Why I bet on Cardano

As far as cryptocurrency and blockchain is concerned, in 2016 I was an observer on the sidelines: all I did was read some articles from time to time. Two of my friends were already quite involved in bitcoin and blockchain technology, and once in a while I would listen to them banter on about where and how blockchain technology should advance. This changed in the beginning of 2017 when Bitcoin started its meteoric ascent. This made blockchains extremely interesting as it seemed like a very lucrative investment opportunity. I went ahead and bought some Bitcoin (BTC) on Coinbase which was a breeze. Coinbase also had Ethereum (ETH) and Litecoin (LTC) listed and they were so much cheaper than BTC, so I bought some ETH and LTC as well. Soon after, ETH started its ascent, and every day that I looked at the chart the more it climbed. My cryptocurrency portfolio was on fire.

Now that I was invested, the next logical step was to see what else was out there that I could invest in. This meant that I had to do more research to figure out what I should invest in next. The more I read, the more I got sucked into this world of cryptocurrencies and blockchain. I was mesmerized by what the future could hold. I was slowly realizing that it wasn’t just a lucrative investment but it was an investment in my future. I now had a new plan which didn’t involve lucrative investments, don’t get me wrong I still do want to get rich and reap the benefits of investing in something in its early stages, but now I wanted the underlying blockchain technology to be more successful.

I felt in many ways I was late to the game when it came to BTC and ETH and both of them had serious scaling issues and a few other things I didn’t like. My reading and research over the course of a few months helped me realize that there were a lot of interesting, promising technologies and projects out there that were trying to address these challenges. The one that interested me the most was Cardano (ADA). Cardano is the first blockchain project to take a peer reviewed, scientific approach to its development process. They found some of the the most qualified people and asked them to look at the project and the logic behind the technology. Do their best to poke holes and ask questions and if all questions are satisfied, the protocol moves forward. This process wasn’t something new and had to be invented, it was just something which has always worked for projects and now it was being employed within the blockchain space.

I am an engineer and worked in the field of bio-medical research for quite a few years before I switched to be an analyst, so the whole process of peer-reviews and data to back it up is extremely important to me and something that intrigued me right away about Cardano. Being a nerd at heart also pulled me towards a ticker like ADA, the first female computer programmer, so I decided to dig deeper and do my own research as to whether I should invest in Cardano and, at the time, I put together this pros and cons list:

PROS

1. Fully open source
2. Code is written from scratch in Haskell Programming Language1. It is a very easy language to learn for someone who hasn’t programmed before.
3. Haskell can easily address and implement zk-SNARKS, which are imperative to solve for privacy within the blockchain.
   • zk-SNARKS or zero knowledge proofs means that between two parties of a transaction, each party is able to verify to the other that they have a specific set of information, without revealing what that information is. Haskell makes implementing this very easy and seamless.
4. At least 30 developers on their team
   • Large dedicated team involved in improving the technology, comprised of engineers, researchers and professors.
5. Cardano uses a new Proof of Stake mechanism (Proof of Stake is a mechanism by which a new block is created by a slot leader who is randomly chosen) called Ouroboros, which has proven to be a highly secure if not the most secure mechanism so far.
6. Their own wallet called Daedalus, which will support staking. Is is also a multi-currency wallet which supports interoperability between crypto and fiat.
   Cardano is designed so that transactions and data are on two separate layers (Cardano Settlement Layer and Cardano Control Layer)
7. The CSL behaves as the open ledger and if the first layer of the platform.
   • The CCL is the second layer which contains the information of why a transaction occurs.
   • The separation of the Settlement Layer and the Control Layer, is what will allow the implementation of changes in the consensus algorithm avoiding damaging and community splitting changes like that between Ethereum and Ethereum Classic.
8. Supports decentralized applications, dapps, to be built on its blockchain.
9. The Cardano team is developing its own language called Plutus in order to make it easier to create smart contracts.
10. Cardano will also support side chains which will use proof of proofs. The side chains will allow funds to move between the two layers of CCL and CSL, or with other blockchains which can support this protocol.

CONS

1. The claims made by the Cardano platform and the team have still not been proven, they are still in development.
2. The development process is very slow due to the peer review process. Even though the peer review process is important and amazing, the finished product takes much longer to get to the market. Especially in today’s world where the crypto space is in continuous fast paced evolution. There is always the fear that Cardano will get behind.
3. Long and ambitious roadmap, due to the prolonged time it takes for implementation. The roadmap includes several enhancements to the blockchain which is staggered over several years. The Shelley update will take place over the entirety of 2018 followed by two more major updates scheduled in 2019 and 2020.
4. IOHK (Input Output Hong Kong) is supposed to design, develop and maintain Cardano only till 2020, however no plans have been laid out as to what happens to the platform thereafter.

After reviewing all these facts, I decided to go and buy some ADA from Bittrex, and then move it to my desktop wallet (Daedalus). When I first bought Cardano it made up about 5% of my portfolio, but over the last year I have increased my stake in Cardano and now it is about 25% of my portfolio. I have several other stakes in other cryptocurrencies, but the lion’s share of my investment is in Cardano. I truly believe in what they are trying to solve and know they will be successful.

Currently, I am eagerly awaiting the launch of Ouroboros, so I can firsthand experience staking from within the Daedalus wallet as well as the launch of Traxia and sp8de later this year. Traxia has become the first Dapp to launch on Cardano and is trying to create a decentralized global trade finance system where invoices are converted into smart contracts and traded as short-term assets. Sellers and buyers will continue to receive and pay in fiat currency, not cryptocurrency, so it’s easily adoptable by everyone. The only blockchain-related feature is to simply input a private key to confirm the invoice is correct and will be paid. Sp8de is a protocol for decentralized blockchain based platform with multiple features that are essential for the growing blockchain gambling industry and whose solid implementation is lacking in any of the currently existing projects in this space. These projects will help bolster Cardano’s position amongst the top 10 cryptos by marketcap.

Cardano as a project is quite ambitious and wants to solve for many issues currently in the cryptocurrency world, I love how Cardano stresses code scrutiny and peer-reviews. In the world of cryptocurrency there are a lot of extremely good if not great projects, however a lot of these projects have terrible teams behind them. Cardano on the other hand has a great team behind it and already has a working product in the form of its Daedalus wallet. A lot of projects end once their mainnet is launched, this is not the case with Cardano and many more changes have already been scheduled as part of their roadmap running into 2020. Their development cycle might be slower than others, but I truly believe in “Good things come to those who wait.”