If you are new in the crypto world, you might be more aware of Bitcoin and Ethereum than you are of Cardano. However, analysts and experts describe Cardano to have great potential as its native token ADA recently became the third-largest cryptocurrency in the world with a market cap estimated to be around $80 billion.
Cardano was invented in 2015 but it has been on an upward trend for a few months with prices doubling from $1.2 in July to $2.4 at the time of writing this. According to experts, Cardano’s price may even reach $8 in the coming months.
And now, it looks like Cardano’s dream run will continue to hold, given that it is on the anvil of a major upgrade in the form of ‘Alonzo hard fork‘.
So, what does the software upgrade offer? We’re here to tell you all about it. Keep reading to find out.
Table of Contents
What is the Alonzo Hard fork?
Cardano’s Alonzo update brings the network much closer to its full capabilities.
The Alonzo hard fork is a major upgrade on the Cardano network that sees the much-anticipated implementation of smart contract functionality. Smart contracts are pieces of computer code that automatically execute when certain predefined conditions are met.
The official website of Cardano says, “With the integration of smart contracts, the Goguen era represents a big step forward in capability for the Cardano network.”
After the Alonzo update, anyone will be able to create and deploy their own smart contracts on the Cardano blockchain, paving the way for native decentralized applications.
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The system update, which rolled out on September 12, signifies the end of the Shelley era of Cardano and the beginning of the Goguen phase. Although there is no set date for the end of the Alonzo hard fork, developers all across the network have been working hard on testnets and have stuck to a defined road map with specific milestones in the form of “eras.”
Recommend Read: What is a Smart Contract Security Audit?
The Eras of Cardano
Cardano’s development roadmap is categorized into six main stages, or “eras,” each focused on expanding the functionality of the network.
Sets up the foundation code of Cardano. Allows users to exchange the Cardano currency, named after revolutionary programmer Ada Lovelace, and mine ADA with their proof-of-stake consensus algorithm.
Focuses on the decentralization aspect of the network by setting up incentives for users to host their nodes. The main aim of this era is to make sure the nodes, or individual computers, are run by a diverse group of network participants rather than a small, centralized group of users.
Introduces smart contract capabilities to the network allowing developers to create decentralized applications on top of Cardano.
Improves the underlying performance of the Cardano network to be able to process more transactions and scale up. This era also introduces side chains, which is a means of scaling a network using multiple blockchains.
This era adds a voting and treasury system for self-sustaining governance. Users will be able to stake their funds to influence future development on the network.
Cardano has now stepped into its smart contract focussed Goguen era. This era will usher in a bigger technical capability for developers to create DApps that can provide more functionality to the chain, including the implementation of its multi-asset blockchain plan.
Moreover, the Goguen implementation provides wider interoperability with other existing smart contracts, regardless of the difference in coding language used to develop them.
The Stages of Alonzo
The Alonzo hard fork is split into three main color-coded phases.
- Alonzo Blue
- Alonzo White
- Alonzo Purple
There are also two smaller phases post-Alonzo Purple dubbed “Alonzo Red” and “Alonzo Black.” Each phase essentially adds more users to the testnet and identifies bugs that may need to be fixed.
Let’s see what these color-coded phases entail!
- Introduced smart contracts with around 50 technical participants, mostly stake pool operators (SPOs).
- Invalidation errors and other simple fixes were found and tweaked.
- Adds more features and a wider range of participants to Alonzo Blue.
- Hundreds of new users will be run through a sort of “exercise boot camp” that will test the capabilities of the network.
- This experiment is being done by IOG and is expected to last around two to four weeks.
- A fully public testnet and onboard thousands of participants to the network.
- This particular stage is split into two distinct phases, “light purple” and “dark purple.”
- The first will allow for simple smart contracts, while the latter will allow for more complex smart contracts.
Then comes the final Alonzo Red/Alonzo Black color phases, which are reserved for final bug fixes/cleanup to prepare for the final release of the hard fork. Any future tweaks to the hard fork will be very difficult to make past this point, and so these two phases must be looked at very carefully.
Moving on to the next new thing!
What is the Plutus Platform?
Cardano’s Alonzo hard fork will bring its smart contract capability Plutus to the network and provides the foundation for more decentralized applications to be built on the platform.
The Plutus Platform is the smart contract platform for Cardano. Plutus contracts consist of parts that run on the blockchain (on-chain code) and parts that run on a user’s machine (off-chain or client code).
Plutus draws from modern language research to provide a safe, full-stack programming environment based on Haskell, the leading functional programming language. Both the on-chain and off-chain code is written in Haskell, and Plutus smart contracts are Haskell programs. Off-chain code is compiled by GHC, the Haskell compiler, and on-chain code is compiled by the Plutus compiler.
Hoskinson, who’s now the CEO of IOG, explained Haskell was chosen because it is a high-assurance code i.e., it is capable of providing a higher degree of certainty the code works as intended.
Insights on ADA post-Alonzo
The price of Cardano’s ADA token shot up following the hard fork of the blockchain platform’s testnet on Wednesday.
ADA hit $3.09 on Wednesday morning — up about 4% on the last day and 124% from 30 days ago. The coin is the third-largest cryptocurrency by market capitalization at about $94 billion, behind only bitcoin and Ether, and ahead of Binance Coin.
Cardano saw inflows of $10.1 million last week, according to a CoinShares report. It was the largest total on record for Cardano, bringing its market share to 0.15%.
The Road Ahead
This upgrade pitches Cardano against the Ethereum blockchain, which is considered to be its biggest competitor. With easier smart contract production and more development on Cardano, one can imagine the potential projects to be built.
Projects that demand faster transaction speeds will benefit greatly from the low transaction costs on Cardano. The emergence of easier dapp building will bring with it more projects. Already, more than 65 projects are pledged to be released alongside Alonzo, including Synthesis, Miniswap, Stasis, and CardWallet.
The future for Cardano looks promising and could definitely shake things up in the blockchain community. It is a next-generation blockchain and rightfully so, it is also proving to be one!
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