Blockchain Insider Ep. 42. Santander Makes Ripples and Charles Hoskinson Shares His Vision of Cardano START OF AUDIO 00:00:00 SK: We are here, in the 11FS offices in WeWork Aldgate, in London, for Episode 42 of Blockchain Insider. I'm Sarah Kocianski, filling in for Simon, whilst he's away. So, today we are going to bring you, Santander rolls out blockchain-based money transfer service, Barclays commissions cryptocurrency trading desk, question, and an interview with Cardano's Charles Hoskinson. [Break] SK: I'm not alone today in the office, however. Blockchain Insider is happy to, once again, have Sara Feenan joining us. So, how are you today, Sara? SF: I'm very well, thank you, Sarah, thanks for having me back-, [Laughter] SK: Just-, this is-, this may get slightly confusing, we'll work this out as we go along-, [laughter]. SF: I think we have a similar accent, as well, so-, SK: And joining us from a remote location, a gentleman who does not have a similar accent, Colin G Platt. How are you doing, CGP? CP: I'm not even sure I have an accent at all, I don't know what you're talking about. SK: How are you doing over there? Near a field? Isn't that the joke? CP: I'm near a garden, and it's warm, but, you know-, I didn't know you were allowed to make the-, the field jokes. SK: Oh, I thought I had to make the field joke [laughter]. I thought it was a requirement. SF: It's mandatory. CP: Well, I will tell Simon. SK: Okay, cool. Let's kick things off. So, first story today is Santander rolling out a blockchain-based money transfer service with Ripple. Now, this has been rumoured about, and rumbled about, for months and months, and it's finally gone live for retail banking customers in Spain, the UK, Brazil and Poland. Customers in each country are going to get different payment options, so, customers in Spain can send pounds to the UK, and dollars to the US, customers in the UK will have different options. The title of this service is "Santander One Pay FX", which I think is particularly snappy. It uses a Ripple product called xCurrent, which is based on distributed ledgers, but it does not use XRP, am I correct, Colin? CP: That's what I understand. Yeah. So, as you said, this is a retail service. For some reason, they're using a distributed ledger underneath it. Santander runs all the nodes, from what I can tell on this, and controls all their customers, so I don't know why they can't do this just on their own internal servers, hey, but it's cool that they have something, so that people that want to send money between Poland and Brazil can do that cheaper, I guess. SF: Yeah, and it's good, on that note, to see a blockchain project going live, too. SK: Yeah, I mean, from my perspective, that's the interesting thing, is to see, you know, a big bank actually get something live, and out there, and yeah, I know it's limited customers, and yeah I know it's limited currencies, but, you know, the more we see stories like this, the more-, the more, sort of, confidence builds, I suppose. SF: Yeah, for sure, and it's a mobile-based application, it's been in the works for 18 months, so, good on them for getting it life. SK: Yeah, I mean, so often you hear these-, these announcements, and then [laughter] you never hear from them again. So, at least with this one we have heard from them again, I think that's the positive from this story, as far as I'm concerned. SF: Absolutely. SK: Okay, so, shall we move on to our second story, which is, Coinbase has just bought one of Bitcoin's best-funded startups. So, Coinbase has announced the acquisition of a company called Earn.com. Sara, can you give us a little bit more insight in to what this is about? SF: Yeah, sure. So, Earn.com is a monetised, two-sided social network, that individuals can join when they have a certain expertise, or role, such as Python developer. So, they build themselves a profile, and then, on the other side of that network, businesses can reach them in a list, and the ask is to complete a survey, or a task, and they get paid for it, basically. It's a monetary incentive to complete that task. So, from what I can gather, the businesses will pay in-, in US dollars, or fiat, at least, and they'll pay only when somebody replies, so, they won't pay for the reach, they'll pay for the replies, and then, those individuals get paid in BTC. And actually, Earn.com used to be called 21 Inc, and this is a pivot from their previous focus on Bitcoin mining hardware. I think this is an interesting business model, actually, the-, the monetisation of a two-sided social network, and it kind of, you know, puts the power back in individuals' hands, for them to actually earn some money from their data. SK: Yeah, I mean, it's not that unusual a model, to do this, you know, a lot of stay-at-home mums do this kind of thing, they earn money from filling in surveys, and from-, from completing, basically, administrative tasks for, like-, a lot of recruiters, you know, pay stay-at-home mums, to do this kind of administrative stuff. But, obviously, the two interesting things here are that-, both the pivot, the fact that they can be paid in bitcoin, and the size of this deal. Colin, do you want to give us a bit more on that? CP: Yeah, I thought-, I thought what was interesting, for two different reasons. First, Coinbase has been very, very conservative about which coins they list, inside their services. Earn 21, for a lack of a better way to do it, has been very loose on their standards, on which tokens and ICOs they do, and actually, one of their big services, as of late, moved away from this getting paid in Bitcoin, or-, or anything else, to do a service, to just, "We have your email address, we're going to drop you all these shitcoin tokens." I don't know how those two businesses work together, but it is a very large number, and some of the rumours that I'm hearing are they really just to get Balaji, who was also, at one point, I guess, in the final stages of working for the Trump administration, so, somebody with connections, I guess, to come on as their CTO? SK: Yeah, so he was the CEO of Earn.com, and he's become the CTO of Coinbase, is that right? CP: Exactly. Yeah. So, that's what I understand from him. What I thought was really interesting about this was that they raised $121 million, to fund 21, at the time, now Earn, and the rumour is, they've been bought for $100 million. So, that doesn't seem like a great return on investment, especially if they had just bought a bunch of Bitcoin at the time, as 21 would have suggested they were trying to do, in the beginning, and sat on that, they would have made a much better return than negative $20 million. SK: Yeah, I mean, I think it's one of those that kind of remains to be seen. It could be, sort of, an acqui-hire, as you said, you know, the idea was just to get hold of-, of Balaji, or there could be more at play here, and one that's probably definitely worth watching, to see how it manifests in Coinbase's strategy. SF: Yeah, for sure, and Earn actually did-, they launched a token, which is not an ICO, they emphatically add. It's meant to be used in return for labour, not in return for money, so I presume that Coinbase then won't be listing the Earn token on the Coinbase exchange. But, interestingly, 30% of that token has been kept for the employees and the founders. CP: I know there was a lot of speculation on this, as well, because Andreessen Horowitz is an early investor in both companies, and Balaji is somehow involved in the board of Andreessen Horowitz. Whether there's any-, anything more than just that, remains to be seen, but we'll see. Good luck to all of them. SK: Keep our eyes peeled on that one them. SF: Mm. Indeed. SK: So, the next one up, this is a story from CoinDesk, banking giant, SBI, one of their subsidiaries has joined the R3 blockchain consortium. So, the bank said it aims to join the financial group, to advance R3's Corda DLT platform, push cross-industry adoption of blockchain technology, and the statement they issued was, "We regard blockchains as the core of fintech innovation, and we are working on various measures, both in Japan, and abroad," SBI is a giant Japanese conglomerate. "Through this effort, we believe that we can contribute to the progress of the global blockchain field," the group stated. Some interesting ones to dig in to here, you know, the Japanese have been very active in the blockchain space, but interesting, given how close SBI is, or was, to Ripple? Or have I misunderstood that one? CP: I think that SBI was doing a lot of tests, with a lot of different companies, including Ripple, and they were involved, I think, at least at a very light level, with R3, previously, and this is something where they're really going in. What I thought was very interesting from this press release was that it wasn't just a financial services focus. Obviously, that's their background, they have a very good understanding of that, but there's also-, because they're a very large company, they can see where this fits in with a lot of other things, and I think it's very promising that they're trying to say, "How can we take our expertise, and also extend that out in to a variety of other industries?" So, big, big win for R3 here, and I think this is something that, again, I will be watching very closely. SF: Yeah, and back on the Ripple point, there was a story at the beginning of this year, that SBI and Ripple, formed together, a joint venture, I believe it was part of a consortium, SBI Ripple Asia, which, again is a, you know-, that points to Asia-, SK: It does, and it sounds like what SBI are doing is having lots of fingers in lots of pies. They, kind of, believe in the-, they believe in the underlying technology, they're not quite sure which way the want to go with it, so they're-, they're, kind of, investigating as many different options as possible, and, you know-, and as you say, it sounds like Asia's going to be one of the-, well, the first region to, sort of, get their act together on this. You know, certainly, Japan has-, has pushed regulation through that's made it easier for people to operate in this field, as well. SF: Yes, it's very interesting. CP: And that's one of the things that we've been talking to people about, as well, is some of these technologies will work very good-, uh, very well, in a particular use case, some of them won't work at all, in that particular use case, and working with, on one hand, the Ripple, they've also put out some things, previously, about their views on ICOs, and then, looking at how Corda can fit in is a pretty good strategy, and that's something that I-, I'm definitely interested in seeing companies, kind of, evolve towards, because, like every other technology, it's not one-size-fits-all. SF: Yes. Agreed. SK: Great. Well, speaking of R3, today's episode of Blockchain Insider is brought to you by Corda. Corda is an opensource blockchain platform that allows businesses to transact directly, in strict privacy. Using smart contracts, Corda enables complex transactions, using real assets, and legally binding agreements, without the need of a trusted intermediary. Corda is the result of a collaborative effort, led by R3, in collaboration with over 160 of the world's largest banks and technology partners. It is ready to build on today. The financial community is deploying Corda to manage their agreements, and to move assets globally. Now you can transform your business ecosystem with the platform selected by the world's largest institutions to build their future on, Corda. Go to Corda.net to learn more. CP: You didn't make any field jokes in it! SK: Uh, our next story [laughter] comes from the ICO Journal, and this is about Barclays potentially commissioning a cryptocurrency trading desk. The rumour is that Barclays has always started reaching out to hedge funds and institutional investors for this. Guys, what do we think about this? This is certainly not the first time we've heard rumours of big banks, sort of, moving in this field. What do we think? CP: From what I'm hearing, this is fact check equals true. They are moving forward on this, the ICO Journal had another article that came out, people I'm talking to are saying that this is actually going to be a thing, whether it's in two weeks from now, or a year from now, remains to be seen. Massively, massively, massively positive, if they go ahead with this. I know a few other banks have been looking at this, including Morgan Stanley, Goldman Sachs, at least from the rumour front, and I've heard of several