Cardano smart contracts were released on September 12, 2021. The smart contracts on the Cardano blockchain are already live. Here is a bit about Cardano and smart contracts and why it all matters.
Cardano is an open-source smart contract platform developed by Charles Hoskinson in 2015. He is also one of the co-founders of Ethereum. Unlike Bitcoin which has a Proof-of-Work consensus, Cardano relies on a Proof-of-Stake consensus mechanism.
The bitcoin blockchain is created as a peer-to-peer digital currency. The Bitcoin blockchain only contains the bitcoin transactions. However, the Cardano blockchain has a functional environment, which can be used to develop decentralized applications(dapps). Cardano also supports the creation of cryptocurrency tokens. Users can develop their own tokens on the Cardano blockchain. Smart contracts make all the above possible.
A smart contract is a code or program which represents an agreement. When the agreement terms are met, smart contracts execute automatically. Ethereum is the first smart contract platform. Ethereum blockchain faces scalability issues due to network congestion and high transaction fees.
Cardano aims to solve the scalability bottleneck for high transaction throughput by implementing data compression techniques and side chain functionality called Hydra. Cardano's multi-layered protocol enables settlement on one layer and smart contract capability on another which ultimately makes Cardano more secure and scalable.
Why Does Cardano Smart Contracts Matter?
Cardano smart contracts were launched on September 12, 2021, on the completion of the Alonzo hard fork. After almost four years of launching the network, smart contracts were finally launched on Cardano.
Due to the launch of smart contracts on Cardano, developers are now able to develop decentralized applications on Cardano. There are 2000 smart contracts already deployed on Cardano which include Defi protocols, NFT marketplaces, and Decentralized exchanges. As adoption for these dapps increases, the utility of the Cardano blockchain increases.
ADA is the native currency of Cardano. ADA is used to pay transaction fees and smart contract fees on Cardano. ADA can be staked on the platform and will be used to validate blocks which in turn earn rewards for the stakers.
As of September 2022, the market price of ADA token is $0.462 with a market capitalization of $15.6 billion. Ethereum has transitioned to a Proof-of-Stake blockchain and has a market cap of $172 billion. Cardano is better, faster, and cheaper than Ethereum. Cardano blockchain has a great potential to become the best blockchain out there and we have not even started.
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