Described by Forbes as the cryptocurrency to watch, cardano lifted the roof off expectations when in December 2017, its value appreciated to a $30bn market capitalisation no shorter than four months after launching.
Impressive, even by the extremities of cryptocurrency volatility.
So, what is cardano and – putting to one side the incredible investment returns – why is everyone so interested? The first reason undoubtedly is thanks to a visionary founder.
Charles Hoskinson has risen to the status of legend in the cryptocurrency community, first as the co-founder of bitcoin challenger, ethereum, then moving to create the cardano project in cahoots with the best minds the cryptocurrency community has on offer.
Hoskinson and his team set out with the explicit intention of taking the blockchain technology that underpins cryptocurrency to new heights and, more importantly, streamlining blockchain technology to permit mainstream public adoption.
Cardano not only has Hoskinson at its helm, but faceless retinues of developers around the world working tirelessly under the digital hood to develop the “third generation” (after bitcoin and ethereum) cardano blockchain.
The software development going into cardano is impressive, with developers completing over 6,316 “commits”, the metric used to measure construction efforts taking place in cyberspace, leaving it the second most actively developed cryptocurrency out of the many thousands that make up our cryptographic universe.
Cardano’s success, though, comes down to the value it purports to add, by solving the plethora of issues bitcoin and ethereum’s rise to the forefront of public discourse have wrought.
Bitcoin’s poor scalability, environmentally wasteful “mining” processes, and its lack of interoperability with other digital currencies and existing financial systems have rendered cryptocurrency useless in the eyes of mainstream pundits.
Cardano claims to be near enough, the “everything blockchain”, resolving all the problems cryptocurrency faces under the growing glare of scrutiny that has followed their overnight success.
Most importantly, removing the mining process – or “Proof of Work” as it is known – of dedicating processing power in exchange for bitcoin rewards is swapped by cardano for “Proof of Stake.”
The concept is far too lengthy to explain in this article but allegedly draws to a close one of the most legitimate criticisms of cryptocurrency, which is the use of wasteful,
environmentally-damaging computational energy to fuel bitcoin mining.
There is a catch to all the sublimely convincing marketing put forward by the parent owner of the project: cardano does not have a product.
It has an excellent team and leadership, but as technical analysts have pointed out, the currency resembles little more than a traditional cryptocurrency like litecoin, just with a slightly different mining process.
Hardly transformative or even imaginative from what is supposed to be world-changing tech.
Therein we find the issue underlying not only cardano but cryptocurrency itself. Having universally raised expectations well beyond anything any software team could deliver in a reasonable amount of time, no matter how good their product, the cardano foundation may have set themselves up to disappoint doting fans.
With time, chickens will come home to roost, and if cardano has failed to deliver a viable solution or even an economic use case by then, it may well suffer the same fate as the estimated 95 per cent of cryptocurrency projects with no business proposition or real-world application.
Despite these pitfalls, cardano’s ambition tops all others and remains undoubtedly the best-equipped project to deliver on their promises. We wish them well.