other ones that are possibly doing it. Very simple reason. There is a lot of money to be made, if you're a bank doing trading on these things, because the spreads are huge, the market's very immature, there's a tonne of interest. Whether it's going to, you know, displace anything, at this stage, I don't know. I doubt it, but it could be a big revenue earner, and to me it's no surprise that banks want to move in to this, but there are still a lot of unknowns. And the people that we're talking to that are already doing broking inside this business are already doing key management custody solutions, they're starting to see interest from clients coming in, it's really only natural that banks are getting asked, and they're starting to move forward. I can't wait to see when JP Morgan gets a desk set up. [Laughter] SF: Yeah, I think this does follow on from the institutional expansion at the end of last year, with the listing of Bitcoin futures, and, like you say, Colin, there's massive returns to be had, so it's-, it's not really a surprise, but an initial red flag, I think, from my perspective, would be, given the size of the market, the propensity to swing it with large orders, not even necessarily trades. But equally, there's-, there's not really a standard way to value these kind of assets yet, in a portfolio, so it does leave the questions of what will this, you know, look like, in terms of valuing the portfolio? SK: Yeah, I mean, I think that, from my perspective, I completely-, you know, as somebody who knows quite a lot about banks, but not an awful lot about cryptocurrencies, I would say that, you know, the banks are going to go after anything they think can make them money, so the one-, the thing to be watching here is that, the banks are only going to do this if they think they can make revenue. Will other people be burnt off the back of it? SF: Yeah. SK: So, if the big bank opens a cryptocurrency desk, and it turns out that, you know, because of the things we've mentioned, the size, the volatility, the, you know, the difficulty in valuing those assets, people who go, "Oh, well Barclays is doing it, it must be fine," might lose out, or how Barclays structure those trades, or how they structure the fees, you know, I would-, I would have no idea how that would work, but that would be my concern with it, would be-, SF: Mm. SK: I mean, the banks may well think they can make money off it [laughter] but, you know, who else might be hurt, as a result of them doing that? SF: Yeah, exactly, and as-, we already can see leveraged trades in the cryptocurrency markets, too, so that does create a lot more volatility, and is arguably fine, for those that are able to absorb that, but, arguably not, for the-, the more retail, mom and pop traders, as we said. But then, a lot of the regulators, at the moment, are trying to protect those kind of retail consumers, or are looking towards heightened protection of that. So, interesting, very interesting. CP: I-, I have to imagine a lot of this is going to be done on an agency basis, meaning the banks aren't actually going to take the risk, they're just going to find a buyer and a seller, and move it across, and-, and give you a safe place to keep keys, if you need them. I think the downside in here for banks, aside from, you know, sometimes those things will fall apart, is they will be much more risk averse when they attack these things, for the reasons that you two have mentioned, compared with some of the brokers that have been doing this for a little while. And I know they're all laughing, saying, "We welcome this, because we'd love more places that we could shove our trades in to." SK: Yeah, I mean, I think-, I think, as we said, it's definitely the direction things are moving, again, another one that will be interesting to see. And it'll be interesting to see who gets there first, as well, because all those names you've mentioned today are absolutely doing something-, SF: Yes. SK: You know, they're exploring it, even if they're not putting it out there. CP: Especially JP Morgan. I'm sure Jamie Dimon's got tonnes of Bitcoin-, [Laughter] CP: I say that in jest, of course-, SK: Before we get in to any more trouble. Um, another-, another, sort of, story linked to Barclays here, but this is from CNBC, and this-, this headline is absolutely, I think you guys will probably agree with me, or hopefully agree with me, absolutely clickbait [laughter] but it says, "Like flu season, the infectious spread of Bitcoin could be over, says Barclays." SF: 100% clickbait. SK: Just-, just checking it wasn't just me, and my old, like, journo instincts coming out there. The quote here is brilliant. It says, "Like infection, transmission, especially to those with the fear of missing out, is by word of mouth, via blogs, news reports, and personal anecdotes. However, once full adoption is approached, the price decline is sustained and rapid. We believe the speculative froth phase of cryptocurrency investment, and perhaps peak prices, may have passed." So, I mean, the idea here is that it's the infected, or the 0.1% of the population, who first bought cryptocurrencies, and then another, sort of, 25% of the population was susceptible to the new asset, mostly, you know, fear of missing out, and, "Oh my god," and responding to those ads where it's like, "Make millions quick here!" on wherever it was-, SF: Yes. SK: I don't know. There's many questions here, I don't know if we-, how deep we want to go in to this, but Sara, did you have some thoughts? SF: Um, yeah, I mean, I 100% agree with you in clickbait, and, um, without meaning to, like you say, go too deep in to the rabbit hole, but I do think this is interesting, in the sense that it's taking inspiration from other industries, other than classical economics, and neoclassical economics, to value assets, sort of. And it's potentially an acknowledgement of a more open complex system, as opposed to your closed economical model from before, but again, I might be reading a bit too much in to that, and it's-, the headline is definitely clickbait [laughter]. But I would be interested to see a little bit more about their model, and, for example, where did they get the 20% of FOMO buyers-, 25%, sorry? I-, I've just-, I'd be interested to see a little bit more, so, if anyone from Barclays who was involved in that, please get in touch. SK: Yeah. Are 25% of the population susceptible to flu at any one time? Is it-, SF: I don't know, and why do we model exactly flu with cryptocurrency? I just-, I'd be interested to know how that analogy came about-, SK: Yeah [laughter]. SF: Although the spread of infection and, uh, you know, FOMO, might be-, there might be something in that. SK: Yeah. Yeah, I-, I buy the-, the premise, as it were-, SF: Yeah. SK: Colin, thoughts on flu and bitcoin? CP: Oh, I-, I think it's interesting that Barclays came out with this, right before the rumour dumped about them getting involved. So, maybe-, are they FOMOing in to this thing? That's my-, my read across [laughter]. I-, I have no idea whether it actually makes sense, I think it's hilarious, but I'm sure, at some point, people were saying, "Yes, this dotcom thing is like a flu infection. You'll get over it." We'll see. SK: We'll see. And they have said that peak prices may have passed so-, SF: Just-, just so long as nobody dies, it'll all be fine. SK: Indeed, get your shots, people. SF: [Laughter]. SK: Oh, god, no, that's a whole other rabbit hole. So, moving us on to our next story, from CoinDesk. So, Malta is proposing a test to define when an ICO is a security. This is off the back of a consultation paper published last week, the Malta Financial Services Authority is currently seeking public feedback, and basically, the summary of the paper is that it's basically designed a three-stage process that will test whether-, what category, if you like, tokens will fall in to. It is quite clear that what Malta actually wants here is to build a name for itself as a blockchain hub, or a cryptocurrency hub. I mean, I-, I find, whenever regulators come out with these things, sort of, on the one hand, I'm like, "Oh, that's good, there's some clarity there, we need some clarity in, you know, cryptocurrency regulation." On the other hand, I'm like, "Well, are you trying to force a square-shaped peg in to a round-shaped hole? So, you know, Sara, as somebody who has more insight in to this than me, what are your thoughts? SF: Yeah, I mean, there's a few different streams going on, looking at defining what a crypto asset is, and what category it falls in to, especially from a regulatory oversight perspective. My concern would be, they all come up with different ideas, and in a, kind of, global industry, and global market, such as this, that adds an extra layer of complexity. So, it would have been nice if everyone could work together, and I know, recently, there was the G20, and everyone else, kind of, came out and-, and checked, to use a poker term, around the table, saying they're not going to regulate it, but it would have been nice to see, coming from that, a G20 taskforce, as it were, or working group, or something, to-, to try and hammer out some of these definitions, across the board. CP: One thing that's really interesting about Malta, in financial regulations, in general, outside of all of our, kind of, blockchain stuff, they constantly are the first ones, whenever a new EU regulation comes out, to actually, kind of, sweep that in to their law, which sounds really weird, but that gives everybody this automatic, "Oh right, we know we're complying with the law, because Malta's done it, and we're set up in Malta." This might just be kind of a-, an extension of that, to say, "Look, if we've got ICO rules, you want to do ICOs, come here." The fact that they've got Binance, and OKEx just-, just announced they were moving down there, means you've got a safe little harbour in Europe that you can set these things up, if it fits in to the rule. I think the question still remains, given the global nature of all of these things-, it's great if your ICO token is not a security in Malta, but if you're selling to American investors or Chinese investors, it doesn't really cut it. So, interesting to watch, it will be interesting to-, as you said, how these things all align. SK: Yeah, I mean, from my perspective, you know, what I know about Malta is exactly what you said. That they set themselves up, quite a while ago, as a hub for online finance, you know, they set themselves up as the hub for online betting, and handling all the payments and online gambling that went through Europe, and they've made a huge-, and for a tiny little island that's mostly British expats [laughter], they've made a huge-, a huge industry out of that. So, I wouldn't be surprised-, if anybody can do it, they can. I mean, our very own Simon is obviously involved in the Global Digital Finance project, which is designed to, kind of, hammer out some of these things, on a global level, but obviously that is never going to be an easy-, an easy task, and, in the meantime, places like Malta are going to, as Colin says, move-, move fast, and get in there first, and-, and attract as much business as they can. CP: All those British expats on the islands around the world. SK: [Laughter]. And our final story today is from PR Newswire. It says, "Harbor Raises $28M to Reengineer Private Securities for Blockchains." I'm going to throw that straight over to Colin. Colin, what on earth does that mean? CP: Yeah, I mean, it means nothing. SK: Well, that's reassuring, that it wasn't just me [laughter]. CP: Diving in to it, Harbor just raised $28 million, great for them, from Andreessen Horowitz, apparently they've got money, and they want to spend it now, now that they're getting their money back from Earn. What they're trying to do is basically, inside of the public Ethereum blockchain, which has got Ether as coins, and all these ICOs floating around, says, "We want to build a framework that only allows you to transfer your cool new ICO tokens in a regulated way," which means a regulator is actually sitting in and saying, "Yes, you can move these things." It's a nice idea, in theory. Um. $28 million is a lot of money for, like, what's already developed on GitHub, to do that, and the big problem is going to be getting regulators to buy in. Maybe they'll have some luck with Malta, but again, it goes back to, if, really, you just end up with an ICO token that can't move at all, because the regulators you care about aren't going to sign off