JH: Hey Charles, it’s such a pleasure to have you here. I don’t know if you have done a talk for the German community. It’s a honour. And I’ve had so many people on my Youtube Channel who where like, we want Charles. And I was like, okay, let me reach out, let my try. So it’s really awesome that you responded on twitter.
CH: Thank you so much for reaching out Julian. We actually have some great German employees. For example Philipp Kant is one of our lead technical directors at Cardano. And he was actually our director of formal methods, before he moved up the chain and the Director of Education is Doctor Lars Brunius, and he’s based in Munich. So we have some great fans in Germany, we have some great employees in Germany and we have a strong Cardano community in that area, so it’s great to be here.
JH: It definitely is. I always ask, which coin should I report on next. And they are all like, Ada, Ada, Ada. Trust me, people are really hot on this. What I would love to do is: you have talked so much about how you got into this space. So I want to fast forward to a time, that I personally always think – more from an entrepreneur standpoint – is maybe more interesting, and that is, the old all-time high 2018, afterwards the entire market crash. I am following you on Twitter, I saw a lot of the messages, a lot of the negativity obviously from a lot of the holders. You have to focus, head down, work. Then there is the price action. Walk me through there. What was the focus, what kept you going? Especially 2018 and 2019 and then in 2020 and now stuff is really flying.
CH: We don’t think so much about the price here. We wake up every day and we say what engineering problems have to be done, what science has to be done. It’s quite unfortunate that Cardano was launched right in the middle of a big bubble bull-search. That year I was on Bloomberg saying, hey, the ICO craze is a ticking time bomb and that was when Bitcoin was at 600 Dollar and then it went from 600 USD to 20.000 USD. When Cardano hit market, I said, these are not healthy markets. They’re very speculative, supply is very thin. I mean you were seeing things that were like a nine inch nail song, a copy of a copy of a copy. It was a copy of a copy getting a billion Dollar valuation and it is what it is and you hope for the best. But then it collapsed and there was a long period of just winter and everything was kind of stable and it gave us some time to just build and keep pushing forward. And of course we got a lot of criticism and what’s extraordinary is, is that we’re both slow and fast. The methodologies that we’ve chosen are systematic and predictable but they don’t have flashy stuff happen. It’s not like every five minutes something is coming out, Today everybody has an attention deficit, so they kept focus on everything. And meanwhile we are actually faster in many cases than our competitors. For example Ethereum has been working on proof of stake for over 2 years longer than we have. With a much larger development team, unlimited financial resources and we were first with proof of stake in 2020 with Ouroboros. And Polkadot based their proof of stake protocol on our Ouroboros. So even the people, who were like, the new, fast Ethereum people, they tend to follow what we do or they tend to be later at the market. So we just knew what we were doing. We said that’s what we’re going to do, we told everybody that and we followed their process for more method Hasskle, preview record development, we’ve written 102 papers, we’ve written enormous amounts of code and we’ve now gotten to a point where there’s predictable releases. For example Shelley last year in July, then we did Metadata in December, we just did Mary Hard Fork in March and then Alonzo is the next one which will bring next full smart contract abilities. And at the end of the month 100 percent of all Block production will be done by Ouroboros, so the 2100 stake pull operators who are registrated making the entire network, making us actually the most decentralised crypto currency in terms of Block production, probably in the space. It’s been an amazing journey and it’s great to see a lot of economic progress, like Coinbase is finally there and all these other things. That’s wonderful. But they were never the primary concern, it’s always about use and utility and it’s also about making something that’s useful for places like Ethiopia and Senegal and so forth. And we’re almost there. I’d say there are probably another six to nine months of really hardcore building, and then we will be in a very strong position for strong use and utility in the developing world and that’s what I wake up for. I’ve been waiting longer than anybody else, I did a TED Talk in 2014 talking about this stuff. And finally now in my life we’re in a position where we can go out and actually pursue these type of things and get them done.
JH: No man really great stuff so far. Congrats obviously I’m an Ada holder myself, so I’m cheering… so that’s really good. What I would love to talk about a bit going forward is, especially what the community should be expecting or can expect or what should they be looking forward to. One question that now everyone has on their mind is, where are the projects coming from? Who are the users that are using the DeFi NFT capabilities? Do you see this more like the Binance model that kind of cannibalizes Ethereum or do you see this as Cardano getting a bit more of a completely new community or both?
