Peer-to-Peer blockchain developer Input Output HK continues to leap forward in developing Cardano (CCC:ADA-USD) and is approaching the Alonzo hard fork. What does this mean for potential investors and what might it do to the price of that blockchain’s native token, ADA?
That’s what I’ll try to answer in this article and more. But before that, you likely want a straight forward opinion of whether I believe it makes sense to invest in ADA at this point.
My answer is “yes”, I do. I’ve been a fan of Cardano since I first began researching it early this year.
With that aside, let’s take a look at the Alonzo hard fork, and what it means to investors.
Cardano Creator’s Update
ADA prices recently surged after Charles Hoskinson, Cardano’s creator, revealed a definitive date for the Alonzo hard fork. In his Aug. 13 YouTube video, he set the hard fork date as Sept. 12. The price of the token has appreciated 24.5% in the following seven days.
Hoskinson revealed the news in a 25-minute-long update. One thing I am beginning to note about his leadership style is that he comes across as a genuine, hard-working, down-to-earth guy. To some that may seem insignificant, but it’s apparent from comments on the video that his fan base ardently believes in both Hoskinson and the project.
So, what is the significance of this news? Put simply, the Alonzo hard fork will allow users to run smart contracts on Cardano. The iterative process to bring smart contracts to Cardano recently hit multiple milestones.
Alonzo Purple Joins ADA Rainbow
The naming conventions associated with blockchain projects can become confusing for laymen like myself.
Cardano has undergone a series of upward iterations, with a color naming convention, as it approaches smart contract functionality. The predecessors to Alonzo Purple included Alonzo White and Alonzo Blue.
Alonzo Blue was a smaller test of smart contracts on the Cardano network, which was limited to 50 users. It was crucial to the project as the first testnet to incorporate smart contract features within the blockchain. It was followed by Alonzo White, which expanded those smart contract features to a larger pool of 500 network users.
With the advent of the Alonzo Purple testnet phase, Cardano has expanded its smart contracts trial. It is expected that the number of network users is to be greatly expanded. According to Coingape.com the precise user limit has not been announced yet, but should be greater than the 500 in Alonzo White.
That logically indicates that the network has been successful in scaling up those smart contract features from Alonzo Blue to White, and now into Alonzo Purple.
So, if Alonzo Purple goes according to plan, Cardano’s smart contract functionality will soon be sorted. That’s the point of Alonzo Purple, to work out issues which may crop up between now and the Alonzo hard fork.
Once the Alonzo hard fork occurs, and Cardano achieves smart contract functionality, it will be a new game. Cardano will then be on par with the likes of Solana (CCC:SOL-USD) and Ethereum (CCC:ETH-USD).
Smart contracts execute instructions outlined in contracts upon a series of conditions being met. This execution occurs automatically, thus the term ‘smart’. The important thing to note here is that smart contract functionality will allow Cardano network users to automatically perform functions without an intermediary.
Once that functionality is there Cardano users can automatically exchange information, assets, and capital subject to conditions, not people. That’s a leap forward for Cardano. And many developers are busy building much more robust use cases as well. Only time will tell what types of utility smart contract functionality will bring to Cardano.
But the news is causing lots of excitement, that much is sure. There’s a reason that so many cryptocurrency advocates are so high on Cardano. This news should send prices higher, and the future continues to look better and better for ADA prices.
On the date of publication, Alex Sirois 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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.