Cardano Alonzo hard fork: what you need to know

Cardano Alonzo hard fork: what you need to know

Cardano’s Alonzo update brings the network much closer to its full capabilities.
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The Alonzo hard fork is a major upgrade to the Cardano network that sees the long-awaited implementation of smart contract functionality. Smart contracts are pieces of computer code that run automatically when certain predefined conditions are met. After the Alonzo update, anyone will be able to create and deploy their own smart contracts on the Cardano blockchain, paving the way for native decentralized applications (dapps).

The system update, which is expected to be fully rolled out sometime in the third quarter, marks the end of Cardano’s Shelley era and the beginning of the Goguen phase. While there is no set date for the end of the Alonzo hardfork, developers across the network have been working hard on test nets and have adhered to a defined roadmap with specific milestones in the form of “eras.”

The Ages of Cardano

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Cardano’s development roadmap is divided into: six main stages, or “eras,” each of which focused on expanding the functionality of the network.

  • Byron – Sets the Cardano foundation code. Allows users to use the ADA currency, named after the revolutionary programmer Ada Lovelace, and my ADA with their proof of commitment consensus algorithm

  • Shelley – Focuses on decentralizing the network by establishing incentives for users to host their own nodes. The main goal of this era is to ensure that the nodes, or individual computers, are managed by a diverse group of network participants rather than a small, centralized group of users

  • goguen – Introduces smart contract capabilities to the network allowing developers to create decentralized applications on top of Cardano

  • basho – Improves the underlying performance of the Cardano network to process and scale more transactions. This era also introduces side chains, which is a way to scale a network using multiple blockchains

  • Voltaire – Adds a voting and treasury system for self-sufficient governance. Users can use their money to influence the future development of the network

Cardano is now in the final stages of the Shelley era. This development phase added a host of new features to Cardano, such as a proof-of-stake protocol known as Ouroboros, an incentive and delegation scheme that rewards participants, and better hard wallet support.

By offering rewards to those who run full nodes — network participants who download the entire Cardano blockchain — Cardano encourages network participation and fuels the growth of the Cardano network.

Since its launch on July 29, 2020, Shelley has introduced two major hard forks: Allegra and Mary. Allegra has introduced a token lock mechanism that allows users to lock Cardano tokens in preparation for in-chain voting (expected to be rolled out in Voltaire, its final stage of development). Mary, on the other hand, introduced token support for Cardano’s Native Tokens (CNT). Similar to Ethereum’s ERC token standards, these native tokens allow users to create and deploy their own tokens on the Cardano blockchain, including non-fungible tokens (NFTs).

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Cardano works with its own “hard fork combiner” – a system that combines two different protocols (such as Byron and Shelley) on one ledger to ensure a smooth transition between phases. One problem Cardano developers saw with hard forks was that after a hard fork was agreed, there would still be a significant portion of the community that didn’t switch to the new version. That could be because they didn’t agree with changes or simply because they didn’t bother to upgrade. Either way, the combiner allows nodes to run multiple versions at once, meaning transitions are seamless and updates are frictionless. Essentially, the updates are not opt-in, but opt-out.

Alonzo stages

The Alonzo hard fork is split into three main color-coded stages.

  • Alonzo Blue

  • Alonzo White

  • Alonzo Purple

There are also two smaller phases after Alonzo Purple, called “Alonzo Red” and “Alonzo Black”. Each phase essentially adds more users to the testnet and identifies bugs that may need fixing.

Alonzo Blue introduced smart contracts with about 50 technical participants, mainly stake pool operators (SPOs). During this phase, invalidity errors and other simple fixes were found and modified. These default bugs are expected to appear and be fixed as Alonzo goes through testing.

Alonzo White adds more features and a wider range of participants to Alonzo Blue. The hundreds of new users will go through a kind of “practice bootcamp” that will test the network’s capabilities. This experiment is done by IOG; the main development company behind Cardano led by former Ethereum co-founder Charles Hoskinson. The company expects this phase to take about two to four weeks.

Alonzo Purple will be a fully public testnet and will add thousands of participants to the network. This particular phase is split into two distinct phases, “light purple” and “dark purple”. The former enables simple smart contracts, while the latter enables more complex smart contracts.

Then comes the final Alonzo Red/Alonzo Black color phases, which are reserved for final bug fixes/cleanup to prepare for the final hard fork release. Any future hard fork modifications will be very difficult to get past this point, which is why it is important that these two stages are looked at very carefully.

Staging adds quality assurance as it freezes the code and prepares exchanges for the Cardano hard fork. Alonzo Mainnet will officially launch the final code.

The Goguen era, named after the famous computer scientist Joseph Goguen, will enable the development of dapps on the Cardano network for the first time thanks to Alonzo’s new smart contract capabilities. Smart contracts are the essential components of dapps that allow them to operate without intermediaries. A smart contract building platform called The Plutus Platform is planned to be released during this phase and will allow both technical and non-technical users to build dapps.

What is Plutus?

Plutus uses the native programming language Cardano, Haskell. Plutus and Haskell use the same code base for off- and on-chain development. This means that the coding is identical at the core, so there are no complications with programming languages ​​when developing smart contracts. This makes Plutus contracts even easier and more testable, allowing developers to perfect their products for much more intensive tasks, such as hosting large institutions or governments.

hoskinson, who is now the CEO of IOG, explained Haskell was chosen because it is a code with a high degree of certainty (which can provide a higher degree of certainty that the code will work as intended).

In the blockchain sector, code often doesn’t quite match the developer’s intent and as a result, millions of dollars can be stolen or apps can go broken, like what happened when a Solidity smart contract didn’t come out in full. As a result, the project of the Decentralized Autonomous Organization (DAO) suffered a significant hack.

Haskell allows the intent to match the code better, as the language, while complex, is carefully designed.

Plutus Core

Then there’s Plutus Core, the programming language that connects smart contracts to the Cardano settlement layer: the Cardano blockchain. Once a developer is done creating their code with Plutus, it is compiled into Plutus Core, where the code is simplified for the Cardano blockchain. This method enables Cardano to handle the data better and take up less disk space on the actual blockchain.

For the less tech-savvy, there’s Marlowe, a new domain-specific language (DSL) that allows any user to create and test their own smart contracts without the need for advanced programming. Marlowe is built on top of Haskell and Plutus, but can be seen as building blocks for creating smart contracts.

With easier smart contract manufacturing and more development on Cardano, one can imagine the potential projects to be built. If you look at Ethereum, you can see hundreds of projects that can be re-deployed, iterated, and even enhanced on the Cardano network, including Uniswap, Aave, and many more. Projects that require faster transaction speeds will benefit greatly from the low transaction costs on Cardano. More than 65 projects have already been committed to co-release with Alonzo, including Synthesis, Miniswap, Stasis and CardWallet.

The rise of simpler dapp building will bring more projects. In his Africa Vision videoHoskinson said these projects will eventually compete with many real financial institutions and strive to replace them with fairer systems, granting economic freedom to those in need.

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