The cryptocurrency space is full of false narratives when it comes to technological progress, missions of projects, adoption, utility, and other things. What is perfectly natural in other industries is wrapped in ideology and nonsensical arguments in the case of blockchain. Let’s think about the illogicalities you may encounter.
TLDR
- One of the most stupid opinions is that everything around blockchain technology is ready and there is no need to improve and innovate.
- We live in dynamic times where the solution that works well today may not be good enough tomorrow.
- Cardano builds slowly but carefully and well on the first try. Thanks to this approach, we have a working Ouroboros Proof-of-Stake (PoS) consensus.
- Cardano is being built as a mission-critical project, just like software for nuclear power plants, aviation, space research, or healthcare.
- The Extended UTxO model is a significant technological innovation. Combined with Plutus scripts, Cardano is becoming a useful technology platform.
- Cardano is a mission-oriented project. The goal is to return sovereignty and freedom to the people, especially to the weakest among us. The mission of Bitcoin is different.
- The different technological characteristics and the different missions of each project make them almost incomparable.
- Let’s not believe the fools who say that there is no point in trying to expand the possibilities of decentralization.
- As projects differ in their missions and technological capabilities, so too will users, who will choose projects based on their needs.
False narratives
In the cryptocurrency space, people are defending projects they have invested in. People hope to improve their financial situation if the project they have invested in wins. Understandably, there are clashes between communities as people have succumbed to the false idea that there must be only one winning blockchain project. Spreading hatred or even lies toward competing projects is a common practice. People are able to associate blockchain technology with a single project and claim that the same technology does not make sense for other projects. One of the most stupid opinions is that everything around blockchain technology is ready and there is no need to improve and innovate.
Often there are arguments that have no real basis. Technological progress is based on scientific research and putting theory into practice. Unsubstantiated opinions, emotions, tribalism, and selfish financial interests are more likely to hinder progress. Be sure that technological progress cannot be stopped. Some people naively believe that they can stop the progress by claiming that it is unnecessary or even impossible.
The same misunderstanding can be seen around the missions of individual projects. Each relevant project has its technological advantages and disadvantages. Therefore, they lend themselves to solving different problems. If someone claims that one particular technology will solve all the world’s problems, they are knowingly lying or believing nonsense. The world is constantly changing and with it the problems we have. We live in dynamic times where the solution that works well today may not be good enough tomorrow. Even if we have a suitable solution to a particular problem, we can have an even more useful and effective solution tomorrow. Therefore, it is necessary to constantly look for new solutions or improve existing ones. Technological progress will never end because the desire to change our world for the better will always be there.
False narratives may even slow down the adoption of cryptocurrencies, as newcomers have no desire to foster the bickering and negativity of individual communities. People naturally support other people’s efforts to solve problems. From the outside, however, the cryptocurrency space looks like a battleground for several groups, not a coherent community trying to push decentralization as a new principle. All projects together lose the most important thing, the trust of people who do not yet understand cryptocurrencies.
There will never be a perfect project without bugs or hidden design issues. Software development does not allow for such things. At best, we can get close to perfection, but once something changes in the external environment, it is desirable to change the source code as well. One project has no chance to satisfy 100% of users as different groups have different preferences. There is no point in looking for the best project. It makes more sense to settle for diversity.
Cardano is about technology
The IOG team has thoroughly researched all aspects of blockchain technology to improve it. It has the best experts in their respective fields. Processes have been put in place to ensure the best results. Cardano is being built as a mission-critical project. Cardano is being built just like software for nuclear power plants, aviation, space research, or healthcare. This is extremely important because if the concept of decentralization is to take hold, people will have their identity and assets on the blockchain. Cardano must not fail technically, as the higher the adoption, the more people would be at risk.
Cardano builds slowly but carefully and well on the first try. Thanks to this approach, we have a working Ouroboros Proof-of-Stake (PoS) consensus. It will celebrate its second birthday in 2022. All along, PoS has worked without major problems, without the need to reboot or hack. It took longer to create the PoS than everyone thought at the beginning. PoS is a technological innovation that many people doubted. Some even said that PoS would never be launched. Cardano proved them wrong.