on it, it's hard to imagine what they're going to do to, kind of, get past that point. Again, I wish them all the luck in the world, they're trying to go beyond just normal assets, normal securities, and things like that, and get in to real estate, things like REITs. Again, I've got lots of questions on how real-world assets fit in to a, especially public, blockchain idea, because what happens if you lose your key? Does that mean you're not allowed to own your land anymore? It remains unclear to me, and if you just say, "Well, we'll just go back and issue a new token," what's the point of having a blockchain in the first place? SK: Interesting, another one to, sort of, keep an eye on. Headline-grabbing, but, again, we need a little bit more depth before, perhaps, we can explore it properly. Do you have anything you want to add on that, Sara? SF: Looking through this, they have launched a regulated token, or R-Token, standard, which is a system of ERC-20 smart contracts, built on, as Colin said, the public Ethereum blockchain. So it's-, yeah, it's compatible with all of the existing Ethereum ecosystem, but getting regulators on board with the token I think is difficult right now, until we get past the stage we just talked about, with, you know, definitions, and taxonomies, and-, and where that leaves this, in some cases, new type of security altogether. CP: Let's also keep in mind that, like, Crypto Kitties crippled the public Ethereum network, and if you really start moving high-value financial activities on to this, in any meaningful way, you're going to cripple it again. And I know the Ethereum Foundation, and Ethereum developers, are doing a tonne to work around that, but we don't have a timeline on that, and putting it on a public network, for anything that is, like, how you own your own house, seems risky, at this point. SF: Yeah. I mean, it's one thing to have $100 in a new token, or a cryptocurrency. Having your-, your home, or your legal documents, or your will, you know, that's another one we've talked about today, on the blockchain, is a whole other kettle of fish. SK: Yes, entirely. I think getting the retail market, even the housing market, to agree to something like that, where, as you say, Colin, if you lose your private keys, do you lose your real-life keys, as well? Who knows. So, stories we didn't have time to cover today, a story from Bloomberg, which was titled, "Yes, these chickens are on the blockchain." CNBC, "Why this guy paid $75 to store Bitcoin under his skin." Business Insider, "This cryptocurrency startup with a 12-year-old CEO is trying to solve a common frustration among gamers," oh man, I have to read that one afterwards [laughter]-, SF: Real-world problems. SK: And, finally, one from CoinDesk, on IOTA, the $3.7 billion crypto that developers love to hate. And now, for our Tweet of the Week. [Tweet of the Week jingle] SK: So, this week's Tweet of the Week comes from Aaron van Wirdum, apologies if I've pronounced that wrong, @AaronvanW, and it reads, "The first electronic cash system wasn't Bitcoin. It was Ecash, by Chaum. This-," he makes a reference there, and links to a 1994 Wired piece by Steven Levy, which, "makes it abundantly clear that 'cash' referred to privacy & anonymity. Cost of transacting, speed and ease of use were afterthoughts, at best." Colin, do you have any thoughts on this one? Starting with what's Ecash? [Laughter]. CP: I have lots of thoughts on this one. So, David was in-, was in Seoul, and we caught up, he gave a really good presentation about this, a couple of weeks ago. Aaron's trying to make a point about the divide between Bitcoin and Bitcoin Cash, in this tweet. One of the things that the Bitcoin Cash community is pushing is, Bitcoin, at the beginning, was fast, reliable, cheap. Now, Bitcoin is going down this road of this store of value, and the-, the Bitcoin Cash community is claiming that it's not that, and they're linking this all back in to David Chaum. I'm not sure they quite caught all of it, but it is a really interesting thing to look at, at how David Chaum, who some people have speculated was one of the originating ideas, with Ecash, of what ultimately became Bitcoin, in Satoshi Nakamoto's white paper. Uh, it was cool, apparently they just had, like, these stamps, and you had, like, a little piece of software, and you could send money around, and then you could redeem it at banks, and it was all (? 25.22), so, quite a cool idea, and it looked fairly easy to use, and certainly a lot better than a lot of the ICO stuff I've seen. SK: Interesting. Okay. So, before we leave you today, Colin spoke to Charles Hoskinson on the future of Cardano. [Break] CP: I'm here with Charles Hoskinson, the CEO of IOHK, which is a company that is a contributing core developer to the Cardano blockchain and cryptocurrency. Thanks for coming on today, Charles. CH: Pleasure to be on here, thank you for having me. CP: So, there's lots of things that you've been working on, you have a very long history in cryptocurrencies, blockchains. I'm very excited to be able to talk to you about the projects you've been working on lately, which include Cardano, as well as a few others that kind of came in before the launch of Cardano. Before we get started on that, could you just tell our listeners who haven't heard of you yet a bit about who you are, and what you guys do? CH: So, IOHK is a research and development company. We're kind of a unique firm in the cryptocurrency space, where we-, we work on multiple cryptocurrencies, and we do everything from the peer reviewed science side, where we actually write papers that go through the academic process at universities and conferences and journals, and we go all the way to the engineering side, and we focus on a very particular type of engineering, which is called high assurance software development. So, it's commonly seen in places like NASA, or the aerospace industry, or the health industry, where, you know, the failure of a software either results in the loss of billions of dollars' worth of a product, or human life, or both. So, we tend to borrow some of those software techniques, and we've been systematically bringing them in to the cryptocurrency space, so we can write cryptocurrency protocols in a fundamentally different way, so that they're more reliable. CP: Maybe, kind of, for our less technical viewers, can you explain a little bit about how that particular process works? Maybe how that's different from what we've seen, in the development of things like Bitcoin, or Ether? CH: Yeah, so, generally speaking, when you write a protocol like Bitcoin, or BitTorrent, usually how that ends up happening is you-, you have a single developer, or a small group of developers, and they have a really good idea, and they don't really have a formal protocol, or specification. Instead, they just say, "Well, let's go experiment," and they iterate, and iterate, and iterate, and then they release it as a beta test, and people begin adopting it, and then they iterate and iterate, and they follow that process. And, for the most part, most software is written that way, especially software out of startups. So, if you're in Silicon Valley, and you're following an agile process, that's generally where you go, and the goal is just to get it in front of the customer, as quickly as possible, and there's kind of a back and forth relationship. The problem with that type of software development is, you presuppose that you're going to make a lot of bugs and problems upfront, and that's okay, because you're always one or two patches away, to somehow resolve those things. But the issue with cryptocurrencies is that, if you make a mistake, that mistake may be permanent. There's already problems and flaws in the Bitcoin core protocol, like a multisig issue, and other things like that, which, to this day, have not been resolved, because they would either require a soft fork, or a hard fork, or it's just too difficult to get consensus around it. And even the parameters, like, for example, the block size, is really hard. So, when you live in a cryptocurrency, or a protocol-centred world, if you make a mistake, the consequences of the mistake are very dire. So, what you do, to ameliorate this, is you start with what's known as a specification. So, what a specification is, it's basically a-, like, a mathematical description of what you want to accomplish, and that can be everything-, let's say you're writing a PGP client, there's an RFC for PGP, and the idea is that that specification is implementation-independent. So, it's not written in code, rather it's written in math, and language, and any engineer should be able to read that, and develop an implementation, based on that, and it's as least ambiguous as possible. The holy grail would be to say that two independent engineering teams take your reference spec, they implement it in a clean room, they never talk to each other, they turn them on, and then, somehow, they're able to-, their implementations are able to talk to each other. For the PGP case, that would be, you send me an encrypted email, I'm able to decrypt it, I send you an encrypted email, you're able to decrypt it, but we never actually talk to each other. So, that's what specification-driven engineering is all about, and there's various levels of assurance that you can put behind it. If anything, just writing a spec helps you really clearly understand what you want to do, but then you can even take it a step further, where you can generate a computer proof, it's called a bisimulation proof, that allows you to actually verify that your software matches the specification, meaning for every input in to the spec, the output matches the output that you would expect from the implementation that you've created. That's really hard to do, it takes a long time, and a lot of effort. CP: So, not only happening inside the client level, to ensure that, when I do X, on top of your blockchain that's been developed this way-, but I'm curious on-, on how this would work on the things that are actually implemented. So, let's say I-, I decide I'm going to develop something on top of Cardano. Can-, is this native, inside of how the blockchain is actually set up, that would enforce me, if I wanted to set something up, so that I don't have a-, a DAO-type situation? CH: So, blockchain is an aggregation of many protocols, and so you have a consensus protocol, you have a transaction language, or, you know, execution semantics, you have a network protocol, and that's kind of like level zero, that's the basement, that's the foundation that you live on. And then, for Ethereum, onward, we-, we made blockchains programmable, and so the idea there would say, "Okay, I'm going to give you, the developer, a programming language, and you're going to be able to write your own transactions, your own smart contracts. So, in that particular case, the verification that we do at the basement doesn't really do much for you there. It assures you that the basement that you're building on is a strong foundation, and it's designed correctly, but if you make a mistake in your code, there's nothing I can do, on my end, to-, to, you know, prevent that. Rather, what I can do is give you better tools, and I can give you better techniques, and methodologies, and languages to develop in, to reduce the likeliness of mistakes, but that's like saying-, well, you know, Microsoft can build a really secure version of Windows, but you, as the Windows application developer, can still make a mistake with your app, and deliver a poor user experience. So, Microsoft can certainly do things to try to prevent you, as a developer, to, you know, write a crummy app, but, at the end of the day, the ultimate power is in the hands of the developer. So, for that, we actually are working very closely with Runtime Verification, it's a specialised firm, in Urbana-Champaign, in Illinois, and they specialise in things like programming language design, and verified compilation, and-, and VMs, and so forth, and they're actually working with us to build a really nice virtual machine called IELE, and specialised toolings, that we can deliver to developers, to reduce the probability that they're going to have bugs, but that's a bit different than formal verifications. CP: And that's some-, some very interesting points in there. So, it's not only that you've built a better product, you're also partnering, but, at the end of the day, it's still the person doing the development that has to go through those extra