With just weeks to go before the completion of a major technological upgrade, Cardano (ADA -0.79%) experienced a highly public failure during the testing process. Social media went into full speculation mode, and within 24 hours, there were new reports of Cardano’s falling price. Depending on which sources you read, it might have seemed Cardano was going to implode after developers found a bug during testing.
But guess what? I’m buying Cardano because I still believe in the long-term vision of the crypto project and its track record of previous upgrades. This was simply a case of how fear, uncertainty and doubt (FUD) in the marketplace can absolutely wreck a crypto for no reason.
Cardano vs. FUD
After a storm broke out on Twitter, Cardano co-founder Charles Hoskinson felt compelled to upload a detailed, 24-minute YouTube video about what had gone wrong. He explained at great length how a relatively minor event — the uncovering of a bug during the testing process — could end up creating long-term damage to the Cardano blockchain project in terms of investor and developer perceptions.
Hoskinson spelled it out perfectly: This was the type of test failure that should have been handled internally within the Cardano community. As he pointed out, this was not some hack or malicious exploit. No funds were lost, no keys were stolen, and no nodes of the blockchain collapsed. It was simply a failure during the test process, something that can happen during any technological upgrade.
Yet a key Cardano developer used a popular podcast to share the story with the public. As a result, says Hoskinson, Cardano is facing long-term damage to its reputation. Once you let the genie out of the bottle, it’s hard to put it back in. Ultimately, for Cardano it could mean lower adoption rates and less commercial interest over the next few months. Brands that might have launched non-fungible token (NFT) projects on Cardano, for example, might now be less willing to do so. Hoskinson called this a “self-inflicted wound,” and he’s right. There was no need for this to happen.
Complicating matters is the fact that rival Ethereum (ETH 1.26%) is attempting a major technological upgrade (the Merge) of its own at the same time. So much attention has been garnered by Ethereum that Cardano developers — usually careful and very measured — may have rushed things in trying to nail this upgrade. And when things didn’t go as planned, developers might have panicked. And thus the story was born.
Track record of previous upgrades
One major point in Cardano’s favor is its track record of completing similar types of technological upgrades. While the current Vasil upgrade is more technologically challenging than the recent upgrades that brought innovations like smart contracts, it is still following the Cardano script for bringing complex new upgrades to market. Within the crypto industry, Cardano is well known for its peer-reviewed, academic approach to software upgrades. It is a slower process than many people like to embrace, but it has also turned Cardano into a reliable blockchain that is sustainable and inexpensive.
As a result, there is no need to panic over Cardano. Its software upgrade process is specifically designed to avoid all this alarmist developer talk. In this case, a Cardano developer stepped outside the normal channels and sensationalized a minor issue. Remember, blockchain development is decentralized, so there’s no headquarters that can act to contain all leaks or limit points of contact with the media.
If anything, this fiasco might be a buying opportunity. Cardano is trading near $0.46 these days, down from a high of almost $0.60 earlier this summer. I have faith in Cardano’s founder and the underlying development approach of the Cardano blockchain. Sure, the pace of development has been slower than desired, and every new setback seems like an eternity, but Cardano is still one of the best blockchain projects out there.