PoS is an alternative network consensus to Proof-of-Work (PoW). PoS is more scalable, has faster transaction times, and is significantly more energy-efficient than PoW. Ouroboros PoS is not finished and will continue to evolve in the coming years.
Do we need such an innovation? From our point of view, yes, and in fact, we have no other choice. It is important to realize that innovation happens in all projects. Even in projects that are afraid to innovate, arguing that it is not needed. Cardano is not the only project that has PoS and there are other alternative network consensus mechanisms.
Evolution is a fundamental principle of nature. All organisms try to achieve the best results with the least amount of resources. This principle can also be applied to the comparison of PoS with PoW. The blockchain network consensus must first and foremost ensure as much decentralization and security as possible. Secondarily, it should strive for as much scalability as possible. All three parameters are important.
Security and decentralization protect users’ assets. Decentralization is a fundamental principle of the entire blockchain industry. Scalability is important from the perspective of economic sustainability. The lower the cost of the network to achieve consensus and the more it collects in transaction fees, the easier it will be to make the network sustainable in the long term. While second-layer networks will be used extensively in the future, the first layer is always essential and it is important that transactions are affordable for all.
Energy performance is also an important issue. The world is striving to reduce the consumption of all appliances and switch to green energy. PoW has been criticized by environmental activists and many people are moving away from cryptocurrencies because of their high energy intensity. PoS is an alternative consensus that is consistent with efforts to reduce energy consumption. PoW campaigners like to use false arguments and point to the fact that PoS is not secure. Bitcoin uses PoW and it is true that it has been running for a longer time, so it is time-tested. On the other hand, you have to look at the quality of decentralization, which is steadily declining. The reality is that Bitcoin may not be economically sustainable and its security may start to decline. It is relatively easy to calculate under what conditions this will happen.
Thanks to PoS, Cardano is one of the most decentralized networks in the blockchain industry and the team will strive to make further improvements in this area. Trust in PoS will grow stronger with each passing year. In 5 years, PoS will be considered as secure as PoW. There is no reason to think otherwise.
Technological progress is not only happening in the PoS area. Extended UTxO, an extension of the UTxO model used by Bitcoin, is also a significant technological innovation. Combined with smart contracts (Plutus scripts), Cardano is becoming a useful technology platform for building decentralized applications.
Protocols need a large network effect, which they can only achieve through utility. The utility will ensure the long-term prosperity of the protocol through the transaction fees collected. Platforms will have a big advantage in the future because, in addition to transaction fees, they will also gain resources through smart contracts.
Importantly, Cardano is significantly different from Ethereum, which uses an accounting-based model. Almost all other smart contract projects use similar technologies. There is no point in arguing which model is better in the context of this text. Both concepts will find their use. The important thing is that thanks to Cardano we have an innovation that will allow us to build new applications with different features.
The biggest current problem in decentralized finance (DeFi) is a large number of hacks. DeFi is definitely a relevant industry. If we are to transform the world of money and bring it completely into a world of decentralization, we cannot do without creating alternatives to current financial services. For that, we need security first and foremost. People must not feel that using DeFi carries the risk of losing their wealth. DeFi must earn the trust of users.
If you explore Cardano more, you will find that it innovates in every area you can think of. Of note is the Catalyst project, which allows people to vote on projects to receive funding from the project treasury. This is important because the ecosystem can do without venture capital (VC) funding. People can decide for themselves what is important to them. ADA coin holders are the owners of Cardano and will one day decide the future of the protocol. Every protocol must evolve to survive in the long term.
In nature, higher efficiency and the ability to develop are rewarded. Evolution is about finding the best strategy for survival, and it is almost always about having better resource management. Cardano is on the path of technological progress, increasing efficiency and seeking new opportunities.