steps, and make sure-, CH: Right, and they might not want to. For example, let's say your goal is to build a rapid prototype, and you've built in to your contract the ability to update it. It's okay to then make mistakes. One of the issues with the DAO was that, once it was set, they couldn't change it. But if they had built an escape patch, to update the contract, they could have easily corrected a bug, or a problem. They probably didn't want to do that for legal reasons, instead of technological reasons. And so, you know, it just depends on what is the software you're actually deploying, who are your customers, and what are their expectations, and, in some cases, you really do need the immutability, and unchangeability, that a blockchain can provide you, and in other cases, you actually need to upgrade and mutate the software. So, not everything needs to be high assurance, but certainly the thing that does need to be is the foundation you stand on. You'd like to know, if you're investing millions of dollars of development effort in to using a platform, that that platform is correctly designed, and it's-, and it's bug-free. CP: So, let's get straight in it that point. On the platform. Tell me a bit about, what is Cardano, what are the specific problems you're trying to solve, that can't be solved by things like Ethereum, or by Bitcoin, which are very different. What is the problem you're trying to solve, and why did you decide to solve it the way you've done? CH: So, we look at Cardano as, kind of, the first third-generation cryptocurrency, or the most complete third-generation cryptocurrency attempt. So, if you look at Bitcoin, we consider that first-generation, and Ethereum, we consider it second. They were really trying to solve different problems. Bitcoin was trying to solve less of a payment and scarcity problem, more of a social problem. It was trying to create a notion that somehow Bitcoin could be valuable. It was, you know, this collective delusion that, you know, Bitcoin actually is worth something, you can trade it on exchanges, buy stuff with it. That was the major hurdle it had to overcome. But the minute that that set in, then people said, "Well, it's not very useful. I can't really do much with it, it's just, kind of, a push payment system. I'd really like to have programmability." So, what Ethereum introduced was this idea of the smart contract, and saying, "Okay, now you can have arbitrarily complex transactions, and persistent programmes that live on a blockchain, and let's go see what experiments we could run with that." Well, just like bitcoin, Ethereum has been very successful, and, as a result, people are starting to have opinions about what they'd actually like to do. And what they've found is, Ethereum doesn't scale. So, there are really three design considerations that we think the third-generation encompasses. One is scalability, where, as we move from thousands, to millions, to billions of users, we need systems that behave like BitTorrent, where, as users join, you gain more resources. And, currently, no cryptocurrency protocol is really designed that way, holistically. Second, there's going to be a lot of cryptocurrencies, like thousands of them, and there's legacy systems, like credit cards and bank accounts. And so you really need interoperability, because the reality is, even if there is a consolidation, there's not going to be a consolidation to one standard. There's probably still going to be hundreds of cryptocurrencies. So, it's really important to talk about the internet of blockchains, including standards, and bespoke primitives within a protocol, to make it really easy to move value and information between your protocol and other protocols. And then, finally, there's a, kind of a meta problem, that we've seen with Ethereum Classic, and Bitcoin Cash, and these other protocols, in that there's a governance concern, and the governance concern is that, you know, you-, it's not innately clear how we decide how to change and evolve these protocols, and also there's a treasury concern, in that it's not innately clear where we're going to source money, to update and control these protocols, outside of the ICO, and the ICO tends to introduce a great degree of centralisation, but that's a finite event. So, there's this thing called the golden rule, uh, he who has the gold, makes the rules, and that's-, that's a big issue right now, in the cryptocurrency space, and it's a sustainability problem. So, if you look at Ethereum and Bitcoin, they're great protocols, they certainly accomplished the missions that they originally set out to do, but now everybody, EOS, IOTA, Hashgraph, AEON, Ripple, and even Ethereum itself, are racing towards upgrading themselves to this third-generation, where we have true scalability, we have interoperability with many different systems, that's easy and cheap, and that we have some form of a governance system, to decide who pays, and who gets to decide the vision and the progress. The other thing is that you'll-, you'll notice that there's kind of a bifurcation amongst ledgers. There's a permissioned, private ledger, and then there's this permissionless, open ledger, and we tend to consider them to be very different things. So, when we say, "Hey, there's Hyperledger and then there's Ethereum," they feel like they're really different, even though they have very common DNA, and the only difference is who controls at the top level. So, the last part of what you're exploring is, can we blur the lines between the private permissioned ledger, and the permissionless ledger, and actually allow you to deploy an enterprise infrastructure that easily can talk to a permissionless ledger, like Ethereum or Cardano, for example, so that you can move value between those two systems. Just a very quick example of where that would be really useful is, let's say you're running an exchange. Right now, running-, let's say it's Bitstamp, if I send you Bitcoin, it goes from one address on the Bitcoin network to another, and the network doesn't know you're an exchange, and doesn't give you any special protection. So, if you get hacked, you're at the same mercy as anybody else. But what if you could send your Bitcoin to a sidechain, and that sidechain was actually controlled by the exchange, and they have a lot more logic in there, like the ability to reverse transactions, and so forth, that they can put in for consumer protections, and to protect you against hacks, and so forth? You're already trusting the exchange with your private keys, you're already trusting them to hold your money, so you're not really losing any privacy or control, you've already surrendered that, you're just now gaining consumer safety from that. So, it would be really nice to explore, like, where those boundaries are, and how can we make it easy for an exchange to do something like that, and still be able to talk to a major network. So, that's really Cardano project in a nutshell. It's a continuation of what's come before, and it's a recognising that there are some real problems, in terms of scalability, interoperability and sustainability. These are really big problems, and they're going to require a lot of new protocols, and a lot of new code, and a lot of new solutions, and it would be really hard to iterate an existing currency, like Bitcoin or Ethereum, in a reasonable amount of time, to get there, because there's so much value at risk already, there's hundreds of billions of dollars in play there. So, it makes a lot more sense to experiment with a smaller, more bespoke project, but if we get it right, I think we have a chance to actually become just as large as Bitcoin or Ethereum, perhaps even larger. CP: And those are some really, as you said, very important problems that are-, that exist out there, in the current existing solutions, that you guys are really tackling. And one thing that I really want to hit on, and-, and something that I was following, a while ago, on-, on Twitter, was, there was another-, another large, I don't know if I'd call it third-generation project, but a specific blockchain project called IOTA. There were some researchers and academics looking at this, which-, and the reason I bring this up is because you're kind of the first project that I've seen really align yourself with the academics. The other ones have just, kind of, had them around, but they've just, almost, kind of, come in. IOTA has kind of taken a different thing, somebody's pointed out, maybe, some flaws, some problems in it, um, and they pushed back very hard on it, um, and I really liked a response where IOTA, the Foundation, and some of the people behind it, were saying, you know, "We might actually take legal action against the way these researchers have put it in," and you were actually supporting them, and saying, you know, "We stand behind you." I thought that was a really good way to do it, but maybe you could talk a bit more about the importance of independent academics inside of these things, that aren't necessarily just in the Foundation. CH: Yeah, just to clarify, I-, I took the-, I took the following position. So, I don't-, I've never taken a position of whether the audit that was done by the DCI was right or wrong. I-, I could-, frankly, couldn't care less about it. It's-, it's more of about proper conduct. So, the reality is that infosec audits, cryptographic audits, these are a fact of life for any product that makes assertions about security and quality, and auditors, there's-, there's a delicate relationship between the auditor and the software developer, in that it's-, you know, the auditor's basically exposing all of your sins, and your poor decisions, to the general public. But in that, there's this notion of fair disclosure, so, the auditor has a moral obligation, an ethical obligation, to-, to inform the developers, or the project managers, prior to a public disclosure, what they've found, uh, and then there's usually a negotiation of what is the best way of releasing this information, and the timeframe to release this information. It's not, "Can we bury it, and hide it, and pretend like it doesn't exist," it's more of a, you know, "Can we release it next month, so I have time to prepare a patch, so that hackers can't take advantage of this potential vector." The challenge that I had with IOTA is that, instead of following the normal process, and, by the way, we've been audited, as well, Kudelski Security, for example, did an audit report of Mantis, and found bugs, and we fixed them. Instead of following the normal process, of going back and forth, and saying, "Okay, this is how we're going to fix it," they just basically said, "Everything you've found is not real," or, "It's all theoretical, and there's no example, and you shouldn't release any of this," and then the auditors said, "Well, we're auditors, we're going to release it," and they said, "Well then-," you know, "Don't," and then they broke off communication, and then the auditors released some stuff, then IOTA personally attacked them, and said that they're biased, or they have a conflict of interest, and they're horrible human beings, and then some people even threatened potential legal action. Now, I felt, as a member of this space, regardless of what your opinion is, of whether IOTA is great or wrong, that is going to damage the relationship with infosec experts, and cryptographers, in cryptocurrency projects. So, now, moving forward, people who would normally work with me, or Vitalik, or Dan, or any other project, would now say, "Well, maybe I don't want to do an audit of Cardano, because if I do, and I find something, I'll get sued." So, I feel that they created an existential problem, in that relationship that we rely upon, to actually verify that what we've done is-, is correct. So, what I said is, "I'm not going to take a position, but if you guys sue the DCI, I will offer to pay their legal fees," if anything, just to-, to provide some level of assurance to infosec experts that they're-, they're covered, and that the cryptocurrency space isn't going to harshly punish them for commercial reasons, rather than academic reasons. But then, to a broader point, I think we have a systemic crisis in the cryptocurrency space, about verification of claims. The reality is, there's a lot of tech, and there's a lot of scientists now, and people with PhDs from good universities, writing lots of math on paper, and normal investors, and normal people, and VCs, they really can't make heads or tails of it. They say, "Okay, I