Cardano (CRYPTO: NO) is one of this year’s cryptocurrency winners. It is heading for an increase of more than 700% – and catalysts remain in sight for the young and innovative player. Many refer to Cardano as a crypto giant in the same breath ether. That’s because a co-founder of Ethereum founded Cardano. The question now arises whether Cardano can complete its development and become one of the world’s most important crypto players. Let’s take a closer look.
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Are you taking too much time?
Adria Cimino: I often write about Cardano’s potential. But this young cryptocurrency also carries a reasonable level of risk. And that’s because Cardano’s development is far from over. The crypto has released a five-step roadmap outlining the work to be done. At certain stages, work is carried out at the same time. And that’s why it’s very difficult to say when the project will actually be completed. So one problem is that we don’t know much about when Cardano will achieve its goals.
The next problem is speed – or the lack of it. I’m not talking about the time it takes to process transactions on the blockchain. Instead, I’m referring to the time it takes Cardano to roll out updates – and hit the crypto finish line. What is Cardano holding back? It is a peer review system. Cardano asks colleagues to review any changes or updates. If they nod, the changes go live. I like this idea because it means that what is being done is likely to work. It reduces the risk of blockchain instability on the road. But the downside here is: it slows development. And opens the door to the rivals. This could be a big problem right now, given the gold rush atmosphere in the crypto world. Platforms run for their tracks. And investors are racing for tomorrow’s winners. It is tempting to invest in the player who moves the fastest.
Finally, there is a risk for Cardano investors: Since Cardano is still in development, anything can happen. It might stumble somewhere in its path. That could slow things down or lead to unexpected changes in the plan. Of course, this is a risk that many other young cryptos face. So Cardano is not alone. Cardano is a promising player, but it is important to keep these risks in mind before making any investment decisions.
The race will win slowly and steadily
Rich Duprey: One of the more attractive aspects of Cardano is how it methodically works through each of the five different phases of its roadmap, allowing each new set of functionality to improve the functionality of the entire network.
Cardano is currently in its third or goguen phase after implementing its Alonzo hard fork in September which not only introduced smart contracts or self-executing, programmable agreements, but also added the ability to create decentralized applications (dApps) . It will eventually support decentralized exchanges (DEX) as well.
Cardano’s new features typically also offer adaptability and scalability, while using less energy to mine than their competitors. It also charges lower transaction fees.
Cardano is currently the fifth largest cryptocurrency in the world by market capitalization (although the rankings change almost daily), Cardano has been peer-reviewed, data-driven and developed with a team of engineers and academics. This transparency, coupled with a focused rollout, has helped to minimize volatility.
Sure, carefully following a pre-established roadmap means it can be slow at times compared to what other cryptos do, but it does make sure to check all the boxes, reducing the chance of a mistake from rushing to market.
There are a number of new projects going on, including a peer-to-peer crypto trading platform, a digital art marketplace, a decentralized exchange for different types of Cardano tokens, a non-fungible tokens (NFTs) marketplace, and more some critics see the elongated timeline as a bit of a burden as it will take years to bear fruit. It just takes too long.
In reality, it just means that there are regular opportunities to further enhance its utility while it works to be the “Ethereum Killer”.
While almost every crypto will be called that, Cardano’s next phase of development – Basho – will improve the scalability of its network by introducing sidechains that don’t compromise its security – its developers will focus on sustainability. These include voting and treasury systems or decentralized decision-making mechanisms for funding blockchain development and maintenance projects, a bottom-up approach that ensures community priorities are funded.
There is a lot of growth for everyone, but Cardano’s carefully crafted strategic plan suggests that for everyone else it is the turtle of the crypto world, still has merit, and has significant future value.
A long-term perspective
Cardano’s roadmap and use of peer reviews can slow development down to some extent. And that could weigh on Cardano’s price and market position from time to time. But in the long term, stable, well-constructed blockchains should take the lead in this competitive field. That means Cardano’s strategy is spot on today – and the efforts could now pay off in a big way.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all reflect critically about investing and make decisions that will help us get smarter, happier, and richer.
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