Smart contracts are pieces of self-executing computer codes that start working soon after meeting certain prerequisites.
The Alonzo update empowers Cardano with smart contract capabilities and it will help in improving its functionality in the following ways:
- The upgrade is supposed to pitch Cardano against its competitors Ethereum and Solana.
- It would help Cardano deploy DeFi apps for widening its ecosystem. Cardano has currently 150 projects developing their ideas via Cardano’s Project Catalyst innovation program.
- The update would allow inclusion of Plutus scripts, which uses simple functional language like Solidity or Haskell, and allows users to put scripts on chain or on blockchain ledger.
The Alonzo Hard Fork update is an important part of various stages of Cardano’s development. Out of the 5 stages, Byron, Shelley, Goguen, Basho and Voltaire, Cardano has reached the Goguen era, which had to bring in smart contracts. While Shelley era decentralised the core of the Cardano system, Goguen era offers following capabilities besides giving smart contracts according to the Cardano Foundation:
- Build decentralised applications (DApps).
- Add a multi-currency ledger that will extend the usefulness of Cardano, to create new natively supported tokens.
- Creation of NFTs, new cryptocurrencies and many digital and physical assets on Cardano.
Even the Alonzo update will have three levels, Alonzo Blue, Alonzo White and Purple. In each stage, developers will have to remove bugs before officially moving to the new era.
Some Cardano users complained of longer time in transactions following the upgrade. In response, Input-Output company, the developer of Cardano told users to be prepared for inevitable initial technical hiccups that they may encounter in Cardano post Alonzo upgrade. They said Cardano will take time to become a sophisticated ecosystem of consumer ready DApps. Cardano was launched in 2017 by Charles Hoskinson to counter the dominance of Ethereum in DeFi, while maintaining interoperability with Ethereum and other blockchains.
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