Cardano (ADA -0.69%) has consistently ranked as one of the Top 10 cryptocurrencies by market capitalization, yet it has rarely been sexy or splashy. Some have even called it “really boring.” Even during the peak of the crypto craze, Cardano reached a high of just over $3. Time after time, it seems like Cardano has been late to the party whenever a rival blockchain such as Ethereum (CRYPTO: ETH) has introduced a new innovation.
But Cardano could finally be on the cusp of delivering on its early promise and rewarding investors who take a long-term view. The big catalyst could be a tech upgrade (known as Hydra) coming in 3Q 2022 that will make the Cardano blockchain faster, more interoperable and more secure. This upgrade will also open up more opportunities for developers to build on top of the Cardano blockchain with new decentralized applications known as dApps.
What the new upgrade means for Cardano
Cardano refers to the Hydra update as a “layer 2 scalability solution,” and what that means in layperson’s terms is that Cardano will be able to add more users, more developers and more applications in the future without any loss of speed or performance. As Cardano founder Charles Hoskinson — who also helped co-found Ethereum — has pointed out, the new update is all about scalability and improving performance for the more than 3 million unique wallets holding ADA. If everything goes according to plan, says Hoskinson, Cardano will theoretically be able to process more than 1 million transactions per second. By way of comparison, the fastest blockchain today – Solana (CRYPTO: SOL) – can handle about 65,000 to 70,000 transactions per second.
This increased capacity could open a world of new possibilities for Cardano. For example, while blockchains such as Ethereum and Solana get all the attention when it comes to non-fungible tokens (NFTs), Cardano now seems to be making a strong play to get in on more of the action. According to Hoskinson, NFTs now account for approximately 40% of all new activity happening on the Cardano blockchain. The latest high-profile launch is a new, much-anticipated NFT collection from comedian and actor Martin Lawrence.
Slow and steady wins the race
To be sure, Cardano has absorbed its share of criticism for a pace of development that has seemed too slow for some in the tech space who prefer to break things first, ask questions later. In part, this is due to the way that Cardano makes updates to its blockchain. At the heart of the Cardano approach is an evidence-based software development process that is similar to an academic, peer-reviewed process. In fact, Cardano prides itself on having the first blockchain protocol based on peer-reviewed research. This approach makes the development process slower, but also ensures that new software upgrades actually work as planned.
In the end, slow and steady might win the race. While Cardano has seemingly lagged behind in some developments, it seems to be building momentum now. For example, Cardano adopted smart contract functionality last September as part of its Alonzo upgrade.
Staying level-headed and grounded at a time when others are not
Cardano’s Charles Hoskinson has seen it all, having been through a handful of bear markets in the crypto space over the past decade. “Bear markets are actually quite comfortable,” he recently said in an interview, because they let you focus on getting the fundamentals right and building for the future.
Those are comforting words to hear in a market downturn. Once its new tech upgrade is complete, Cardano might just end up being one of the safest cryptos to hold in a bear market.