Cardano

Thesis

From my perspective, Cardano is easily one of the most promising projects in the crypto sphere. With it’s strong leader Charles Hoskinson, strong foundation that it was built upon and it’s intricate business plan, Cardano has enormous potential to be the biggest player in Crypto.

Charles Hoskinson, CEO of IOHK

Leadership

Probably the most important person to pay attention in crypto right now is Charles Hoskinson. So who is he? Charles co-founded Ethereum with Vitalik Buterin after joining the founding team in late 2013. He eventually left Ethereum due to disputes regarding venture capital and formal governing structures. He inevitable began working on IOHK (Input Output Honk Kong) with a former Ethereum colleague Jeremy Wood. IOHK’s main project is Cardano which uses the ADA cryptocurrency within a public blockchain and smart-contract platform.

To me, Charles Hoskinson is the Steve Jobs of Crypto. He is highly intelligent and it’s clear to me when listening to him speak about cardano that;

1.   He believes in the project and he’s not in it for the profits. Similar to entrepreneurs like Elon Musk, he’s looking to solve some of the world’s toughest problems.

2.  He, along with the IOHK team, have thought deeply about the potential issues and roadblocks they can face and so they are one step ahead of not only the industry hurdles, but their competition.

I highly recommend subscribing to his YouTube channel and listening to what he has to say. Also, here’s his Ted Talk on decentralization:

 

Cardano's Foundation

Cardano was built, as Charles likes to put it, on first principles. The team first wrote 90 academic, peer reviewed papers before beginning the company. They analysed and thought deeply about what they wanted to accomplish, and then did extensive research on what was and wasn’t possible given the science. With this in mind, Cardano was built on the shoulders of giants, it was built as a 3rd generation crypto to do everything right that Ethereum is doing wrong. So what is Ethereum doing wrong?

1.       Scalability – For those familiar with Ethereum, you know that it has huge scalability issues. It’s extremely difficult for the platform to go from dozens to hundreds to thousands of dapps and it’s a very expensive operation to run, as shown by the enormous gas prices we’re seeing right now. Ethereum plans to fix these issues with things like ETH 2.0 but I’m becoming skeptical about Ethereum being able to ever have the scalability of Cardano as it was never built with this intention in mind.

2.       Inoperability – Ethereum has huge inoperability issues. It has a large platform of systems running next to each other without being able to connect to one another. There are other cryptos looking to solve these issues such as Polkadot and ChainLink, but this is still an inherent problem in Ethereum’s design.

3.       Sustainability – Similar to Bitcoin’s design, as the system grows, innovation will slow down and die. Why is this? An open protocol system means that as more and more users join the system, it becomes near impossible for everyone to agree on what direction to take. This is why you see so many hard forks with Bitcoin. Ethereum could be destined to have the same problem. Cardano looks to solve this issue with its governance system, a common practice amongst third generation cryptos. I’ll be writing a blog post in the coming weeks describing the governance system in greater in detail. 

Cardano's Opportunity

Even with all the strengths I described above, Cardano’s biggest strength stems from the market it is focusing on. To get a clear picture, let us analyze what Ethereum is doing. Ethereum has been approaching fortune 500 companies like IBM and Samsung and working with them for a year to get their network implemented within the company. After about a year, what is essentially happening is these companies are taking all of the knowledge that Ethereum is giving them, saying “thank you for that” and then building their own crypto/network in house. They’re doing this because building it in house enables them to tailor it to their specific needs. So how is Cardano’s solving this issue with companies taking the knowledge and doing it themselves. Well, they’re focusing on emerging markets, more specifically Africa.

 

Cardano is really pushing itself in Ethiopa right now, a country of 110 million with a large problem of lack of financial infrastructure (similar to a lot of countries in Africa). There are roughly 3 billion people in the world that aren’t set up with a banking system,5.6 trillion dollars of illiquid wealth in Africa alone. What you are seeing is a lot of fortune 500 companies trying to enter these markets and sell their goods without a solid way of doing so. 

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Cardano is looking to not only enable countries like Ethiopia by providing a decentralized platform but once they enable these countries, they can now approach the fortune 500 companies with expertise, regional access and government partnerships (they’re announcing a huge government partnership very soon). This gives them a strong competitive edge as companies can now enter these emerging markets significantly easier through Cardano’s system which should be highly integrated into those societies.  The problem Cardano is looking to solve is worth trillions and trillions of dollars, and they look to have a very solid grasp on the issue and how to solve it. To call myself bullish on Cardano would be an understatement.

Predictions: For this year I see Cardano landing in the $5-$10 range, most likely closer to $10 with all of the great strides they’ve been making so far this year as well as the raging bull market we’re in. In the next 5 years, I value them at a minimum of $1 trillion, putting their price at around $35. I genuinely think they will be much higher than this but I guess we’ll see. 

"A society grows great when old men plant trees in whose shade they know they know they shall never sit"

Thanks for reading this analysis. There’s obviously a lot to cover with massive projects like Cardano, if you think I missed anything let me know!