Cardano (ADA 4.47%) is one of this year's cryptocurrency winners. It's heading for a gain of more than 700% -- and catalysts remain on the horizon for this young and innovative player. Many refer to Cardano in the same breath as crypto giant Ethereum. That's because a co-founder of Ethereum went on to create Cardano. Now the question is whether Cardano can complete its development and become one of the world's most significant crypto players. Let's take a closer look.
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Taking too much time?
Adria Cimino: I often write about Cardano's potential. But this young cryptocurrency also comes with a fair share of risk. And that's because Cardano's development is far from over. The crypto has launched a five-stage roadmap outlining work to be done. Work on certain stages is happening simultaneously. And that's why it's very difficult to say when the project actually will be complete. So, one issue is that we don't have much visibility on when Cardano will reach its goals.
The next problem is speed -- or 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 will take Cardano to roll out updates -- and get to the crypto finish line. What's holding Cardano back? It's peer review system. Cardano asks peers to review any potential change or update. If they give the nod, the changes go live. I like this idea because it means what's being done is likely to work. It reduces the risk of instability on the blockchain down the road. But the downside here is this: It slows down development. And opens the door to rivals moving ahead. This could be a big problem considering the goldrush atmosphere in the crypto world right now. Platforms are racing to make their mark. And investors are racing to choose tomorrow's winners. It's tempting to invest in the player who is moving fastest.
And finally, a risk Cardano investors face is this: Since Cardano still is under development, anything can happen. It could stumble somewhere along its path. That could slow things down or lead to unexpected changes in the plan. Of course, this is a risk many other young cryptos face. So Cardano isn't alone. Cardano is a promising player, but it's important to keep these risks in mind before deciding whether to invest.
Slow and steady will win the race
Rich Duprey: One of the more attractive aspects I find in Cardano is how it methodically works through each of the five distinct phases of its roadmap, allowing every new set of functionality to enhance the overall network's functionalities.
Cardano is currently in its third, or Goguen, phase, after implementing its Alonzo hard fork in September, which not only ushered in smart contracts, or self-executing, programmable agreements, but also added the ability to build decentralized applications (dApps). It will also eventually support decentralised exchanges (DEX).
Cardano's new features also tend to offer adaptability and scalability while requiring less energy to mine than its rivals. It also charges lower transaction fees.
Currently the fifth largest cryptocurrency globally by market cap (though standings change almost daily), Cardano was peer-reviewed, data-driven, and developed with a team of engineers and academics. That transparency, coupled with a focused rollout, has helped minimize volatility.
Sure, fastidiously following a preordained roadmap means it may be sometimes slow out of the gate in comparison with features offered by other cryptos, but it ensures that all the boxes get checked, reducing the odds of an error occurring from rushing to market.
There are a number of new projects under way, including a peer-to-peer crypto trading platform, a digital art marketplace, a decentralized exchange for different types of Cardano tokens, a non-fungible token (NFTs) marketplace, and more, but some critics see the extended timeline as something of a liability because they will take years before coming to fruition. It's just taking too long.
In reality, it just means there are regular opportunities to continue enhancing its utility as it works on being the "Ethereum killer."
While just about every crypto has been dubbed that, Cardano's next phase of development -- Basho -- will upgrade the scalability of its network by introducing sidechains that won't degrade its security, which will be followed by its "Voltaire" phase, when its developers will concentrate on sustainability. That will include voting and treasury systems, or decentralized decision-making mechanisms for funding blockchain development and maintenance projects, a bottom up approach that ensures the community's priorities are funded.
There's plenty of growth for all, but Cardano's carefully mapped-out strategic plan suggests being the crypto world's tortoise to everyone else's hare still has merit and holds significant future value.
A long-term view
Cardano's roadmap and the use of peer review may slow down development to a certain extent. And that might weigh on Cardano's price and market position from time to time. But in the long-term, steady, well-constructed blockchains are likely to take the lead in this competitive field. That means Cardano's strategy today is exactly right -- and efforts now could pay off in a big way.
