. This is due to be launched in Q2 2021.
Basho is the scaling phase, designed to optimize the Cardano network and ensure that it remains operable with other blockchains and native tokens.
The final phase will introduce voting and governance, giving users more control of future development decisions and paving the way for the evolution into a fully decentralized network.
The native token, ADA, is used mainly as a value transfer system, similar to cash.
There’s a total of 45bn ADA tokens in circulation, which users can send and transfer worldwide instantly without paying large network fees.
ADA is used by developers to power and develop smart contracts and for voting on potential changes to the protocol, a feature not often available within the industry.
The most beneficial and appealing use of ADA for investors is in staking pools and nodes, allowing holders to assist with block validation and approval and receive rewards from their investment.
The process can be complicated, so Cardano explained everything you need to know in a handy beginners guide.
A Hard Fork named Mary
Cardano recently upgraded their network through a “hard fork”, transforming the network from a single-asset to a multi-asset blockchain.
The hard fork, named “Mary”, allows users to create and define their own tokens similar to ADA on the Cardano network.
Enabling new token creation is seen as a progression towards full smart-contract functionality. It also follows in the footsteps of Ethereum, which saw a massive surge in price following a similar network upgrade.
It’s expected that the hard fork will accelerate network growth through the creation of competitive native tokens, increase the market capitalization of ADA and further empower users of the network.
With the introduction of Mary and the Goguen phase, Cardano will be at the forefront of existing blockchains, and due to the rigorous development of the network, it could be even more advanced than its competitors when introduced.
Ultimately, the Goguen phase will propel Cardano forward through the collective input, creative nature and entrepreneurial spirit of token creators.
Allowing every ADA holder the opportunity to create assets will see new DAPPs built, NFT’s created and utility tokens minted, attracting even greater attention and investment.
Most importantly, it will finally allow Cardano to go head-to-head with Ethereum.
Is the future on Cardano or Ethereum?
The most realistic answer is... nobody knows.
With Cardano's roadmap just starting to come to fruition and Ethereum 2.0 still in development, it’s difficult to choose a future market-leader as neither project has peaked yet.
Based on recent performance, Ethereum is still the blockchain powerhouse it has always been, both in total market cap and industry use cases.
However, despite smart contracts already existing on Ethereum, Cardano’s consistent development indicates that it’s starting to catch up to its proverbial big brother.
Ethereum has also recently been hampered by scaling issues and sky-high gas fees when interacting with smart contracts.
Now, investors are starting to see the long-term potential of building on Cardano over Ethereum. Cardano was built to address the many issues faced by early blockchain projects, tackling each carefully through its 5 phase development cycle.
Patience is often overlooked in a fast-moving industry like Cryptocurrency, but in the case of Cardano, they've bided their time carefully and playing the long game looks to have worked wonderfully.
If Cardano can fulfill their roadmap and deliver what's promised, a new leader in the long-running battle of blockchain superiority over Ethereum may finally emerge.