Debunking Cardano’s FUD.
Over years critics of Cardano came up with lots of misinformed statements. Let’s decompose them.
“Oh on chain governance, you want plebs to vote on critical network parameters (Cardano: k, a0, block size, transaction size, etc)”?
Well it is a very sensible view, of course it cannot work like this, Cardano is planning representative democracy with domain experts which people will vote for. In this sense it is similar to existing democracy but with on blockchain chain voting. It is the last part of Cardano’s roadmap, so called Voltaire era. To some people’s surprise some excellent proposals have been contributed outside of IOHK/IOG’s research notably from stakepools / community, e.g. https://cips.cardano.org/cips/cip7/. It is resonable therefore to expect that over time domain experts will emerge, which people will choose (elect for terms).
“I looked at Cardano’s Ouroboros and WTF, it doesn’t even have a fee auction system.“
L1 resources are very precious for blockchains with relatively small block sizes! without a doubt. There is now a fee auction system in Alonzo but no software supports it yet (apart from core ledger). It was introduced for different reasons — security as far as it is communicated. It could, however, be used one day for a fee market on L1.
Cardano wants to scale with it’s community but without increasing fees. Right now transactions going over capacity of mempool would be dropped but user would not be charged for them due to eUTxO accounting system, which IOHK/IOG’s scientists discovered. One could increase mempool a bit so they would get queued up, at the moment, however, the correct strategy is for wallets to retry transactions after so called TTL passed (Time To Live).
Generally on L1 there is now plenty of capacity for increases of throughput, up to 2 MB blocks which would give Cardano ca. 250 TPS, enough for years to come. Real scaling, however, needs to happen on L2, L1 should be just proof checker but we are not there yet. This is where BASHO era comes, realistically 2022.
“Hydra L2 scaling is years away!”
This is not true, first basic version of Hydra L2 protocol has been demonstrated live in Berlin by the devs. I think it is reasonable to expect first Hydra Head protocol delivered with hydra-node without extensions yet until end of Q1 2022 (don’t hold me to it, it’s an estimate).
“Cardano can only do 6–7 TPS, after 6 years of research, it is a scam”
Yes with ca. 65kb blocks and avg 20 sec internal between blocks — it is what it can roughly do.
Cardano could do much more if desired, up to 2 MB blocks, every 20 secs or less could very quickly end up being >= 250 TPS the question is why? At the moment it is not necessary based on demand.
In addition going very fast on L1 network centralises it because you need lots of storage, sure you could have a concept of archivers like Solana has but there are trade-offs with this, you cannot validate easily chain from the beginning.
There is a notion in blockchain called: inclusive accountability where other people can check up on your work, this is pretty expensive in general and Solana makes it even more expensive (after some time where archiving takes place). Just like Ethereum 1.0 Cardano plans to scale via L2s, this is where transactions and execution should and will take place, L1 is just for settlement.
Well, chain still splits, ETH 2.0 is still not reality, you pay for failed transactions, ZkSnarks are not here, Arbitrum / Optimism are far from perfect and you need new compilers for smart contracts (not isomorphic), well I don’t know, to me this looks like a Proof of Concept that became too successful.
“IOHK/IOG programmed cardano in Haskell! Very few open source contributions they have”.
“Haskell for smart contracts in DeFi, lol”?
While Haskell is considered disadvantage in some circles in some more traditional professional investment banking companies it is rather an advantage. So it really depends who you ask, in terms of numbers fewer people but sometimes high professionals in IT finance sector know it.
“Nobody is building on Cardano”
This is of course not true, there are many many companies and start ups building and for Catalyst Fund 6 (Cardano’s on chain governance system) there is 800 proposals fighting for only 4 mln USD, which means there will be lots lots of losers :(. Next one Catalyst Fund 7 is shy of 8 mln USD
“eUTxO is not suited for DeFi”
Let’s not forget that DeFi is not everything but it is absolutely suited, it is just harder because you have to make a jump as a programmer from knowing how to program single-core processor to a multi-core processor. It doesn’t happen over night. Many companies / projects building on Cardano found solutions, some quasi-decentralised some completely decentralised.
Maladex solves concurrency scales beyond memory limits and designs the best possible Cardano DEX
Maladex order matching engine achieves the maximum concurrency as defined by Amdahl’s law and introduces a scaling…
“Charles was kicked out of Ethereum”
The truth is that he did disagree on some fundamental issues with other founders. It is actually quite common across various companies. Now he can realise his vision. Some arguments put against him are actually advantages (paradoxically).