CH: Let’s talk about that, so there are really three trends that are occurring. First of all, the incumbents are multi-chain now and rightfully so if you’re building DeFi why in the world would you just be Ethereum? You’re a crypto and so you’re going to be across the whole space. You want to work on bitcoin, you want to work on EOS, you want to work on all these platforms, because they have users, they have wallets. Why would you exclude them from the process? That’s one trend we’ve noticed where almost all of the popular applications, whether they’re NFT marketplaces or DEXes or Oracle solutions they want to be multi-chain and they don’t want to just put all their eggs in one basket. It’s in their best interest for operating cost predictability and liquidity to be in many places. So we talked to them and it’s very easy to get them to support and move over and and those are long arc deals they take about 6 to 12 months to move through and as soon as smart contract support is enabled, it will happen similar to like Coinbase integration, or these other things. It’s just a process of scale and time. So second in terms of cannibalizing app development that’s already happened if you take a look at Ethereum in 2020 only 31 percent of new dApps were deployed on Ethereum, so 69 percent were deployed on other chains and that trend will continue, because the costs are too high. And also it’s a very difficult network and practice to build production applications with good user experience. Unless you build an enormous amount of your infrastructure off-chain, but if you’re doing that well, then you’re chain agnostic, because you don’t really care if it’s chain A, B or C. So we created the ERC20 converter and we have a whole commercial team and all they do all day long is they sit around and think who can we poach, who can we bring over. And we’ve noticed that for example Singularity.net and others have started migrating over to Cardano. And when they did a community vote, 91 percent of their community said yes do the migration to Cardano. Eight per cent say no stay in the hell of Ethereum. That’s happening, but you know, you’re never really going to get anywhere unless you broaden the pie. Because right now it’s a very small ecosystem, we think it’s big but there’s only 80 000 developers in the cryptocurrency space and there’s 25 million developers in the world. And the vast majority of economic activity is outside of cryptocurrency, so we still have a long way to go and we still have a lot to build and that’s why we’re broadening the pie by looking at real DeFi customers. Not the yield farmer in New Jersey who’s just trying to make a little bit of money or the person selling Tweets. I just tried to sell a Tweet today, let’s see what happens with that. No, what we’re actually looking for is the person who wants to get a loan and they’re a farmer in Addis Abeba. Or they’re a person who wants to do a small-scale project to bring power to their village or something like that and they want to do a micro finance play for that. There’s a real need for DeFi amongst the bottom three billion in the world and what we’re focused on is how do we bring those people into our ecosystem. And it’s a humongous challenge, there’s infrastructure challenges there’s identity challenges. There are issues with reputation. There’s cash in and cash out, you need to actually deal with capital controls and currency stability. It’s a daunting task and you measure that progress in terms of years. The things that we do in Africa are usually on a three to seven year time horizon per project and they’re usually a public-private partnership. However, when you pull it off you bring 5 million people, 10 million people, 20 million people, which is probably larger than the entire active user base of Ethereum at the moment for one deal. So we have a long horizon, that’s why we tend not to care about the ups and the downs of the daily stuff and we say okay let’s build something that when we look back in 10 years or 20 years, we say it made a difference, it was very meaningful and actually brought real purpose to cryptocurrencies. And then people ask, well what’s the value in that? There’s 5.4 trillion dollars of the liquid wealth just in Africa alone, it’s there and it just can’t be accessed by the global markets. From human capital to real estate to natural resources to companies that are very valuable, but they have no liquidity because there’s no stock markets and they can’t IPO. There are so many things there that if only they could touch the global markets they would enrich all of our lives including people possessing those things. And that’s the point of these systems. So that’s what we’re doing, that’s where we’re at, and we love the challenge. We have offices in Africa, we have offices all over the world and people wake up every day with a lot of passion and vigour. And it’s good to see that we can kind of play in all three pods. We do things to encourage Ethereum dApps to come over, we do some things to bring normal developers in, we obviously do the commercial conversations about becoming multi-chain and bringing in popular DeFi platforms. And then we also of course are trying to bring in new customers and I think some combination of all of that is going to be the key to the continuing success of Cardano.
JH: I also want to play a bit the devil’s advocate, just because I think there will be a lot of people watching, who might be still critical or might not be convinced, so I also want to maybe speak for their mind. One question they might have is, why will they go for Africa, which might be the most underdeveloped continent, when it comes to internet access to crypto as a whole. How to go about this?