hear on limited scalability, and DAG this, and there's some quantum cryptography here, and-, and there's lots of crazy ass symbols on the paper, I can't read this." So, what ends up happening is, we tend to create cults of personality around people, where we say, "Ah, well, I trust Vitalik, or Charles, or Dan, and I really think they're very bright, and I'm just going to go believe that person," when, in reality, that's the most dangerous thing you can do. The smarter a person is, the easier it is for that person to deceive you, and deceive themselves. The canonical example is Kurt Gödel. This is a guy who literally broke math. He proved that mathematics is incomplete, and it can never be made complete. It's got a hole in it, and you can't fill it, because of the way math is constructed. He was one of the most brilliant logicians in human history, a very rational, super logical guy, very reasonable person, who, by the way, died, starving to death, believing that people, communist agents, were poisoning his food. He was a paranoid schizophrenic. So, this is a guy that, like, on one hand, is so logical that he can undo the laws of mathematics, but then, on the other hand, he's like the homeless guy on the streets in San Francisco, thinking government agents are poisoning him. So, just because you're really smart and really talented, doesn't mean you're not above self-deception, or you're not above the ability to-, to deceive others. So, what we tend to follow, at the Cardano project is the "trust but verify" approach, where we say, "If I'm going to make a scientific claim, great, I have an obligation to take it to people who know what they're doing, who have no stake in the game, and have those people either tell me I'm crap, or tell me that I've done something reasonable, and usually, it's somewhere in between. Now, it turns out, for 400 years, we've been, as a community, developing this thing called peer review. It's given us all the science we have today, and the reason why my laptop works, and the reason why your video camera works, is because of that project. So, that process is pretty good. It has its flaws, but, in the computer science world, it's actually very responsive, it's pretty fast, and it's not subject to the biases you'd see in things like gender studies, or, you know, philosophy, and so forth. It's generally a very objective process. So, what we do is, we write scientific papers, and we submit them IACR conferences, it stands for the International Association of Cryptologic Researchers, there's four, five major conferences a year we tend to submit, they're spaced about every three months, and a lot of these conferences accept only about 20% of the papers that are submitted there. It's very harsh, and very rigorous. And these are papers submitted amongst people at major universities, like Cornell, and Harvard, and MIT, and so forth. And just because you get accepted actually doesn't mean the paper's okay, you still have to show up, and defend the paper, and then, it actually creates an incentive for other researchers to find a flaw in your system, because, if they do, they can publish a paper about it, and they get academic credit for it, and they can then break it. So, it means that I now collectively get access to the broader cryptographic community, in many cases, people that you could never hire. For example, Adi Shamir, he's got a Turing Prize, that's the Nobel Prize in Computer Science, and, more importantly, he's filthy rich. There's no way you can go to Adi and say, "Hey, can you come work on my project?" If he doesn't want to do it, he doesn't want to do. But he still shows up to the conferences. For example, I'm going to be on a panel with him next week at CTRSA, and if you're engaging him in that way, he will actually take you seriously, read your paper, and give you feedback and advice. That's literally a person no one can hire. Microsoft can't hire him, Google can't hire him, I can't hire him, but using this process, I give him an incentive to actually try to think about my problem, and tell me what's wrong with it, and so forth. So, for example, one of our paper, Ouroboros, we published in 2016, since we published it, it's already been cited over 50 times, and seven papers have been written about it, including one charting scheme, called OmniLedger. Now, we didn't pay for any of that. It just came, naturally, out of the academic process, and we've learned a lot from that process. So, I think this is great for the investor, and for the regular cryptocurrency person, because it says there's an objective milestone, that's independent of the project, verifying the claims that are being made are correct, and it's very rigorous, because four out of five papers are rejected, so being accepted does mean something. And second, it's good for the project, in general, because it gives you the ability to talk to a different group of people you can't hire, and that group of people are generally some of the smartest people in the world. Now, it's not the only thing, it doesn't guarantee your results are going to be practical, or that you can implement them properly, you have to use different things, and be a bit pragmatic, for that, so there's certainly an engineering side of it, but I think it's a brick in the wall that you have to build, to be able to build a proper protocol. CP: And I think that's a-, that's a very good way to look at it, and-, and it's a very positive sign, to me, that you've taken that very mature, educated, well-rounded approach, rather than just trying to--, to push up the value, and turning down things, as we've seen-, as we've pointed out other projects have done. So, for the people listening, what-, what should we be looking out for? What are the-, I hesitate to use the word "milestones", but what are the-, what are the big things, in the next three, six, twelve months, and things that you'll be happy to see the Cardano project and community take on? CH: Yeah, that's a great question. So, we're really, really focused on moving from Byron to Shelley. So, Byron was the initial release, so it's a full mainnet, we're running Ouroboros, we're running a proof of stake protocol, but, by design, it's kind of set up like Ripple, because we didn't want to just invent a new protocol out of thin air, and, you know, watch it, and say, day one, "Here you go, guys, good luck, have fun, hope it works." We-, we wanted to, kind of, release it in milestones and stages, and learn as we go, and also, because it's a totally new architecture, a new platform, it was-, to be responsible, you need to have some checks and balances, and some recall points, and so forth, just in case you make a mistake. So, what we're doing now is transferring the network over to the general public, in a very systematic way, so, Shelley is all about that, the peer to peer networking, we're running Ouroboros with stake pools, and delegation, turning on block rewards, these types of things. So, at that point, the network will be on par with Bitcoin. Much better, but it's-, it's basically a system like that. The other thing is that Cardano's being built in layers, and so we've separated accounting from computation. So, if you look at Bitcoin and Rootstock, that's the closest analogy, where Bitcoin's kind of simplistic, and you can't do much with the transactions, but if Rootstock works, you'll be able to send Bitcoin to that sidechain, and then there you get smart contracts. Now, why do you want to do that? Because then you can support multiple computational models. You could have Ethereum-style smart contracts, or NEO-style smart contracts, or maybe even a permissioned, private domain, where they run on servers, instead of a network. Then you can go back and forth between that, and some can be regulated, others can be unregulated, and so forth. So, you have a lot more flexibility. Second, computation is a higher liability, and more complicated endeavour. You know, just because Bitcoin, you're kind of indemnified for being a miner, doesn't mean being a miner in an Ethereum-style system indemnifies you from legal responsibility. For example, if you look at Tor Exit Nodes, more than one operator has been arrested for trafficking child pornography. Or BitTorrent operators, more than one person has run in to legal hot water for filesharing intellectual property. So, in that case, it's a really good idea to segregate your networks, and so you can kind of decide where your liability wants to live, and have a Bitcoin-like, low liability experience for accounting, and then increasingly higher liability for computation, depending upon domain. So, we're going to be turning on the testnet soon, for smart contracts, in a separate layer, and then we'll be linking that, eventually, this year, hopefully, with the main network. So, our hope is to kind of catch up with Ethereum and Bitcoin, in terms of features and capabilities, but one of the biggest milestones for us is the specification-driven development. I'll send you a spec after the-, the show ends, to give you a sense of what they look like, but basically, every part of our system is eventually going to be covered by a formal specification. So, we have this really math-y thing for what a wallet should do, and a really math-y thing for how our core protocol is going to work, and so forth, and that basically means that we now have, instead of an implementation, we actually have a math representation of the design of the system. So, anybody can take that, and build a reference implementation from it, and it also gives us something to talk around, for the improvement proposal. So, that's a major milestone for us, how do we write good specs, how do we get people to understand specs, we're probably, for example, for the wallet spec, going to do a series of YouTube lectures on it, to annotate it, and then, from there, how do we actually create an improvement proposal process, based on specifications? Then, in 2019, we're going to start turning on the scaling features, so we're going to have sharding, and the democracy features of the system. So, we have blockchain-based voting, and other things, so kind of like what Tezos is talking about, but we have our own system that we're developing, out of Lancaster, using liquid democracy, and that'll allow the system to start becoming scalable, and also more sustainable. Over time, we're also going to be turning on a lot of our sidechains capability. So, we have a paper coming out, we're submitting around May 8th, which is a really beautiful formal model for sidechains, and I think we actually have the first formal rigorous security proofs for these things, out of any project, and they work on both proof of stake and proof of work systems, but basically, long and short is, we're trying to create our own version of interoperability, and so, over time, we're going to be dragging more and more of that in to our system, and then we're going to look at market standards, like what Interledger is doing with the committee at WCCC for Ripple, and then things like AEON's Interoperability Protocol, and so forth, and our hope is to drag, potentially, some of those things in to our ledger, throughout 2018 and 2019, so that we can talk to as many blockchains as possible, and listen to them, and receive transactions, and send transactions to them, and so forth. Another big milestone is asset issuance, so we have this workstream called Chimeric Assets, where we wanted to take the ERC-20 standard, and extend it, and start talking about all different kinds of asset classes. So, for example, ERC-20's kind of modelled like a Bitcoin-style asset, where sender pays, and it's kind of got a fixed monetary policy. But what if you want to have a different monetary policy, and also you want to do things like receiver pays? That's an example of, like, a credit card-style transaction, when you go to McDonalds and buy something with a credit card, you generally don't pay a transaction fee, the fee is paid by the merchant. So, you could construct assets that way. You could even do feeless assets, for example, that's what EOS does, and Steem does, and so forth. So, there-, so, we'd like to create a universal framework that allows you to parameterise your asset accordingly, initiate your asset, and, here's the most important thing, that when you issue it on Cardano, our hope is for it to be a native asset, just like ADA, so you actually pay transaction fees in that asset, to the validators, instead of having to go through ADA to do that. So, it's a big