Technological progress cannot be stopped by false narratives. It is true that the best technology is not necessarily the one that will be used the most. The blockchain industry is still in its infancy, and no one knows which projects will survive and which will stick around. However, it is clear that the ability to adapt to new conditions, innovate and deliver new capabilities is a huge competitive advantage. One could argue that Cardano’s development has been slow and cautious. Many projects have literally come out of nowhere and have everything users want. Teams have chosen a different strategy and may succeed. Let’s wish them well. Cardano is slowly and surely on its own axis.
Cardano has its own mission and definition of success
One of the widespread false narratives is that one blockchain project can solve all the world’s problems and thus no other project is needed. This is very irrational reasoning for many reasons. People choose their own solutions to a particular problem. One can assume that they rationally choose the best suitable solution, but the decision may not always be supported by logical reasoning. One’s own financial interests, emotions, neighborhood preferences, and other considerations may influence the choice. In addition, blockchain networks are global and people in different countries are solving completely different problems. If they have to choose solutions rationally, they are likely to choose a different project each time.
Let’s look at a specific example. The differences in needs are fundamentally different between developed and developing countries. Western countries have a well-developed financial infrastructure. Cryptocurrencies are seen as an investment tool or defiance against the traditional financial world and governments. Most people, including cryptocurrency fans, continue to use fiat currencies. DeFi is seen as an alternative for enthusiasts. Developing countries lack basic financial infrastructure. People often pay in cash and may not have access to the internet. If blockchain technology is used, the focus would be on low fees. It is useful to build a digital identity, which Cardano enables. DeFi and stable coins are a must.
Cardano is a mission-oriented project. The mission of the project is well known and many sources on the subject can be traced. Cardano wants to return sovereignty and freedom to the people. Especially to those people who need it most, the weakest among us. Cardano is a global financial and social operating system. The definition of success is giving financial identity to people who don’t have it.
It’s easy for Westerners to buy cryptocurrency on the exchange. People from developing countries often don’t even have an ID card. Therefore, they cannot open an account on Binance or Coinbase. Often they don’t even have the money to pay the fees associated with the purchase. Buying cryptocurrencies don’t really solve anything for them. These people don’t need to speculate on the possible future growth of value. These people need basic financial services and a trusted connection to the outside world. They need to get rid of middlemen who charge exorbitant fees for basic services.
Cardano is also a useful platform for Western countries and wants to enable the creation of alternative financial services. The aim of the project is not to make ADA coins the world’s new money. The goal is to create decentralized financial services that are demonstrably reliable and have a real chance of mass adoption. To do this, an algorithmic stable coin Djed will be created. Cardano wants to be the platform that enables the gradual decentralization of the Internet and enables the achievement of Web3 ideals.
Cardano’s mission is quite different from what Bitcoin is trying to do. Bitcoin is considered to be a store of value. For the Bitcoin community, Web3, tokenization, and stable coins are a nightmare. It will be very difficult to build alternative financial services on top of Bitcoin, as smart contracts on the first layer are needed for that.
The different technological characteristics and the different missions of each project make them almost incomparable. In some cases the differences are significant, in others, they may be more intertwined and one can speak of competition. Anyway, it makes no sense to reject the missions of different projects and prefer only one mission just because they all use the blockchain as a repository and decentralized network for consensus.
Technology and using it to solve a particular problem are two different things. The ability to own property without an intermediary and dispose of it freely is a huge innovation and definitely worth expanding the possibilities in other directions. Let’s not believe the fools who claim that there is no point in trying to expand the possibilities of use. Rather, let’s give it a try, look for new avenues, and make up our own minds about it. Every failure is a step forward. Those who claim otherwise are afraid of success and it is good to look for the reason for the fear.
The search for new uses of decentralization is in line with evolutionary development. Let’s consider, for example, NFT. Will NFT technology bring disruption to the media world, or will it be a stepping stone to something better? No one will tell you definitively, but we would bet more on disruption.