CH: So, you know that’s a fair question and you know if you’d invested in China 1970, you would have lost all your money. If you invested in China 1980s or early 90s you’re probably a billionaire if you did it right. So there’s a timing component as well. Africa 10 years ago wasn’t quite as promising as Africa 2021. If you look at Starlink you look at the rate of people coming online. If you look at the demographics of the governments, it used to be all the leaders were in their 70s to 80s and they were kind of leftovers from bad eras. Now they’re younger, they’re in their 40s and 50s. They’re western educated and the demographics like 70 percent of Ethiopia is at, or under the age of 30. So very young and they’re digital natives, they have cell phones. When you retire your iPhone it ends up in Africa within a few years. So the infrastructure is finally there and we believe that internet connectivity will cover more than 90 percent of the totality of the population the continent of Africa by the end of 2030. And all the social systems are changing because of globalization. When Starbucks says something like, hey, we’re only going to buy fair trade carbon neutral coffee, that’s like a fun branding thing in Seattle. But when you tell that to an Ethiopian farmer, the only way they can prove that, is a fundamental transformation of the entire supply chain system of their country. So that means, in the next five to ten years all the governance tools, how they vote, how the property ledgers work, how the payment systems work, how the identity systems work, how the supply chain systems work etc. are going to be updated. And this is a leapfrog effect, it’s like when Pakistan said, we want phones. What did they do? They didn’t put hundreds of thousands of miles of copper wire in the ground. They just built 4G towers and now Islamabad has better coverage than many places in New York City. So it’s a situation where this leap frog that’s going to occur, means, that a lot of African nations are going to be blockchain first and native. The way you vote will probably be on a blockchain in 10 years. And there’s no other place in the world, where you’re going to have that opportunity. There’s no multi-Trillion Dollar legacy incumbency system to protect. They’re throwing away a paper-based system from the 20th century and it’s being done by many ministers who are very well educated. Like in Ethiopia for example, the Prime Minister is a cryptographer. He’s the only world leader at the moment who could read my papers. I can’t give those to Joe Biden, maybe Angela Merkel could, she’s pretty bright. But there’s very few people that you could have that kind of conversation, that kind of depth with. And we’re seeing that in Africa and it kind of reminds me like an early Singapore or an early China. And so you never go to where the puck is, you go to where the puck will be. You go to where the world is going to be in 10 years or 15 years and so I think we’re in the right place at the right time from demographic economic progress and also China agrees to that. They’ve put over a trillion dollars of investment into Africa and actually most pre-Covid of the African economies were growing at 10 to 15 percent per year. Their GDPs were just skyrocketing and they’re in desperate need of new systems, which are coming. So my belief is, if we can get in early, all those countries can run on Cardano or a blockchain and those are now a billion new customers that as they grow in wealth they grow in a new economy. And what’s beautiful is, it actually accomplishes what I want to seek in America and in the European Union and in other places, because greed will compel modernisation of America and the European Union. Because they’ll say we want money, we want to interact with these billion new customers, we should probably blockchain ourselves and become interoperable with those standards and so forth. The other thing is, the governments are willing to work with you, they’re willing to change laws, they’re willing to modernize laws, they’re willing to actually be proactive. In the United States, every conversation is, how, what do we do with the SEC and FinCEN. And the treasury department is this, this and this. And it’s so cumbersome and you hire 500 dollar an hour lawyers and they tell you it depends, after you pay them a hundred thousand Dollars. You don’t get that in Africa, there’s still a lot of bureaucracy and there’s still some frustrations and nepotism and corruption and these types of things. But let’s be honest here, there’s probably more nepotism and corruption in the cryptocurrency space than there is in Africa. We have Mt. Gox, we have Bitconnect, we have as an industry OneCoin, all this other stuff. Don’t tell me Africa is so corrupt. Crypto’s just as corrupt or worse. So if we can survive that, I think we can survive anything in dealing with government tendering. You have to be used to Africa time, you have to be used to things that are slow and take a lot of effort and that’s what always been the point of the Cardano project. It’s not something, where you get instant results today. It’s not something where we’re in a rush to capture the fat of the week, the pet rock of the week. It’s something where we’re thinking about the infrastructure humanity is going to run on in 2030, 2040, 2050 and how do we build our way in that direction so that we’re a viable contender for that, as these countries wake up and get globalized.
JH: Do you go there with that bottom-up approach, like really kind of go to the people, or do you do this from a top-down approach? Talking more to the government’s large companies? How do you go about that?