competitive differentiator, between us and Ethereum ERC-20 assets. So, these are the kinds of things that we expect to do. Now, if you're interested in following our process, we release weekly reports on Cardano Hub, and we also have a dedicated roadmap website, called Cardanoroadmap.com, and basically, we have a monthly timer, and every month, we just, kind of, add to the roadmap. We also release a lot of videos and content on IOHK's YouTube channel, and I tweet a lot, and-, and also, the Cardano Foundation tweets a lot, about different things, and our Reddit's at, I think, over 50,000 members, and we have several Telegram channels already set up. So, there's probably about over 100,000 people on our social channels now. So, the movement's grown a lot, we've tried to build a lot of community management capabilities, and I'd say the most immediate things on the horizon are going to be the Shelley release, and those testnets, and so forth, and staking and delegation, and then the-, also the smart contracts side of things. And then 2019 is the-, kind of the more advanced stuff. CP: Great. And lots of really interesting things. So, I think we're going to have to wrap it up here, but thank you very much for coming on. We will be watching this, we would love to have you back on in a few months, to tell us more about where you're at, and talk to us. Only last question I have here, is if you could just share your Twitter handle for the-, the people that are interested. CH: Yeah, it's @IOHK_Charles. CP: Fantastic. Thank you very much. CH: Okay, thank you so much. Cheers. [Break] SK: Thanks, Charles, awesome insight in to the future of Cardano. And, of course, I want to thank my co-hosts for today's show, and for giving me a bit of support on my Blockchain Insider debut, Sara Feenan and Colin G Platt. So, where can people find you, Sara? SF: Well, I am on Twitter, @Saronimo, and also you can find the company I work for, Clearmatics, @Clearmatics, or www.clearmatics.com. SK: Brilliant. And you, Colin? CP: I-, I like how you don't ask where people can find me, because it's next to a field, obviously. On Twitter, @ColinGPlatt. SK: Also, I have to thank the amazing production team here at 11FS. Laura Watkins, our producer, Michael Bailey, our Editor, and our Assistant Producer, Petrit Berisha. 11FS, the company that brings you this podcast are a challenger agency, who help banks, asset managers, FMIs, and anyone with a challenge in blockchain or DLT, to achieve more. If you want to understand how to commercialise blockchain projects, or just have a speaker for your next event, we hope that you'll get in touch. Hit up our website, 11FS.com, to find out more. Thank you so much for listening. If you like what you heard, subscribe to our podcast, leave us a review on iTunes, those reviews help us so much, and spread the word. Tell all your friends and colleagues to listen, too. We'll have more Blockchain Insider next week. Goodbye. END OF AUDIO 00:54:40 Blockchain Insider Ep. 42. Interview with Charles Hoskinson of Cardano START OF INTERVIEW CP: I'm here with Charles Hoskinson, the CEO of IOHK, which is a company that is a contributing core developer to the Cardano blockchain and cryptocurrency. Thanks for coming on today, Charles. CH: Pleasure to be on here, thank you for having me. CP: So, there's lots of things that you've been working on, you have a very long history in cryptocurrencies, blockchains. I'm very excited to be able to talk to you about the projects you've been working on lately, which include Cardano, as well as a few others that kind of came in before the launch of Cardano. Before we get started on that, could you just tell our listeners who haven't heard of you yet a bit about who you are, and what you guys do? CH: So, IOHK is a research and development company. We're kind of a unique firm in the cryptocurrency space, where we-, we work on multiple cryptocurrencies, and we do everything from the peer reviewed science side, where we actually write papers that go through the academic process at universities and conferences and journals, and we go all the way to the engineering side, and we focus on a very particular type of engineering, which is called high assurance software development. So, it's commonly seen in places like NASA, or the aerospace industry, or the health industry, where, you know, the failure of a software either results in the loss of billions of dollars' worth of a product, or human life, or both. So, we tend to borrow some of those software techniques, and we've been systematically bringing them in to the cryptocurrency space, so we can write cryptocurrency protocols in a fundamentally different way, so that they're more reliable. CP: Maybe, kind of, for our less technical viewers, can you explain a little bit about how that particular process works? Maybe how that's different from what we've seen, in the development of things like Bitcoin, or Ether? CH: Yeah, so, generally speaking, when you write a protocol like Bitcoin, or BitTorrent, usually how that ends up happening is you-, you have a single developer, or a small group of developers, and they have a really good idea, and they don't really have a formal protocol, or specification. Instead, they just say, "Well, let's go experiment," and they iterate, and iterate, and iterate, and then they release it as a beta test, and people begin adopting it, and then they iterate and iterate, and they follow that process. And, for the most part, most software is written that way, especially software out of startups. So, if you're in Silicon Valley, and you're following an agile process, that's generally where you go, and the goal is just to get it in front of the customer, as quickly as possible, and there's kind of a back and forth relationship. The problem with that type of software development is, you presuppose that you're going to make a lot of bugs and problems upfront, and that's okay, because you're always one or two patches away, to somehow resolve those things. But the issue with cryptocurrencies is that, if you make a mistake, that mistake may be permanent. There's already problems and flaws in the Bitcoin core protocol, like a multisig issue, and other things like that, which, to this day, have not been resolved, because they would either require a soft fork, or a hard fork, or it's just too difficult to get consensus around it. And even the parameters, like, for example, the block size, is really hard. So, when you live in a cryptocurrency, or a protocol-centred world, if you make a mistake, the consequences of the mistake are very dire. So, what you do, to ameliorate this, is you start with what's known as a specification. So, what a specification is, it's basically a-, like, a mathematical description of what you want to accomplish, and that can be everything-, let's say you're writing a PGP client, there's an RFC for PGP, and the idea is that that specification is implementation-independent. So, it's not written in code, rather it's written in math, and language, and any engineer should be able to read that, and develop an implementation, based on that, and it's as least ambiguous as possible. The holy grail would be to say that two independent engineering teams take your reference spec, they implement it in a clean room, they never talk to each other, they turn them on, and then, somehow, they're able to-, their implementations are able to talk to each other. For the PGP case, that would be, you send me an encrypted email, I'm able to decrypt it, I send you an encrypted email, you're able to decrypt it, but we never actually talk to each other. So, that's what specification-driven engineering is all about, and there's various levels of assurance that you can put behind it. If anything, just writing a spec helps you really clearly understand what you want to do, but then you can even take it a step further, where you can generate a computer proof, it's called a bisimulation proof, that allows you to actually verify that your software matches the specification, meaning for every input in to the spec, the output matches the output that you would expect from the implementation that you've created. That's really hard to do, it takes a long time, and a lot of effort. CP: So, not only happening inside the client level, to ensure that, when I do X, on top of your blockchain that's been developed this way-, but I'm curious on-, on how this would work on the things that are actually implemented. So, let's say I-, I decide I'm going to develop something on top of Cardano. Can-, is this native, inside of how the blockchain is actually set up, that would enforce me, if I wanted to set something up, so that I don't have a-, a DAO-type situation? CH: So, blockchain is an aggregation of many protocols, and so you have a consensus protocol, you have a transaction language, or, you know, execution semantics, you have a network protocol, and that's kind of like level zero, that's the basement, that's the foundation that you live on. And then, for Ethereum, onward, we-, we made blockchains programmable, and so the idea there would say, "Okay, I'm going to give you, the developer, a programming language, and you're going to be able to write your own transactions, your own smart contracts. So, in that particular case, the verification that we do at the basement doesn't really do much for you there. It assures you that the basement that you're building on is a strong foundation, and it's designed correctly, but if you make a mistake in your code, there's nothing I can do, on my end, to-, to, you know, prevent that. Rather, what I can do is give you better tools, and I can give you better techniques, and methodologies, and languages to develop in, to reduce the likeliness of mistakes, but that's like saying-, well, you know, Microsoft can build a really secure version of Windows, but you, as the Windows application developer, can still make a mistake with your app, and deliver a poor user experience. So, Microsoft can certainly do things to try to prevent you, as a developer, to, you know, write a crummy app, but, at the end of the day, the ultimate power is in the hands of the developer. So, for that, we actually are working very closely with Runtime Verification, it's a specialised firm, in Urbana-Champaign, in Illinois, and they specialise in things like programming language design, and verified compilation, and-, and VMs, and so forth, and they're actually working with us to build a really nice virtual machine called IELE, and specialised toolings, that we can deliver to developers, to reduce the probability that they're going to have bugs, but that's a bit different than formal verifications. CP: And that's some-, some very interesting points in there. So, it's not only that you've built a better product, you're also partnering, but, at the end of the day, it's still the person doing the development that has to go through those extra steps, and make sure-, CH: Right, and they might not want to. For example, let's say your goal is to build a rapid prototype, and you've built in to your contract the ability to update it. It's okay to then make mistakes. One of the issues with the DAO was that, once it was set, they couldn't change it. But if they had built an escape patch, to update the contract, they could have easily corrected a bug, or a problem. They probably didn't want to do that for legal reasons, instead of technological reasons. And so, you know, it just depends on what is the software you're actually deploying, who are your customers, and what are their expectations, and, in some cases, you really do need the immutability, and unchangeability, that a blockchain can provide you, and in other cases, you actually need to upgrade and mutate the software. So, not everything needs to be high assurance, but certainly the thing that does need to be is the foundation you stand on. You'd like to know, if you're investing millions of dollars of development effort in to using a platform, that that platform is correctly designed, and it's-, and it's bug-free. CP: So, let's get straight in it that point. On the platform. Tell me a bit about, what is Cardano, what are the specific problems you're trying to solve, that can't be solved by things like Ethereum, or by Bitcoin, which are very different. What is the problem you're trying to solve, and why did you decide to solve it the way you've done? CH: So, we look at Cardano as, kind of, the first third-generation cryptocurrency, or the most complete third-generation cryptocurrency