Cryptocurrency Platform Cardano & Ada Coin

Disclosure: I own Ada. This is a condensed summary of what convinced me to start buying cryptocurrency, specifically Ada. I’m happy to share what I learned, but this is not investment advice. I don’t know you. I don’t know your situation. Cryptocurrencies are a speculative investment, and you could lose all your money. If that’s not something you can live with, then do something relatively safe, like invest in an index fund, a certificate of deposit at a major bank or U.S. Treasuries. Also, if you are making investment choices based solely on the suggestions of some random blog on WordPress, written by The Deity knows who, without engaging your own mind and taking responsibility for your own choices, then you deserve to lose all your money. Caveat emptor!

Cardano is an open source crypto platform that runs a decentralized public blockchain for the implementation of smart contracts. The native cryptocurrency, or coin, of Cardano is Ada. There are 45 billion Ada coins, something like 32 billion are in circulation at the moment. It is currently capable of 1,000 transactions per second, and with a future upgrade, it will be capable of millions, on the level of global payment systems like Visa. As a point of comparison, Ethereum and Bitcoin are both less than 20 transactions per second. It is also able to complete these transactions at a fraction of the cost of Ethereum and Bitcoin. But, the killer app for the Cardano platform is the Plutus integrated development environment (IDE) for smart contracts, which allows for programmers to write and “run end-to-end tests on their program without leaving the integrated development environment or deploying their [Haskell] code.”

All of these features will be available as of August 2021. Right now, the Plutus IDE is being tested for the August 2021 deployment. Once the new upgrades launch in August, there will also be a staking system that will allow holders of Ada coins to stake their coin in a pool that verifies the distributed ledger – a function that earns returns, a bit like interest or dividends. Cardano also has the capability of hosting other coins or minting new ones.

Right before Cardano launches, Ethereum will launch Eth2, which will move Ethereum to a proof of stake model like Cardano’s and introduce many of the same features. However, it won’t have is the integrated development environment Plutus. Ethereum also uses Solidity and Vyper programming languages to program their smart contracts. The criticism section from the Solidity Wikipedia page basically says that Solidity is a hot mess.

Compare Solidity to Cardona’s Haskell language, which is an industrial strength language used in cryptography algorithms, semiconducter design, and was used to formally verify an OS microkernel. As a functional language, it doesn’t have side effects. It has type-safe operators and type inference. Basically, it is powerful and has many features designed to cut down on bugs in the code.

Of course, Haskell has drawbacks. It’s hard to learn, and the universe of people that can code in it is relatively small to other programming languages. Depending on your use case, there are other problems as well. But, every choice implies trade-offs, and Haskell is a good language for the implementation of smart contracts.

If you wanted to implement smart contracts into your business workflows. The more money, the higher the stakes, the more likely you’ll be to want to make sure you are not going to have problems later. You’re going to choose the best option available, Cardano.

Ethereum will have more name recognition, as the second highest capitalized cryptocurrency. It’s smart programs will be easier to implement, and they’ll, more often than not, be good enough for a given purpose, probably one that isn’t mission critical.

The good news is that these two systems, and others that come down the pike like PolkaDot, will likely all work together and have different niches. To illustrate, Occum.fi announced a liquidity bridge between Ethereum and Cardano, designed to encourage fund transfer between the two systems, which suggests there could be a symbiotic relationship between them in the future?

Anyway, I think this is going to change the world. These are the two choices in smart contracts, at the moment. And, one has clear advantages.

The current price of Ada on Sunday night, April 11, 2021 was $1.28. You can buy Ada coin through Coinbase.com and most other cryptocurrency exchanges.

This is the video that sold me on Cardano, Plutus and Ada.

For a slightly longer discussion, see this recent Reddit thread.