CH: The quintessential push pull question. And we do both. In Ethiopia for example a lot of our efforts there are push, where we are actually directly dealing with ministries. We started with MOUs and educational pilots and now we’ve got the point, where we’re closing deals that are very large with millions of people. The advantage of that is, that the government has the power of the pen, they can mandate the use of the product for millions of customers. Especially younger customers and they kind of grow with you. The disadvantage is, those tendering processes take three to seven years to actually get a deal closed. So it’s incredibly time consuming, very energy intensive and frustrating and you would not believe the bureaucracy in certain cases that we’ve had to go through. In some cases there’s been rival factions that just try to kill deals and then some things happen, like for example we were bidding on something with the ATA, I bid a 100.000 Dollars for a 500.000 Dollar project, because I really wanted to get this project. We were still under bid by another vendor, and because of corruption, because they’ll renegotiate the deal after getting it and got more money. That’s just so disheartening, because we knew the head of the ATA and he wanted us to get the deal, because we had the better technology and so forth. But that process was set up to fail, so you see a lot of stuff like that and you deal with a lot of stuff like that. The push model has problems but if you pull it off you get millions of customers every time you close a deal. The pull model of just building consumer products is kind of like M-Pesa, where you release something and it spreads like wildfire and everybody starts using it and that’s what we’re really going to start aggressively pushing in 2022. We have to do that through partners and we’ve built them in 25 different countries. We’re starting to go with a continental approach, so we’re looking in Ghana, we’re looking at Rwanda, Uganda in addition to just Ethiopia and we’ll also expand to Kenya and Nigeria. And then there’s just a question of what is the killer consumer applications to build and we’re thinking perhaps it’s the Kiva model with peer-to-peer lending, but it also could be Stablecoins and we’ve actually even had discussions with leaders of Africa about pan-African currencies. There’s been some discussion about creating like a pan-African Euro. That kind of a thing like a national transnational currency. Kagame in Rwanda is a huge fan of that. So there’s a lot of pull model potential there and it really just depends on what we think is going to have the greatest impact. There’s still a huge Ag-tech component to the Africa portfolio but financial services can be tremendously profitable because the margins are so good. In 2022 that’s where we’re going to be conducting those experiments and I think some of our baseline infrastructure like prism our identity system will be mature enough at that point. We’re also looking at how do you get crypto offline and off chain. So we have a whole lab at the University of Wyoming that does that and we’re thinking how do you build chips where you can do offline off-chain transactions, we’re just tap them together and it can move a private key from one enclave to another and you get a proof of secure erasure. But it is really a bear of a problem and it did require a lot of infrastructure and resources and that’s one of our fastest areas of scaling. I think we’re probably going to add between 30 to 50 new hires to our company, just for our Africa strategy this year and actually we were going to exercise last year a large growth in Africa. But pandemic happened and it was super difficult, because I can’t travel our people can’t travel, and all the money dried up. And we said okay just wait a little bit it’s not going anywhere, let the pandemic recede and then we can go and go through. And actually there’s a lot of opportunities, because due to the pandemic, like for example vaccine supply chains and other things, where there was a wish list for just common vaccinations against things like polio or other things that they’ve never been able to do. And I was thinking, let’s do a two-for-one and we can do Covid and Polio or whatever. So I think that’s another great opportunity to come in on the blockchain side and do something. 2022 is going to be our year of enormous pull growth and consumer products that exist at the cell phone level or specialized hardware level at low cost. But 2021, as in in the prior years have been all push, where we go with the government and we do a deal with them and we push it out. And Africa is not our only portfolio, we also do business in America, we talk to fortune 500 companies, like in fortune 1000 we did a deal with New Balance for example, where we did shoe authentication. We also work in eastern Europe with the country of Georgia, we did a credential verification program there. There’s a vineyard, I don’t have the bottle with me, I think it’s floating around somewhere, maybe Mike will bring it in for me. But there’s a vineyard that actually is now making Cardano wine and maybe we’ll do a wine supply chain there in Napa Valley. We are also in Mongolia, so we have some Asian connections and so we have over I think 110 deals in the pipeline. Here we go, so here’s Chateau Cardano. And it’s so cool, the guy’s name is Ed, who runs the vineyard out in California, and he’s like, I just love what you guys do, so we changed the name of the wine to Cardano, I hope that’s all right. And i said, we should put a QR code on that and have a supply chain system that tells us where those grapes come from. So there’s a lot of stuff like that, dozens and dozens of dozen things. The other thing is that we have Catalyst, and you know I’m just a company. Cardano’s a protocol and