Crypto:  Can Cardano Deliver The Goods?

It is getting down-right boring always talking about how crypto prices have declined. When prices will recover is still an open question.  However, there is no question that value is available and there is less risk in bitcoin, Ethereum and Ripple just for example than in the average Nasdaq stock.

When the bull market in crypto starts, everybody will want to know which names will lead.  Long time students of the stock market will insist going with big caps. History dictates that market leader will always lead the charge.  If that theory holds, bitcoin will be the right name to go with.

This makes sense. Bitcoin not only is the biggest but is synonymous with crypto.  It is the most recognized brand name. Only about 8% of Americans own crypto and fewer still have the time to research all of the other names.  So when new investors enter the market, Bitcoin is a natural.

Stock Market Theories Don’t Always Apply

But putting brand names aside and with all respect to Mr. Dow and Mr. Jones, technology is a different animal. It changes so fast the today’s leader can turn into a bum in short order (just look at Yahoo!). So, what we decided to do is to invest some effort into looking at some of the alternatives to nitcoin, Ethereum and Ripple.

Just about every ICO would love to disrupt any one of the big three. Already we are hearing grumblings about in bitcoin and Ethereum being inflexible.  Maybe there is some truth to the noise, maybe just jealousy, so let’s take a look at some of the more prominent names.

Is Cardano Better Than Ethereum?

First, a word about Cardano, which is run by a large group of highly talented folks. Their blockchain platform is claimed to, “ . . . have more advanced features than any protocol yet developed and the first to evolve out of scientific philosophy.”  Founders also present Cardano as being built from the ground up and the first cryptocurrency to be based in Haskell code using something call Recursive InterNetwork Architecture or RINA.

The two in combination promise that transactions should be layered based on size and scope.  This opens the door to far higher speeds. This is their secret sauce.

Cardano founders emphasize flexibility that Haskell’s functional programming provides as when it comes to upgradability using soft forks and a treasury system that ensures stability.  

To the average investor, there may be very few differences in the business side of Cardano and Ethereum.  However, supporters seem to really like these engineering features. Even critics agree that there are relevant design differences and this could be the key to challenging Ethereum. Supporters claim Cardano system will process transactions more quickly as it scales allowing for millions of transactions without speed being compromised.  

A Better Mousetrap?

If Cardano can deliver both higher speed and while keeping transactions costs to perhaps a few cents, it would be a huge benefit over the current state of bitcoin and Ethereum.  But will Cardano deliver all the benefits it promises?

The platform was released just last September so there’s still time needed for judging.As Forbes stated it in a recent February article, “there is a catch to all the sublimely convincing marketing put forward by the parent owner of the project: Cardano does not have a product”.

And that marketing has lifted the roof off expectations. By last December, its value shot up to a $30 billion just four months after launching.

A Marketing Bias

The prudent approach to Cardano would be to get a bit more data to confirm their ability to deliver the goods.  Some will be critical of the marketing hyperbole, but I like their pitch. As an investor lacking the depth of a developers technical knowledge, I want to be able to visualize and compare expected results.  I can relate to a marketing plan better than a 30 minute talk by Vitalik Buterin.

The crypto world could use a few more braggarts: think Mark Cuban.  Way back in the early dotcom days he managed to sell his fledgling to Yahoo for $5.7 billion.  So keep an ear out for Cardano’s braggarts. If they deliver, the crypto world will shake.

Featured image courtesy of Shutterstock. 

James Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.