attempt. So, if you look at Bitcoin, we consider that first-generation, and Ethereum, we consider it second. They were really trying to solve different problems. Bitcoin was trying to solve less of a payment and scarcity problem, more of a social problem. It was trying to create a notion that somehow Bitcoin could be valuable. It was, you know, this collective delusion that, you know, Bitcoin actually is worth something, you can trade it on exchanges, buy stuff with it. That was the major hurdle it had to overcome. But the minute that that set in, then people said, "Well, it's not very useful. I can't really do much with it, it's just, kind of, a push payment system. I'd really like to have programmability." So, what Ethereum introduced was this idea of the smart contract, and saying, "Okay, now you can have arbitrarily complex transactions, and persistent programmes that live on a blockchain, and let's go see what experiments we could run with that." Well, just like bitcoin, Ethereum has been very successful, and, as a result, people are starting to have opinions about what they'd actually like to do. And what they've found is, Ethereum doesn't scale. So, there are really three design considerations that we think the third-generation encompasses. One is scalability, where, as we move from thousands, to millions, to billions of users, we need systems that behave like BitTorrent, where, as users join, you gain more resources. And, currently, no cryptocurrency protocol is really designed that way, holistically. Second, there's going to be a lot of cryptocurrencies, like thousands of them, and there's legacy systems, like credit cards and bank accounts. And so you really need interoperability, because the reality is, even if there is a consolidation, there's not going to be a consolidation to one standard. There's probably still going to be hundreds of cryptocurrencies. So, it's really important to talk about the internet of blockchains, including standards, and bespoke primitives within a protocol, to make it really easy to move value and information between your protocol and other protocols. And then, finally, there's a, kind of a meta problem, that we've seen with Ethereum Classic, and Bitcoin Cash, and these other protocols, in that there's a governance concern, and the governance concern is that, you know, you-, it's not innately clear how we decide how to change and evolve these protocols, and also there's a treasury concern, in that it's not innately clear where we're going to source money, to update and control these protocols, outside of the ICO, and the ICO tends to introduce a great degree of centralisation, but that's a finite event. So, there's this thing called the golden rule, uh, he who has the gold, makes the rules, and that's-, that's a big issue right now, in the cryptocurrency space, and it's a sustainability problem. So, if you look at Ethereum and Bitcoin, they're great protocols, they certainly accomplished the missions that they originally set out to do, but now everybody, EOS, IOTA, Hashgraph, AEON, Ripple, and even Ethereum itself, are racing towards upgrading themselves to this third-generation, where we have true scalability, we have interoperability with many different systems, that's easy and cheap, and that we have some form of a governance system, to decide who pays, and who gets to decide the vision and the progress. The other thing is that you'll-, you'll notice that there's kind of a bifurcation amongst ledgers. There's a permissioned, private ledger, and then there's this permissionless, open ledger, and we tend to consider them to be very different things. So, when we say, "Hey, there's Hyperledger and then there's Ethereum," they feel like they're really different, even though they have very common DNA, and the only difference is who controls at the top level. So, the last part of what you're exploring is, can we blur the lines between the private permissioned ledger, and the permissionless ledger, and actually allow you to deploy an enterprise infrastructure that easily can talk to a permissionless ledger, like Ethereum or Cardano, for example, so that you can move value between those two systems. Just a very quick example of where that would be really useful is, let's say you're running an exchange. Right now, running-, let's say it's Bitstamp, if I send you Bitcoin, it goes from one address on the Bitcoin network to another, and the network doesn't know you're an exchange, and doesn't give you any special protection. So, if you get hacked, you're at the same mercy as anybody else. But what if you could send your Bitcoin to a sidechain, and that sidechain was actually controlled by the exchange, and they have a lot more logic in there, like the ability to reverse transactions, and so forth, that they can put in for consumer protections, and to protect you against hacks, and so forth? You're already trusting the exchange with your private keys, you're already trusting them to hold your money, so you're not really losing any privacy or control, you've already surrendered that, you're just now gaining consumer safety from that. So, it would be really nice to explore, like, where those boundaries are, and how can we make it easy for an exchange to do something like that, and still be able to talk to a major network. So, that's really Cardano project in a nutshell. It's a continuation of what's come before, and it's a recognising that there are some real problems, in terms of scalability, interoperability and sustainability. These are really big problems, and they're going to require a lot of new protocols, and a lot of new code, and a lot of new solutions, and it would be really hard to iterate an existing currency, like Bitcoin or Ethereum, in a reasonable amount of time, to get there, because there's so much value at risk already, there's hundreds of billions of dollars in play there. So, it makes a lot more sense to experiment with a smaller, more bespoke project, but if we get it right, I think we have a chance to actually become just as large as Bitcoin or Ethereum, perhaps even larger. CP: And those are some really, as you said, very important problems that are-, that exist out there, in the current existing solutions, that you guys are really tackling. And one thing that I really want to hit on, and-, and something that I was following, a while ago, on-, on Twitter, was, there was another-, another large, I don't know if I'd call it third-generation project, but a specific blockchain project called IOTA. There were some researchers and academics looking at this, which-, and the reason I bring this up is because you're kind of the first project that I've seen really align yourself with the academics. The other ones have just, kind of, had them around, but they've just, almost, kind of, come in. IOTA has kind of taken a different thing, somebody's pointed out, maybe, some flaws, some problems in it, um, and they pushed back very hard on it, um, and I really liked a response where IOTA, the Foundation, and some of the people behind it, were saying, you know, "We might actually take legal action against the way these researchers have put it in," and you were actually supporting them, and saying, you know, "We stand behind you." I thought that was a really good way to do it, but maybe you could talk a bit more about the importance of independent academics inside of these things, that aren't necessarily just in the Foundation. CH: Yeah, just to clarify, I-, I took the-, I took the following position. So, I don't-, I've never taken a position of whether the audit that was done by the DCI was right or wrong. I-, I could-, frankly, couldn't care less about it. It's-, it's more of about proper conduct. So, the reality is that infosec audits, cryptographic audits, these are a fact of life for any product that makes assertions about security and quality, and auditors, there's-, there's a delicate relationship between the auditor and the software developer, in that it's-, you know, the auditor's basically exposing all of your sins, and your poor decisions, to the general public. But in that, there's this notion of fair disclosure, so, the auditor has a moral obligation, an ethical obligation, to-, to inform the developers, or the project managers, prior to a public disclosure, what they've found, uh, and then there's usually a negotiation of what is the best way of releasing this information, and the timeframe to release this information. It's not, "Can we bury it, and hide it, and pretend like it doesn't exist," it's more of a, you know, "Can we release it next month, so I have time to prepare a patch, so that hackers can't take advantage of this potential vector." The challenge that I had with IOTA is that, instead of following the normal process, and, by the way, we've been audited, as well, Kudelski Security, for example, did an audit report of Mantis, and found bugs, and we fixed them. Instead of following the normal process, of going back and forth, and saying, "Okay, this is how we're going to fix it," they just basically said, "Everything you've found is not real," or, "It's all theoretical, and there's no example, and you shouldn't release any of this," and then the auditors said, "Well, we're auditors, we're going to release it," and they said, "Well then-," you know, "Don't," and then they broke off communication, and then the auditors released some stuff, then IOTA personally attacked them, and said that they're biased, or they have a conflict of interest, and they're horrible human beings, and then some people even threatened potential legal action. Now, I felt, as a member of this space, regardless of what your opinion is, of whether IOTA is great or wrong, that is going to damage the relationship with infosec experts, and cryptographers, in cryptocurrency projects. So, now, moving forward, people who would normally work with me, or Vitalik, or Dan, or any other project, would now say, "Well, maybe I don't want to do an audit of Cardano, because if I do, and I find something, I'll get sued." So, I feel that they created an existential problem, in that relationship that we rely upon, to actually verify that what we've done is-, is correct. So, what I said is, "I'm not going to take a position, but if you guys sue the DCI, I will offer to pay their legal fees," if anything, just to-, to provide some level of assurance to infosec experts that they're-, they're covered, and that the cryptocurrency space isn't going to harshly punish them for commercial reasons, rather than academic reasons. But then, to a broader point, I think we have a systemic crisis in the cryptocurrency space, about verification of claims. The reality is, there's a lot of tech, and there's a lot of scientists now, and people with PhDs from good universities, writing lots of math on paper, and normal investors, and normal people, and VCs, they really can't make heads or tails of it. They say, "Okay, I hear on limited scalability, and DAG this, and there's some quantum cryptography here, and-, and there's lots of crazy ass symbols on the paper, I can't read this." So, what ends up happening is, we tend to create cults of personality around people, where we say, "Ah, well, I trust Vitalik, or Charles, or Dan, and I really think they're very bright, and I'm just going to go believe that person," when, in reality, that's the most dangerous thing you can do. The smarter a person is, the easier it is for that person to deceive you, and deceive themselves. The canonical example is Kurt Gödel. This is a guy who literally broke math. He proved that mathematics is incomplete, and it can never be made complete. It's got a hole in it, and you can't fill it, because of the way math is constructed. He was one of the most brilliant logicians in human history, a very rational, super logical guy, very reasonable person, who, by the way, died, starving to death, believing that people, communist agents, were poisoning his food. He was a paranoid schizophrenic. So, this is a guy that, like, on one hand, is so logical that he can undo the laws of mathematics, but then, on the other hand, he's like the homeless guy on the streets in San Francisco, thinking government agents are poisoning him. So, just because you're really smart and really talented, doesn't mean you're not above self-deception, or you're not above the ability to-, to deceive others. So, what we tend to follow, at the Cardano project is the "trust but verify" approach, where we say, "If I'm going to make a scientific claim, great, I have an obligation