Disrupting financial structures for social good: Cardano

Some developing nations lack the financial structures developed nations seek to disrupt. However, for Cardano, this disruptive force could enable developing nations to leapfrog past present structural obstacles.

 

Key Takeaways:

  • Cardano hopes to solve scalability, interoperability, and sustainability roadblocks seen in current 2nd generation blockchains like Ethereum.

  • ADA is Cardano’s crypto currency currently in fourth place by market cap.

  • IOHK develops the tech, the Cardano Foundation promotes Cardano and Emurgo drives its commercial adoption.

  • IOHK uses functional programming languages like Haskell and prioritizes high stake software testing making Cardano one of a kind blockchain.

  • Cardano expects to be 50-100 times more decentralized than other large blockchain networks, a major value add for users.

  • Reasons for ADA price surge: African contract on the way, impending decentralization, smart contracts and Goguen era.

 

_____________

2017: the Boston-based sneaker brand New Balance sues a Chinese entity called New Boom for copyright violations. Chinese courts recognize the mistake and award the American company $1.5 billion in settlement, a costly mistake.

2019: New Balance decides to use the Cardano blockchain to authenticate its premium sneakers thus putting a permanent and immutable stamp on each unit. With Cardano’s distributed ledger, purchasers can verify sneaker authenticity. Is this equivalent to a $1.5 billion value add?

_____________

2021: Why has ADA’s price been surging?

This year is the year of many great developments for Cardano and several reasons back ADA’s price surge beyond the general crypto FOMO. Cardano is upgrading from Shelley to Goguen, thus enabling true competition against Ethereum’s DeFi space. With Goguen, new opportunities for the community and businesses will take shape in the form of smart contracts. Soon, users will be able to distribute their own tokens on the Cardano blockchain, the only blockchain enabling natively originated tokens. IOHK will be granting the community full control over block production in late March which means the promise of a truly decentralized system will be fulfilled, something ramping up excitement further up. ADA is gaining traction in Africa with the director of African Operations John O’Connor saying a large contract is in its final stages. If successful, Cardano could see 100 million new users on the platform.

 

A high stakes approach to building protocols…

Cardano is a third generation blockchain. It is a project whose goal is to solve current blockchain strategic roadblocks in scalability, interoperability, and sustainability. The project is a proof of stake blockchain network being built into a decentralized platform. Proof of stake relates to the token ADA being used to verify transactions occurring on the platform. ADA ranks Cardano in fifth poll by market cap according to Coinbase (on Feb 17), but has floated upwards to fourth poll for many weeks prior. The currency is hosted on more than 30 exchanges as of this day.



At the heart of the project is the Ouroboros protocol. IOHK (Input Output Hong Kong) develops this technology, the Cardano Foundation promotes Cardano and Emurgo drives its commercial adoption. The end goal for this platform is for it to become community-owned by its stake holders, namely those who own ADA. The project is structured in five stages, seen in detail below.

 

Cardano is unique in its method because it tests its software like engineers test high-stake rocket launch missions. They see their software failing equal to the death of an astronaut. The main downside to this hyper secure developmental method is that building dApps takes a lot more time than other platforms like Polkadot, or Ethereum. Their method entails going through academic research and presenting at rigorous competitive top-tier scientific conferences. This means that unlike other Blockchains, Cardano promises standards of excellence in its protocols. IOHK also uses functional programming languages, like Haskell because such languages are less prone to ambiguity, human error and they are easier to test and prove mathematically.

Stages of production…

The Byron era represents the foundation for the rest of the vision namely, a general protocol network that is mathematically secured and tested. The Shelley era is the next big step in fully decentralizing the network and offering more power to users. As more dApps become controlled by stakeholders, Shelley will present delegation and incentive schemes in the form of a reward system to drive more community-based decision making. By the end of this era, Cardano expects to be 50-100 times more decentralized than other large blockchain networks. Its reward system will enable more pools of users and better protection against malicious intents to destroy the platform.

 

The third phase, the Goguen era, will enable smart contracts that help build dApps. This stage is in progress and will allow people from all backgrounds (from no coding experience to top engineers) to setup smart contracts like financial smart contracts via Marlowe. The fourth era, called Basho, will introduce ‘’side chains’’, which are chains that enable work from other blockchains to figure on the Cardano platform, or trade one crypto currency for another. This will permit further scaling of the blockchain network, one of the key issues of current second generation blockchains. The last stage, Voltaire, will allow more stakeholder governance and funding capabilities: Voltaire will add a treasury system whereby a fraction of the transaction fees will be pooled to always provide funds for development activities on the platform.

 

Disruption benefiting developing nations…

Cardano’s vision is one of complete decentralization, meaning that no third-party intermediaries are needed for peer-to-peer transactions. With this comes the potential to transform lives in countries scarce of social and banking institutions. Through a pure DeFi system, wars, hyperinflation, theft, and natural disasters would no longer put financial assets, school diplomas, birth certificates, IDs etc. at risk. Important documents would be immortalized, assets would be secured, and transactions made cheaper.

 

What well established economies tend to forget is that whatever financial landscape we seek to disrupt is in high demand in some developing countries. 1.7 billion people on earth still do not have access to regular banking institutions, or do not trust their banks to securely hold their assets. Imagine the stress of hiding money under your mattress, and an earthquake or fire tears down the building. Lack of access also welcomes black market forms of lending like unregulated lending with high interest rates potentially impoverishing some even further. When cashflows are interrupted, or inexistent, or tampered with, starting businesses, and taking risks takes on a whole other meaning.

 

Enter Cardano. With its goal to store and process data on-chain through smart contracts a whole world of interconnected social and financial services could be built on chain in such nations. Forget paper-based services. By virtue of Cardano’s decentralized nature participants from anywhere could be empowered by the latest decentralized apps and smart contracts. Imagine a world made more equal because of a technology that truly puts communities before self-interest? Governments could also launch their own fiat backed or commodity backed crypto currencies on the Cardano platform thus presenting countrymen with a new form of sovereignty.

Related articles

Cloud Cloudflare landscape cyber

Cloudflare – the Network-as-a-Service Company

watch, luxury, jaeger le coultre hodinkee

Watch website Hodinkee raises $40 million in series B funding

mobile wallets

Why mobile wallets disrupt transactions

Web3: towards data democracy? pt.1

bg_nwsletter