What the Current State of Cardano Means for Its Smart Contract Future

Now that Cardano (CCC:ADA-USD) has fallen to levels approaching $1, headlines will question how much further it can sink. Others will call this a buy-the-dip opportunity and insist that ADA can’t fall lower. 

The Cardano logo and description on a smartphone.
Source: Grey82 / Shutterstock.com

I’m not particularly interested in those prognostications. While I do think ADA will rise, I’d rather focus on understanding where it’s at now and what that means for the future.

Here’s what you should know about Cardano moving forward.

Cardano and the Alonzo Upgrade

It’s important to understand that Cardano only recently entered its era of smart contract functionality. That milestone occurred on Sept. 12 during the Alonzo upgrade, which brought smart contracts live on the network.

If you were to simply attach prices to event dates, you might believe that Cardano’s smart contract functionality has ushered in some sort of sustained decline. After all, prices have dropped from the $2.50 mark when that functionality was added to around $1 currently.

That’s not the truth, however — it’s merely a coincidence. More importantly, smart contracts will allow many new things to happen for ADA. Cardano broadly says as much under the umbrella of the Goguen Era within its roadmap. 

So What?

So, why should we care? The answer to that lies in our technical aptitude as it relates to Cardano. I’m going to assume that, like me, you lack the requisite skill to create smart contracts on the Cardano network. 

If that’s false, great. But the point is that most people lack that particular skill set. What that means is that the ability to create smart contracts on the network is still limited to experts with deep knowledge. 

Smart contract creation within the Cardano network only just opened to those people. But one of the overarching goals of this name is to make its smart contract programmability much more accessible. 

Plutus and Marlowe

Cardano sits at an interesting juncture in terms of its overall development. Sure, smart contract functionality now exists, but that is hardly Cardano’s end goal. 

Smart contracts need to be accessible to the layman so that decentralized applications (dapps) can be built out. Cardano knows this. The sooner it breaks down the high barriers to entry related to programming smart contracts, the quicker it develops. 

And that’s where Plutus and Marlowe come in. What are they? Well, Plutus is a purpose-built programming language which is based on the Haskell programming language. If my understanding is correct, that’s where the majority of smart contract and dapp development is currently occurring within Cardano. 

That would be development done by developers. In other words, not that which is accessible to a wider audience.

Enter Marlowe. In response to Plutus, Marlowe is a language designed for the modeling of smart contracts based on financial instruments on the blockchain. Per the website:

Marlowe interacts with real-world data and enables the expression of smart contacts. It is aimed at fixed-duration financial products, such as hedging, fixed-term deposits, credit swaps, and crowdfunding.”

That’s the end game for the Goguen era — to “allow users from technical and non-technical backgrounds to create and execute functional smart contracts on the Cardano network.”

What to Do with ADA

This is why I’d say the fact ADA currently trades near $1 is relatively unimportant. Yes, if you’re treating ADA as a trader does, it matters. But the longer arc of the narrative is that Cardano is opening avenues of development that didn’t previously exist. It’s getting tantalizingly close to enterprise applications. That will change it forever — and for the better. 

Smart contracts are integral to the entire blockchain argument. Dapps built on the blockchain are what’s important. Cardano is taking its time, getting it right and moving in that direction.

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.

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