Adoption
Adoption is crucial for any project. This makes blockchain projects no different from, for example, regular companies. As projects differ in their missions and technological capabilities, so too will users, who will choose projects based on their needs. They are likely to use multiple projects as each project will meet a different need. People use a variety of social networks and it is not possible to say that there is one that will satisfy them all. What differs is the time spent on each network and this is an individual matter.
Cardano is being built in a way that will allow us to write demonstrably secure financial services. While certainty can never be 100%, it is possible to raise the quality bar. Such services may take longer to build and will be more expensive to develop than on other platforms. Anyone who wants to create a reliable financial service and prevent easy hacks will take advantage of this opportunity. If a new financial backbone of the world and new decentralized banks are to emerge, security will be paramount. More than likely, there will be a demand for the best technology available at this early stage of adoption.
Mainstream adoption of cryptocurrencies is yet to come. DeFi adoption has barely even started yet. While tens of millions of people around the world own cryptocurrencies, most are just holding them. You can’t say they’re actually using them on a daily basis. Cryptocurrencies will only succeed when people pay with stablecoins, hold tokenized stocks on their wallets, treat DeFi as a viable alternative for consumer credit, and log into Web3 services through their own blockchain wallet.
People are impatient and would like to see all this today. They see the numerous hacks or the flood of useless NFTs as evidence of the failure of the whole concept of decentralization in specific cases. In practice, creating a more secure technology and its adoption is a much slower process than most of us would like. Seeing NFTs on Twitter profiles, efforts to use stablecoins for social media payments, the creation of digital identities for students in Africa, and many other partial successes reassures us that we are on the right track.
Optimists give more weight to successes. Pessimists focus more on failures. If people’s views are distorted by selfish financial interests, they will not be objective in their public opinions. Anyone who is intellectually honest must recognize that Cardano is a legitimate project and that the technology being built deserves far more attention than is being given to it.
Many projects come up, get noticed by users, and disappear after some time. There are many reasons for this. For L1, the projects that disappear are the ones where the team has stopped working on them or doesn’t have a big enough team to keep up with the competition. With DeFi services, we often see a broken economic model, or an inability to maintain a larger user base over a longer period of time. Cardano has a large team full of experts and is being built perhaps the fastest of any project. Paradoxically, slow development is sometimes criticized without people thinking about how Cardano is different and that the scientific approach is slower than the “move fast, break things” approach.
Copying one concept over and over again has not brought anything new so far and we see hacks on almost all smart contract platforms. This is not to say that there will never be a hack on Cardano. It will happen. It is important for the success of the project that the frequency of hacks is significantly lower and that the same mistake can be avoided next time. There is a real chance that Cardano will be like that. In that case, there will be no obstacle to mainstream adoption.
Fortunately, Cardano has a huge community that understands the project’s mission and knows its definition of success. Cardano is built for the mainstream, not for enthusiasts who are willing to pay high fees and see hacks as a normal part of life. The mainstream will demand higher quality and mistakes will not be forgiven. The average user is not willing to risk a fortune in DeFi. If any blockchain project seeks adoption at the level of global companies or countries, there is almost no room for problems. Everything must work reliably.
The team is working with governments in developing countries and Fortune 500 companies to drive the adoption of Cardano. The team takes development very responsibly, knowing Cardano may one day protect the assets of a billion people. With such a huge challenge ahead, the team must proceed with caution and care.
Conclusion
Blockchain is seen as a disruptive technology that will change people’s habits and business models. This will only happen if the technology is mature and ready enough. People tend to overestimate technology in the short term and underestimate its impact in the long term. Blockchain technology and decentralization concepts will continue to evolve. Smart contracts, tokenization, NFTs, Proof-of-Stake, stablecoins, and other things can be considered an evolution that has crossed the shadow of Bitcoin. Bitcoin is what it is, it doesn’t change much. That’s why evolution is happening within other projects. Cardano is a project that will be solid in its foundations but will continue to evolve with the needs of our society.