Investing.com – is falling along with most of the other major cryptocurrencies this Tuesday. The ADA loses 4.34 percent at a price of $ 2.1029, which shrinks the market capitalization to $ 67.05 billion.
The loss of the past seven days now amounts to over twelve percent. The ADA thus shows the same development as and, which had to accept similar discounts.
What comes after the ADA Alonzo upgrade?
The Alonzo upgrade was successful on September 12th and offers developers a basic way to create smart contracts, but there are still scalability issues.
But that’s not all. David Orr from the IOHK raises other problems. For example, micropayments are not possible on the Layer 1 blockchain. In order to make such services economical, the transaction costs would have to be reduced considerably, which is not technically possible.
Such low fees would make the network susceptible to Denial of Service (DoS) attacks. For little money, attackers can flood the blockchain with transactions, so that everything comes to a standstill.
In addition, there are ever greater demands on the storage of the complete transaction history, which ultimately also leads to higher operating costs of the network.
These are all reasons why they are working on the Layer 2 solution called Hydra.
If Hydra goes online at some point, it could potentially have 1 million transactions per second, according to previous information. However, the IOHK has already said that this is merely an intended goal. The actual values can be lower in reality.
“Terms like one million TPS (transactions per second) have been around for a long time. This number is daring – while it remains an ambitious number, the ultimate goal of any system is above all flexibility. This is the only way that performance can grow with demand. “
It is precisely this desired flexibility that Hydra is supposed to bring. The developers are aiming for an off-chain ledger to the Layer 1 blockchain. In Greek mythology, the hydra grew more and more heads in dangerous situations. And that is exactly the aim of the Layer 2 solution. If necessary, further off-chain ledgers (heads) are put into operation.
With the relativization of a possible 1 million TPS, the IOHK also proves that it is not enough to sketch large theoretical figures on paper. Because while one is now questioning whether the million will be reached at all, in March 2020 there was still talk of 1 billion TPS.
“We know that a single Hydra head can go up to 1,000 TPS. So if we run 1,000 heads in parallel (say, one for each Shelley version stake pool), we should hit a million TPS. That’s impressive, and so do we are miles ahead of the competition, but why should we leave it at that? With 2,000 heads we get 2 million TPS – and if someone demands a billion TPS, we can tell them to just run a million heads. “
We will only know what performance Hydra will ultimately bring when the upgrade is online. Until then, in-house forecasts should be treated with caution.
The Cardano summit from September 25th to 26th will show how far the development has progressed.
Cardano has to stay above $ 2
In order to avoid worse things, it is now of the utmost importance that the support does not fall below the psychological mark of $ 2.0. This support is reinforced by the 50 percent Fibonacci retracement of the rally from $ 1.02 to $ 3.09 found at $ 2.06.
This level was tested with the flash crash on September 7th and yesterday. If the daily closing price falls below this, we have to be prepared for losses at the 38.2 percent Fibonacci retracement of 1.81 dollars and the 78.6 percent Fibonacci retracement of 1.46 dollars.
On the other hand, if the ADA succeeds in rebounding from the support area, a recovery to the 38.2 percent Fibonacci retracement of $ 2.30 and the 23.6 percent Fibonacci retracement of $ 2.60 is possible.
From Marco Oehrl