Is Cardano the Next Big Thing for NFTs?
Non-fungible tokens (NFTs) have launched the art world into a frenzy. For artists looking to mint an NFT however, the fees are sometimes prohibitively expensive. An NFT launched on Ethereum could cost hundreds of dollars in confusing gas and platform fees not to mention the stigma of creating environmentally damaging art attributed to the energy cost of validating the Ethereum smart contract. The excessive, fluctuating gas fees are based on the amount of traffic on the blockchain. The more people waiting in the virtual line to have contracts added to the block chain, the higher the fee. This bottleneck problem is known in the cryptoverse as a “sustainability” issue.
Ethereum’s solution is to make improvements through a series of upgrades in the foreseeable future, including moving to the more energy efficient Proof of Stake (PoS) consensus model among other things. While some patiently wait for ETH 2.0, the third generation of blockchains are already underway.
Rather than fix issues piece meal as they appear, the Cardano blockchain decided to expend more effort and research in the development phase to account for future expansion considerations at the outset.
Charles Hoskinson, founder of Cardano and Co-founder of Ethereum, has amassed a loyal following. Cardano fans worldwide look to this fearless leader (or cultish figure depending on who you’re asking) to transform the second generation blockchain technology and blast it into the next generation.
Those unfamiliar with Hoskinson or references to Crypto 2.0 and 3.0, might wonder exactly what the hype is about? What fundamentally makes it a better blockchain? Cardano is purported to be “the first blockchain platform to be built using peer-reviewed research.” The sheer amount of academic papers published by the team appear to validate this claim.
The proof of work (PoW) consensus algorithm, essentially the Bitcoin engine, runs the original blockchain crypto 1.0 and 2.0 machines Including Ethereum. Still Bitcoin, laid the framework to spring forth the first digital currency transacted without a third party.
The immense growth of decentralized finance (DeFi) is due almost entirely to second generation blockchains like Ethereum. With expanded functionality, they provided the ability to run multiple decentralized applications (dApps) and token projects, including NFTs using smart contracts. Smart contracts provided more capabilities and applications for blockchains, but they basically still ran off the same Bitcoin PoW 1.0 engine.
Cardano is different because its PoS scales faster as processing is divided, providing energy efficient transactions. The ability to communicate with other chains known as “interoperability” is another desirable feature. This would in theory allow Cardano currency known as ADA to convert back and forth between other crypto. Users would no longer have to exchange currency every time there was a use case for another crypto. They could instead simply use Cardano on and off ramp for such currency exchanges.
In addition, the illusive smart contracts that many users have been asking for are now functioning on the testnet, and Cardano currently has pioneers testing components enabling Cardano to improve functionality and quality.
The Cardano roadmap lists the development stages of their blockchain. Alonzo blue, part of the Goguen stage, recently completed. Cardano now has their infrastructure, their nodes, and the ability to write smart contracts onto the blockchain.
The Cardano 360 team also reported that Plutus partners are working on use cases right now including Oracle Implementation, DEX token swap, liquidity and stake pools, a crypto backed stablecoin, and NFTs. This means the Cardano blockchain is now transforming from a highly academic research endeavor to a usable product. They expect functioning decentralized applications (dApps) by the end of June. These rollouts place Cardano high on the list for a potential explosion in the NFT market.
When the Goguen rollout is fully enabled, estimates say possibly August, the potential will exist for artists with no technical backgrounds to create executable and functional smart contracts on Cardano. This creates a new world of artist access to online marketplaces.
The Basho rollout provides scaling and optimization of interoperability and sidechains. For NFTs, this will provide wider network access and limitless potential for growth because new experimental features can be added to Cardano anytime without affecting the security of the main blockchain.
The final Cardano era, Voltaire, will transform the network into a self-sustaining entity. The decentralized infrastructure maintains the network, but the option to make improvements over time will be needed. The ability for network participants to propose improvements will be solidified with governance features in Voltaire providing the Cardano blockchain the ability to scale and adapt to whatever the future holds.
Some exciting projects are already springing up around Cardano. Cardano Kidz, one of the first to build Cardano NFTs, placed their confidence on the network even prior to the first smart contracts, but why? Tokens in Cardano are native, or at the same level as ADA, giving Cardano the potential to lead the NFT revolution in issuing, curating, and transferring. That means an artist can mint an NFT right now and issue it as a limited token, without the need for a smart contract. With Cardano’s ability to inspect trustworthy machinery, users can obtain proofs of guaranteed eraser in order to move images from one place to another without risk of copies remaining in existence. The problem is the process takes a little research and the average person cannot hop on, upload an image, and “click mint.”
With the rollouts this June though, a user friendly Cardano NFT platform is right around the corner. Waiting for ETH to fix a flawed fee system may take a while. The blockchain world is about freedom, so the more options and chains ready to provide and serve the better. While Cardano took longer to release and create their functionality, the intense development and forethought may prove to be the edge the art world needs. The next big thing for NFTs, just might be Cardano.