“Cardano is ok but damn it is slow”.
Peer reviewed research is not fast for sure but correctness is for sure super important, also Ooroboros, eUTxO, Hydra Isomorphic State Channels and many more papers are something that IOG and others are innovating in. Innovation takes time.
If you honestly look around the ecosystem, what you will find is that 80% copy something, add 20% innovation on top of it and launch a project, if you are lucky. Collectively there is a lot of innovation in the crypto space. Last but not least Cardano makes everything open source and patent free, recently this is less and less common.
“Nobody does peer reviewed research, feels like waterfall, not agile software development methodology”.
Would you launch a rocket in an agile way? Well you shouldn’t. Would cost you millions if not tens of millions. Some systems are not suited for pure agile. If you consider Cardano major upgrades they don’t feel like waterfall or? Byron, Shelley, Allegra, Mary, Alonzo.
I would call it a hybrid system, design upfront (blockchain is specific, and can be hard to change) and then agile.
“Cardano doesn’t look like any other blockchain, it is slow to launch”.
Cardano did one of the most important innovation in the space (Also Tezos has it) that majority people don’t realise it is called Hard Fork Combinator.
You see blockchains overall are extremely hard to upgrade — hard fork combinator could be one of the most important features Cardano has. I am not even kidding here. In software development updating system with confidence is super important, as important as air programmers breathe.
“Bitcoiners say that Cardano’s pre-mine is a scam as all PoS coins”
Bitcoiners have their belief systems yes often not true. PoS is not a scam, it just has certain characteristics. Bitcoiners claim that it is always about founders making themselves rich. Not true at all, blatant lie in fact. Actually not in all PoS projects coins somehow are retained by an organisation or organisations, in NANO cryptocurrency coins were discharged to the public in a so called faucet. There is one problem though, they forgot to leave enough for themselves and NANO has no treasury system and it ended up being almost forgotten.
In Cardano funds were distributed to 3 entities, Cardano Foundation, Emurgo and IOHK. All these organisations have a mandate to bootstrap Cardano network and finish roadmap. What many forget is that these funds are not for those entities to become rich and retire but rather to grow ecosystem to the point that it can sustain itself from Cardano’s treasury system. Blockchain system and projects should prevent us into putting trust into some entities, this is very well true, in fact those systems should be done as per mantra:
“can’t do evil > won’t do evil”.
Life, however, is not black and white, bootstrapping project without any form of centralisation at the beginning is not feasible. Since Cardano’s roadmap is very ambitious, yes Cardano Community has to put trust into those 3 entities for relatively long time. It doesn’t automatically make it a scam, it is just a different risk profile. In case of Bitcoin though, let’s not forget that while Satoshi is not touching his pre-mined coins (1 mln BTC), it is not certain he won’t, each year probability increases but it is not probability of 1, in fact it is asymptotic to 1 in mathematical terms.
“Bitcoiners say that PoW is the only secure consensus mechanism”
PoW is a form of a consensus algorithm with well studied cryptographic features — without any shadow of doubt, however, as Cardano proved with a release or Ouroboros: https://eprint.iacr.org/2016/889.pdf and it’s further iterations and extensions it is possible to have a PoS protocol that is secure, in fact Cardano is currently securing about 71 bln USD of value.
“Cardano is a ghostchain, there is very little activity comparing to Ethereum?”.
Majority of activity on various chains is either caused by people. In case of very well established blockchains like Bitcoin, Etherum or Litecoin, there is tremendous amount of activity but these chains have launched many years ago. As for Cardano, launched in 2017 so relatively new actually. Shelley (staking) launched in August 2020, then launched native assets and NFTs in March 2021 and since then there has been very impressive amount of assets issued and exchanged, almost 1,5 mln at the time of writing and number of transactions is growing on average epoch over epoch with small local minima. Last but not least Alonzo, bringing smart contracts launched on 12 September 2021.
More details on Cardano Blockchain Insights: https://datastudio.google.com/s/jTIH0j9zrZo
DeFi on Cardano still didn’t launch and while there are initial smart contracts being launched like Spacebudz marketplace: https://spacebudz.io/, they don’t generate yet enough of on chain volume. There is also Charlie’s oracles generating transactions and some lesser known contract transactions. DeFi is said to be explosive within 3 — 6 months, Q4 2021 and Q1 2022.
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