The date for the start of smart contracts on the Cardano blockchain is quickly approaching and will be here before we know it. Yes, September 12, 2021 is less than a month away! Simply put, this protocol change will be absolutely TRANSFORMATIVE for Cardano. The utility of the Ada token is about to see a massive upgrade that will surely draw significant attention to Cardano as a serious competitor to Ethereum, the second largest (by marketshare) cryptocurrency in the world. Ethereum already has smart contract capability, but has not yet transitioned to a Proof-of-Stake (PoS) consensus architecture. Cardano, on the other hand, is already a fully decentralized PoS blockchain, and will soon have smart contract capabilities. Not only is Cardano’s smart contract language, Plutus, simpler to use than Ethereum’s Solidity, but Cardano will also launch a capability to convert ERC-20 tokens (Ethereum’s token standard for smart contracts) to run smart contracts on the Cardano blockchain! This is an absolutely exciting period if you are a holder of Ada or planning to launch a decentralized application (DApp) on Cardano.
Let’s take a moment just to remember how far Cardano has come since about a year ago. At the end of July 2020 we had the Byron to Shelley upgrade that launched staking on Cardano. Then a few months later, we had the Allegra upgrade which introduced token-locking for on-chain voting. Next came the Mary upgrade that added support for User-created fungible and non-fungible tokens (NFTs) that would run natively on Cardano. All of these upgrades have been highly successful and we’ve already seen a number of NFTs being created and sold on Cardano. The next step, Alonzo, will be at least as big for Cardano as all of the last three upgrades combined. Let’s take a closer look at Alonzo….
So, what exactly will the addition of smart contracts do for Cardano? Well, to quote a blog entry from Input-Output Global’s Olga Hryniuk:
Smart contracts can be used to settle complex deals, hold funds in escrow, and secure movement of funds under predefined conditions. Cardano will allow DApps to interact with the ledger to record their activities and execute smart contracts. These digital agreements express the story of a transaction, specify where funds should go, and under what conditions they will be sent, executing a deal only when all the conditions are met. Alonzo will lay the foundation for Cardano to support such applications.
To put it simply, smart contracts are pieces of code that run on Cardano and execute transactions of Ada and other User-created native tokens based on the verification of a set of pre-defined conditions. This capability is fundamental to automating the exchange of goods and services using the cryptocurrencies of the Cardano blockchain. At the present time, one must write and manually submit transactions using command-line tools. With Alonzo, the foundation will be laid for letting Plutus code submit transactions automatically when Users trigger the right conditions, such as placing an online order through a graphical interface. Transactions on Cardano will become simple enough for nearly anyone to initiate one as long as they hold Ada or other native tokens. This will allow enterprising Users to create an essentially limitless set of applications to run on Cardano. Rather than Users simply purchasing, holding, or trading assets on Cardano for either US currency or other cryptocurrencies, the Ada and other native tokens will be useful for the purchase and exchange of nearly any good or service that can currently be exchanged using fiat currencies. Not only will this be possible, but DApps will power new capabilities that are only enabled through blockchain technology. Smart contracts will not only revolutionize what Cardano can be used for, but will also lay the foundation for the dream that many builders of these protocols have envisioned: that cryptocurrencies will revolutionize world economics.
Here at Arcadia, we share this vision and hope for a better life for all powered through the freedoms and opportunities cryptocurrencies can bring to people around the world. We have been participating through the running of our stakepools, TESLA and ADAMS, since before the launch of the incentivized testnet in 2019. As we mentioned in a recent tweet, we have upgraded all of our resources and software to be compliant with the requirements for the Alonzo Hard Fork Event on September 12. We want to thank all of our stakers for their continued support, and we want you to know that we are fully ready and excited for the next protocol upgrade of Cardano. If you have any friends or relatives looking to stake their Ada, please be sure to refer them to us and to stake using your favorite Cardano wallet.
