Is Cardano the Cryptocurrency’s Next Visa?

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Until far, cryptocurrencies have primarily been associated with financial speculation. While this causes tremendous volatility in the short term, it also encourages developer activity and helps to generate practical use cases.

The first programmable blockchain, Ethereum (CRYPTO: ETH), is demonstrating the potential for decentralized apps (dApps) to offer utility to the crypto realm. Cardano (ADA -0.01% ), a promising project that also allows for smart contracts, expands the scope of big innovation even further.

Cardano’s network boasts several key traits that offer it a distant chance of becoming the crypto economy’s next Visa (NYSE: V). Let’s look at it more closely.

Cardano’s development process is divided into five stages, with the last two focusing on scalability and governance. When providing new features and enhancements, the founding team uses a peer-reviewed, academic-focused system. This may result in lengthier development times, but it surely encourages an environment in which all potential factors are considered. Cardano has a competitive advantage in this regard.

The network can currently process 250 transactions per second (TPS) because to the Ouroboros proof-of-stake consensus method. When compared to the proof-of-work method used by Bitcoin and Ethereum today, this is a more energy-efficient way to validate transactions on the blockchain. While Cardano’s theoretical capacity of 65,000 TPS is nowhere near Visa’s, it is significantly faster than Ethereum’s current throughput of 14 TPS.

But there is one thing that stands out. Cardano’s throughput must drastically increase if it is to become widely adopted. Demand from users will undoubtedly increase as the crypto economy grows. And 250 TPS isn’t enough for a coin to be called the “Visa of crypto.”

Fortunately, Cardano’s development team is hard at work bringing Hydra, a major component of the fourth phase, to market. Hydra will significantly boost ability to serve 1 million TPS by using off-chain ledgers known as Heads. While this is a staggering figure that dwarfs even Visa’s throughput, Cardano’s true goal is to reduce latency, or the amount of time it takes to process a transaction. However, having a network that can meet rising demand is critical.

Any great advancements in blockchain technology are fraught with risk. Cardano will be a great influence in the world of dApps, especially when it comes to decentralized finance (DeFi) protocols, assuming Hydra is implemented without major problems and scalability skyrockets as a result.