to take it to people who know what they're doing, who have no stake in the game, and have those people either tell me I'm crap, or tell me that I've done something reasonable, and usually, it's somewhere in between. Now, it turns out, for 400 years, we've been, as a community, developing this thing called peer review. It's given us all the science we have today, and the reason why my laptop works, and the reason why your video camera works, is because of that project. So, that process is pretty good. It has its flaws, but, in the computer science world, it's actually very responsive, it's pretty fast, and it's not subject to the biases you'd see in things like gender studies, or, you know, philosophy, and so forth. It's generally a very objective process. So, what we do is, we write scientific papers, and we submit them IACR conferences, it stands for the International Association of Cryptologic Researchers, there's four, five major conferences a year we tend to submit, they're spaced about every three months, and a lot of these conferences accept only about 20% of the papers that are submitted there. It's very harsh, and very rigorous. And these are papers submitted amongst people at major universities, like Cornell, and Harvard, and MIT, and so forth. And just because you get accepted actually doesn't mean the paper's okay, you still have to show up, and defend the paper, and then, it actually creates an incentive for other researchers to find a flaw in your system, because, if they do, they can publish a paper about it, and they get academic credit for it, and they can then break it. So, it means that I now collectively get access to the broader cryptographic community, in many cases, people that you could never hire. For example, Adi Shamir, he's got a Turing Prize, that's the Nobel Prize in Computer Science, and, more importantly, he's filthy rich. There's no way you can go to Adi and say, "Hey, can you come work on my project?" If he doesn't want to do it, he doesn't want to do. But he still shows up to the conferences. For example, I'm going to be on a panel with him next week at CTRSA, and if you're engaging him in that way, he will actually take you seriously, read your paper, and give you feedback and advice. That's literally a person no one can hire. Microsoft can't hire him, Google can't hire him, I can't hire him, but using this process, I give him an incentive to actually try to think about my problem, and tell me what's wrong with it, and so forth. So, for example, one of our paper, Ouroboros, we published in 2016, since we published it, it's already been cited over 50 times, and seven papers have been written about it, including one charting scheme, called OmniLedger. Now, we didn't pay for any of that. It just came, naturally, out of the academic process, and we've learned a lot from that process. So, I think this is great for the investor, and for the regular cryptocurrency person, because it says there's an objective milestone, that's independent of the project, verifying the claims that are being made are correct, and it's very rigorous, because four out of five papers are rejected, so being accepted does mean something. And second, it's good for the project, in general, because it gives you the ability to talk to a different group of people you can't hire, and that group of people are generally some of the smartest people in the world. Now, it's not the only thing, it doesn't guarantee your results are going to be practical, or that you can implement them properly, you have to use different things, and be a bit pragmatic, for that, so there's certainly an engineering side of it, but I think it's a brick in the wall that you have to build, to be able to build a proper protocol. CP: And I think that's a-, that's a very good way to look at it, and-, and it's a very positive sign, to me, that you've taken that very mature, educated, well-rounded approach, rather than just trying to--, to push up the value, and turning down things, as we've seen-, as we've pointed out other projects have done. So, for the people listening, what-, what should we be looking out for? What are the-, I hesitate to use the word "milestones", but what are the-, what are the big things, in the next three, six, twelve months, and things that you'll be happy to see the Cardano project and community take on? CH: Yeah, that's a great question. So, we're really, really focused on moving from Byron to Shelley. So, Byron was the initial release, so it's a full mainnet, we're running Ouroboros, we're running a proof of stake protocol, but, by design, it's kind of set up like Ripple, because we didn't want to just invent a new protocol out of thin air, and, you know, watch it, and say, day one, "Here you go, guys, good luck, have fun, hope it works." We-, we wanted to, kind of, release it in milestones and stages, and learn as we go, and also, because it's a totally new architecture, a new platform, it was-, to be responsible, you need to have some checks and balances, and some recall points, and so forth, just in case you make a mistake. So, what we're doing now is transferring the network over to the general public, in a very systematic way, so, Shelley is all about that, the peer to peer networking, we're running Ouroboros with stake pools, and delegation, turning on block rewards, these types of things. So, at that point, the network will be on par with Bitcoin. Much better, but it's-, it's basically a system like that. The other thing is that Cardano's being built in layers, and so we've separated accounting from computation. So, if you look at Bitcoin and Rootstock, that's the closest analogy, where Bitcoin's kind of simplistic, and you can't do much with the transactions, but if Rootstock works, you'll be able to send Bitcoin to that sidechain, and then there you get smart contracts. Now, why do you want to do that? Because then you can support multiple computational models. You could have Ethereum-style smart contracts, or NEO-style smart contracts, or maybe even a permissioned, private domain, where they run on servers, instead of a network. Then you can go back and forth between that, and some can be regulated, others can be unregulated, and so forth. So, you have a lot more flexibility. Second, computation is a higher liability, and more complicated endeavour. You know, just because Bitcoin, you're kind of indemnified for being a miner, doesn't mean being a miner in an Ethereum-style system indemnifies you from legal responsibility. For example, if you look at Tor Exit Nodes, more than one operator has been arrested for trafficking child pornography. Or BitTorrent operators, more than one person has run in to legal hot water for filesharing intellectual property. So, in that case, it's a really good idea to segregate your networks, and so you can kind of decide where your liability wants to live, and have a Bitcoin-like, low liability experience for accounting, and then increasingly higher liability for computation, depending upon domain. So, we're going to be turning on the testnet soon, for smart contracts, in a separate layer, and then we'll be linking that, eventually, this year, hopefully, with the main network. So, our hope is to kind of catch up with Ethereum and Bitcoin, in terms of features and capabilities, but one of the biggest milestones for us is the specification-driven development. I'll send you a spec after the-, the show ends, to give you a sense of what they look like, but basically, every part of our system is eventually going to be covered by a formal specification. So, we have this really math-y thing for what a wallet should do, and a really math-y thing for how our core protocol is going to work, and so forth, and that basically means that we now have, instead of an implementation, we actually have a math representation of the design of the system. So, anybody can take that, and build a reference implementation from it, and it also gives us something to talk around, for the improvement proposal. So, that's a major milestone for us, how do we write good specs, how do we get people to understand specs, we're probably, for example, for the wallet spec, going to do a series of YouTube lectures on it, to annotate it, and then, from there, how do we actually create an improvement proposal process, based on specifications? Then, in 2019, we're going to start turning on the scaling features, so we're going to have sharding, and the democracy features of the system. So, we have blockchain-based voting, and other things, so kind of like what Tezos is talking about, but we have our own system that we're developing, out of Lancaster, using liquid democracy, and that'll allow the system to start becoming scalable, and also more sustainable. Over time, we're also going to be turning on a lot of our sidechains capability. So, we have a paper coming out, we're submitting around May 8th, which is a really beautiful formal model for sidechains, and I think we actually have the first formal rigorous security proofs for these things, out of any project, and they work on both proof of stake and proof of work systems, but basically, long and short is, we're trying to create our own version of interoperability, and so, over time, we're going to be dragging more and more of that in to our system, and then we're going to look at market standards, like what Interledger is doing with the committee at WCCC for Ripple, and then things like AEON's Interoperability Protocol, and so forth, and our hope is to drag, potentially, some of those things in to our ledger, throughout 2018 and 2019, so that we can talk to as many blockchains as possible, and listen to them, and receive transactions, and send transactions to them, and so forth. Another big milestone is asset issuance, so we have this workstream called Chimeric Assets, where we wanted to take the ERC-20 standard, and extend it, and start talking about all different kinds of asset classes. So, for example, ERC-20's kind of modelled like a Bitcoin-style asset, where sender pays, and it's kind of got a fixed monetary policy. But what if you want to have a different monetary policy, and also you want to do things like receiver pays? That's an example of, like, a credit card-style transaction, when you go to McDonalds and buy something with a credit card, you generally don't pay a transaction fee, the fee is paid by the merchant. So, you could construct assets that way. You could even do feeless assets, for example, that's what EOS does, and Steem does, and so forth. So, there-, so, we'd like to create a universal framework that allows you to parameterise your asset accordingly, initiate your asset, and, here's the most important thing, that when you issue it on Cardano, our hope is for it to be a native asset, just like ADA, so you actually pay transaction fees in that asset, to the validators, instead of having to go through ADA to do that. So, it's a big competitive differentiator, between us and Ethereum ERC-20 assets. So, these are the kinds of things that we expect to do. Now, if you're interested in following our process, we release weekly reports on Cardano Hub, and we also have a dedicated roadmap website, called Cardanoroadmap.com, and basically, we have a monthly timer, and every month, we just, kind of, add to the roadmap. We also release a lot of videos and content on IOHK's YouTube channel, and I tweet a lot, and-, and also, the Cardano Foundation tweets a lot, about different things, and our Reddit's at, I think, over 50,000 members, and we have several Telegram channels already set up. So, there's probably about over 100,000 people on our social channels now. So, the movement's grown a lot, we've tried to build a lot of community management capabilities, and I'd say the most immediate things on the horizon are going to be the Shelley release, and those testnets, and so forth, and staking and delegation, and then the-, also the smart contracts side of things. And then 2019 is the-, kind of the more advanced stuff. CP: Great. And lots of really interesting things. So, I think we're going to have to wrap it up here, but thank you very much for coming on. We will be watching this, we would love to have you back on in a few months, to tell us more about where you're at, and talk to us. Only last question I have here, is if you could just share your Twitter handle for the-, the people that are interested. CH: Yeah, it's @IOHK_Charles. CP: Fantastic. Thank you very much. CH: Okay, thank you so much. Cheers. END OF INTERVIEW END OF TRANSCRIPT