It calls this the Goguen era, after the late computer scientist Joseph Goguen. Cardano has divided its efforts into five buckets, each named for prominent intellectuals.
The smart contract platform is called Alonzo. Team leader Tim Harrison said on June 12 Cardano system can now run smart contracts under Alonzo.
A smart contract is a self-executing agreement allowing deals to be made between anonymous parties, without a central authority. Smart contracts are supposed to make such agreements traceable, transparent and irreversible.
Cardano trades at about $1.52, having bounced in the last few weeks between $1.40 and $1.80. That’s a market cap of $48.8 billion, the fifth-leading crypto coin behind Binance.
Make the Blockchain Work
While a lot of speculators buy crypto as an asset with a price, coins are also technology platforms.
Code is definitely the focus of the Hong Kong-based team around Cardano, Input Output Hong Kong (IOHK). Its Foundation, named for the English romantic Lord Byron, began with the currency’s launch in 2017. Byron was the father of Ada Lovelace, said to have been the first computer programmer, and after whom the currency is named.
Decentralization, named for Frankenstein author Mary Shelley, focused on adding nodes to the network. Next will be Basho, named for the Japanese scholar, in which the network will be scaled. Finally, there’s Voltaire, which will add a governance layer and make Cardano self-sustaining.
Goguen is vital to making Cardano a language and software set. The idea behind Goguen is that Cardano can become a trusted, low-cost means of exchanging value.
Betting on Cardano
Cardano’s ADA is sometimes called an “Ethereum (CCC:ETH-USD) killer.” That’s because it combines a version of Ethereum’s own technology with low energy costs, an advantage both have over Bitcoin (CCC:BTC-USD).
Our David Moadel likes the technology-first direction of Cardano, recommending traders “buy every dip.” A correction of 20% from a high should set you to taking small positions, he wrote recently. Those who played Cardano this way have done well. A year ago, ADA was selling for 5.3 cents.
This price action alone has been enough to raise the interest of traders, especially as Bitcoin has rolled over. Our Luke Lango is among those who now prefer Cardano to Bitcoin while Bitcoin is trading sideways. He expects Bitcoin prices to rise sharply once this sideways action ends.
The next step that excites Moadel will be integrating the Cardano network with that of Nervos Network (CCC:CKB-USD). This will enable pure trades between the two crypto-assets, cutting transaction costs and the need for multiple wallets.
The Bottom Line
I don’t care for cryptocurrency, but I like the way the Cardano group is proceeding.
If cryptocurrency is to become more than an asset, it must have technical advantages over using dollars or yuan. Decentralized applications are such an advantage. You can’t write a self-executing contract between anonymous parties with dollars. Governments will take you down if you try.
But if the code for Cardano is bullet-proof, if the foundation is solid, if it’s scaled and self-governing, it becomes interesting as a transaction system. Putting money onto the Internet, and making it a reliable store of value, is a long-term project.
Cardano is going about it the right way. You might call it the computer geek’s cryptocurrency.
On the date of publication, Dana Blankenhorn did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at email@example.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.