Waiting for Cardano Alonzo Hardfork, Will it Affect ADA Price?

Portalkripto.com– The Cardano blockchain network development will soon be released simultaneously on September 12, 2021. This Cardano network update is considered to be a heavy competitor to Ethereum.

Ethereum Network’s Tough Rival

The Cardano Alonzo hard fork is part of an upgrade to the Cardani blockchain network that will bring out the full functionality of smart contracts. The most well-known and most active function of smart contracts by far is Ethereum.

However, with this update, Cardano will have more effective functions for crypto project developers using the Cardano network. In addition, with the smart contracts renewal, Cardano will be considered more effective in printing Non-Fungible Tokens (NFT), which majority utilizing the Ethereum network.

So far, based on the latest blockchain development trends report from Outlier which analyzed the top 50 blockchains based on their original asset market cap from July 2020 to June 2021, it shows that Cardano has the most commitments per month on its GitHub code repository, at 701.

SEE ALSO: ADA is Still Difficult To Break $3 Price, Bearish Signal Haunting

This achievement is much higher than the previous year that was at 24%. Meantime, Ethereum came in second place with 447, IOTA ranked third with 394, Filecoin ranked fourth with 368, and NFT-centric blockchain streams round out the top five with 305.

However, Ethereum and Cardano currently rank first and second in terms of monthly active developers with 168 and 165 per month, respectively.

Getting Criticism Attack

The launch of Alonzo Cardano is inseparable from criticism from several developers and crypto lovers. The criticism targets the concurrency problems found on the Cardano-based decentralized exchange (DEX), Minswap.

This issue is based on the concern that the network can’t interact with the program or protocol all together at the same time. Critics compare it to the Ethereum network which provides smart contract operations to run concurrently.

Furthermore, concerns over this network development are aimed at Minswap efficiency which can only handle one transaction per block.

Even so, the Cardano developer responded to the criticism. The Cardano team published an answer to the criticism on September 5. They describe the non-shock transaction validation process at Alonzo and highlight the following about the printing process via Plutus script:

“A key aspect of processing transactions is validating the actions taken. A transaction of taking an action when it contains data in the fields specified for that action. For example, a transaction of spending UTXO U when it contains a reference to U in its input field, and prints an X token when its mint field contains X.2.”

Besides, from a technical point of view, the Cardano team explains that transaction validation is divided into two phases. The reason? That should limit the number of validation work without compensation by the node:

“Each phase has an objective in achieving this goal. Roughly speaking, the first stage checks whether the transaction is built correctly and can pay the processing fees. The second stage runs the scripts included in the transaction. If the phase-1 transaction is valid, the phase-2 script is executed. If phase-1 fails, no script is executed, and the transaction is immediately thrown away.”

Furthermore, the Cardano team states that Alonzo introduced a special provision to compensate nodes for their work if the script isn’t validated. That’s why they will rely on the introduction of collateral in the transaction, which is basically the amount of ADA that will be collected in the fee form if phase-2 script validation fails.

Influence ADA Price Increase

This development, other than to increase the Cardano network capacity and its performance, it will affect the price of the ADA coin, which is Cardano’s original coin.

Many analysts expect September to be Cardano’s month. With the launch of Alonzo can add power and market interest to purchase ADA.

ADA is predicted to touch more than US$ 3 dollars. Even though this week, ADA is still in a bearish sideways zone after Bitcoin’s liquidity hit on September 7th.

Currently the price of ADA is at the range of US$ 2.48, down 17% over the past week. However, ADA is currently the third largest cryptocurrency based on the market cap.

 

AUTHOR: IQBAL LAZUARDI/PORTALKRIPTO.COM

TRANSLATOR: FARIZA AULIA