Last month, Cardano’s cryptocurrency ADA climbed 25% on the news that its Alonzo upgrade will bring programmability to the blockchain. Cardano surpassed Binance Coin and Tether to position itself as the world’s third-largest cryptocurrency, eclipsed only by Bitcoin and Ether.
In the weeks leading up to the upgrade, the asset had hit numerous all-time highs. It is common practice for investors to flock to a particular investment in anticipation of such big news in hopes that they will sell the asset at a higher price later.
According to the executive director of CEX.IO, Konstantin Anissimov, the investors “were hyped on the optimism that a supposedly superior blockchain infrastructure with the possibility to support the next generation of smart contracts is on the horizon.”
Reportedly, ADA’s all-time high remains the $3.09 it hit on the 2nd of September. But, despite the hype, ADA continues to trade at $2.56 today. Last week’s crypto crash sent the coin downward 16%, but ADA has risen over 2,555% YTD.
The Future of Cardano
Essentially, what the Alonzo upgrade will do for Cardano is give it the ability to support smart contracts on the blockchain. These can be used for decentralized finance (DeFi), non-fungible tokens (NFTs), and other types of decentralized applications (Dapps). In other words, Cardano is slowly gaining a larger presence in the world of decentralized finance and becoming a direct competitor of Ethereum. The Alonzo upgrade is part of the Goguen era, which along with the Byron, Shelley, Basho, and Voltaire eras, form Cardano’s roadmap.
With pockets that are $400 billion deep, the Ethereum market is the largest smart contract platform in terms of valuation. Reportedly, although Ethereum has held this position for years, many other blockchains have tried to challenge it, including Solana (SOL), Terra (LUNA), and Polkadot (DOT). So far, none have been successful.
Nonetheless, Ethereum has gained a negative reputation for charging high fees but offering a slow and unstable network. The blockchain is very popular because it has a very easy interface that allows quick launches. However, developers are getting tired of the blockchain not being able to meet the high demand. They are tolerating these conditions for the time being but will most likely move to more efficient blockchains eventually. And Cardano may very well be one of them.
The Rollout of the Alonzo Upgrade
The rollout of the hard fork upgrade took place yesterday, Sunday 12th.
In their blog, the Input Output team, which developed the Cardano blockchain, said, “The Alonzo upgrade (named after the pioneering American mathematician Alonzo Church), will build on this success. Deployed using the same HFC technology used in previous upgrades, this will mark the beginning of a fresh period of rapid growth. By allowing Plutus scripts to be written and executed on-chain, we’ll have the backbone for a new decentralized application platform, enabling numerous DApp and decentralized finance (DeFi) use cases – from simple swap type apps to decentralized exchanges (DEXs), and more complex computational programs such as Oracles and crypto-backed algorithmic stablecoins.”
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