Cardano — A Third Generation Smart Contract Blockchain
Charles Hoskinson is the CEO of IOHK, an engineering company that undertakes cryptocurrency research, contributes development efforts to the Ethereum Classic ecosystem, and is spearheading the release of Cardano — a third generation blockchain protocol. He recently joined Epicenter for a broad discussion and a big picture outlook on on the blockchain ecosystem, governance and cryptography, and shared his views on what differentiates quality blockchain projects.
Cardano is a decentralised and fully open source public blockchain and cryptocurrency project that is based on a research-first driven approach and seeks to deliver more advanced features than any protocol previously developed. Charles Hoskinson considers Cardano Proof of Stake system with multiparty computation as one of the “third generation” blockchains, inasmuch as it followed the first generation and second generation protocols. The appearance of the first generation solutions — Bitcoin and other cryptocurrencies— convinced the wider public that every currency is, in fact, a collective and consensual delusion. The “second generation” solution emerged with Ethereum, which introduced the concept of a smart contract, more complex computation, and gave control of the subprotocols on the blockchain to developers.
“Third Generation” Blockchain
What the teams behind those “third generation” protocols are after is scaling blockchains to billions of users — which requires the development of various interoperability and scalability components, as well as taking care of governance through facilitating some sort of a democratic process. There’s going to be hundreds to thousands of cryptocurrencies in the long term, and as a consequence we need interoperability, the ability to move value and data, and preserve security and privacy as we traverse the Internet of Value — explains Charles. The team behind Cardano is focused on finding best solutions to those third generation blockchain problems, and intends to create a dialogue with other projects to come up with some universal standards to follow. The goal for this year is to figure out smart contracts and decentralization, while in 2019 the team will be dealing with performance and governance aspects of Cardano.
Figuring out Governance
When it comes to governance and building a voting system, Charles sees several challenging areas — first of all, figuring out who needs to decide while looking to avoid both the “mob rule” and the exclusionary ivory tower solutions, as well as the problem of rational ignorance — through which people deliberately choose to remain uninformed due to the cost of acquiring the information outweighing the potential benefits. The concept of liquid democracy — empowering voters to delegate votes to a trusted parties who have the knowledge and experience required to make well-informed decisions — is generally seen as a the path forward for improving governance. On the question whether voting should be private or transparent, Charles believes that anonymous voting is safer as it eliminates various attack vectors on the system. Solving governance issues requires as well investing in user education and community management work, as people need to understand the philosophy of the ecosystem before beginning to engage in it.
Advancing Proof of Stake Research
With projects such as Algorand or Thunder Token working on scaling blockchains, Charles predicts that we are entering an era of the academic Proof of Stake with increased research standards and rigor. The Cardano team is working on a new Proof of Stake algorithm called Ouroboros, with an initial focus on the theoretical aspects and the right security foundations. The first goal of the Ouroboros agenda is to introduce the Proof of Stake problem to the entire cryptographic community and to start a conversation on defining the PoS design space in general. The goal of the Ouroboros project is to separate fact from fiction, to federate the PoS problems we’re having as a community, to create a trusted commons which doesn’t have a financial incentive to pick winners and losers, and to foster intelligent discussions about tradeoffs, performance benchmarking and best practices — explains Charles. He believes that the output of this process will be a really good protocol for cryptocurrency, but every project in the space will benefit from the research carried out by Cardano.
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