Cardano’s Impressive Utility Is Clouded by Crypto Jargon
InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Alonzo upgrade gave Cardano a competitive edge. But the crypto's mainstream ado...
Cardano (CCC:ADA-USD) officially launched its Alonzo upgrade on Sept. 12 to great fanfare. Unfortunately, more than 2,200 smart contracts that were ready for launch couldn’t do so because they were held in a timelock contract.
As for when those will be released, your guess is as good as mine. In the meantime, the Alonzo hard fork appears to bring Cardano into the mix as a serious contender for executing smart contracts.
Does that make ADA-USD a buy? The tech gives Cardano a competitive boost, but there are other issues at play that impact its long-term prospects.
Cardano Jumps to the Front of the Class
In my last article about the cryptocurrency, I thought it would continue pushing higher unless the Alonzo upgrade is an “abject failure.” While the timelock situation isn’t a good look, the reality is that the upgrade brings “programmability” to the blockchain.
You won’t find a crypto article of mine that doesn’t mention the word “utility” at least once. Without it, a cryptocurrency is worthless.
However, the most important part of its Sept. 12 launch is that IOHK, the people behind Cardano, stuck to the schedule. Five Binaries ran the first smart contract on the network. According to Crowdfund Insider, its founder, Marek Mahut, was pleased with the outcome:
“This is what makes smart contracts so exciting. Safety and scalability are major features for any developer. Cardano’s accounting technology, eUTXO, provides a novel approach, which makes writing secure smart contracts easier. I’m proud to have made the first execution of a smart contract on the Cardano mainnet, and am excited to see how the capabilities unfold as updates continue to roll out.”
Its Founder’s Vision for the Future of Crypto
Cardano founder Charles Hoskinson has stated many times leading up to the Alonzo upgrade that Cardano shouldn’t be the only dominant blockchain. In that regard, he likens it to a wi-fi router.
Hoskinson further explained his vision to MarketInsider:
“Of course we compete under the hood, and businesses, governments and people who care about these things will care about them. But at the end of the day, if it’s going to work for everybody, we have to have that ‘wi-fi moment’ where it’s consumer friendly, and it just works on your phone and you can just set a transaction, you can seamlessly move between things.”
This is why I’m puzzled by IOHK Marketing and Communications Director Tim Harrison’s Sept. 11 blog post about the Alonzo upgrade launch.
Consumer-Friendly Means Speaking Plainly
Anyone reading about blockchain for the first time would most likely run as far away as possible after reading Harrison’s opening sentence.
“Later today, we’ll deploy Plutus smart contract capabilities onto the Cardano mainnet via a hard fork combinator (HFC) protocol upgrade event,” Harrison stated.
I get that Harrison was preaching to the choir and not the general public, but that doesn’t make it any less difficult for the inevitable reader who is new to crypto. The rest of his blog post is equally fraught with complex terms and vocabulary.
His words stand in stark contrast with those of the crypto’s founder. I have no doubt that Cardano zealots will continue to cheer loudly from the rooftops. But the cryptocurrency that provides utility — and is easily understood by the average Joe on the street — has the best chance of global acceptance.
Sure, this was historical in the context of IOHK and its development of Cardano. However, there is a lot of water to pass under the bridge before cryptocurrencies and blockchains are as common as smartphones.
Until that happens, I wish the people on the inside would assume everybody on the outside doesn’t have a clue. This is vital for any crypto or blockchain looking to become a household name.
The Bottom Line on Cardano
I don’t want readers to get the wrong idea. I believe the Alonzo upgrade is a big deal that will ultimately add considerable value to the price of ADA-USD.
That said, when most retail investors can’t tell you how much they pay in fees for the mutual funds and exchange-traded funds (ETFs) they own, I have to question how many regular folks will know the difference between a hard fork and a dinner fork.
If Cardano — and other cryptos and blockchains — want to join the mainstream, they should adopt language that is more friendly to the average consumer. Otherwise, they risk staying in the periphery of financial technology.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
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