Catalyst is really cool because it basically is like a 250 million Dollar per year grant agency. It’s like the European Union’s Horizons program or the National Science Foundation and anybody can apply for money and the community will vote on it and so we start with small co-horts like 50 people. The last round, last time I checked, the statistics were 16.000 people participating and every round that comes, every six to eight weeks is now in the millions of Dollars. Fund three I think is a million, fund four I think will be two million Dollars and this could be everything, ie. that I run a convenience store, that I want to put an ATM in my gas station or I want to do t-shirts or I want to be a core developer or, hey I want to have wine on the blockchain or something like that. And so that’s a great growth engine and we think over the next six to nine months we should see hundreds of dApps and DeFi projects, like for example there’s already six NFT marketplaces that are proposing for money, we don’t even have the smart contract stack out and there’s already an overwhelming demand for people. There’s also the Pluto pioneers program, that we’re announcing here on March 25th and I think that’ll cover about 1300 developers just to get started and just start building things. It’s a situation where there’s overwhelming demand and it’s almost like we have this great nightclub and we haven’t opened it yet and the line is just stretching outside into the parking lot. It’s really humbling, when we release native token support with Mary, just now 22 days since we released it, 1300 tokens have been issued on Cardano. If you go to cardanoassets.com you know most are small, but at some point these will become the Uniswaps and the other things of our ecosystem. It’s great to see the uptake and how fast the community moves.
JH: One concern maybe a community member might have is, in the past there were many times there were delays on certain goals. Going forward, is there anything that you can improve that you have to improve or is this a bit of a different kind of goal setting, different kind of process or what can you tell the community there?
CH: There were three types of delays that came. The first was scientific delays, where certain papers just took a little bit longer to flesh out. But it turned out that those were the least problematic of the delays, like Ouroboros was published in 2017. That science was done years ago and actually the peer review process doesn’t slow us down very much, in fact we’re so good at it, we have more than 25 academics in-house and we work with probably over 100 professors and 10-15 affiliate Universities. We have an enormous amount of research bandwidth and capacity and it’s very easy for us to rapidly produce good science on any topic. I can be like, hey, I want to do recursive snarks, and they’ll be like, oh yeah, we can figure that out. Three months later I have a paper. Or I want to be immune to quantum computers and a few months later we have like a quantum computer resistant protocol or something like that. That was not the case in 2016, 2017 it was much harder. But we’ve just kind of mastered that world. The second class of delays were engineering delays and really what happened there is, I fucked up as a CEO. It’s ultimately the buck stops at the top and i did a parallel strategy that I thought was going to speed us up but it ended up just fucking everything up and slowing everything down. We had two development teams, we had a very academic, very UK Oxford, Phd people and they were doing the slow methodical formal methods work. It takes years to get all out and meantime we had another development team, there were some young kids and they just were not experienced enough and their job was to bring something to market, that we could rapidly iterate and eventually they’d meet in the middle and we would replace the agile code with the formal methods code as the protocol solidified. And it just made perfect sense in my mind, I was like, oh okay, I can do fast and slow at the same time. Well these kids, they weren’t so good, they were good enough to be convincing but when big problems came it turned out there were a lot of little protocol problems and then we ended up having to spend gargantuan amounts of time trying to correct mistakes that were very subtle. And then eventually we just gave up and we threw away all the code and we had to rewrite everything from scratch. That slow team had to go over and save the fast team and this is where we were in development hell all through 2018 and 2019. The third problem was estimation, we had alternatives like we could have pivoted to a scala code based or a rust code base or something like that we had a rust client and we also had done all the scholar work for ethereum classic, so we had a path to use those. And in 2018 in September, I wrote this memo and i said, what are we going to do, we have haskell scholar rust and the problem was, we were looking at estimates saying well the haskell code is salvageable we should be able to correct it and get it into market in four and a half to six months. Okay let’s do it. A year later, you know it was always four and a half to six months, and we ran into that trap for a long time. But the good news is, we replaced all the code. That was the Byron-Reboot that shipped in 2020. And then we built on that and you’ll notice there’s actually a great cadence where every two to four weeks we have a release, we’re on agile, we have story points and burn down charts. And when we give a date, we usually hit the date or we’re only a week or two off from hitting that date. That was not the case two years ago, three years ago. The other problem I say was Haskell specific, the language wasn’t quite ready for a consumer product across all platforms. It was great Linux, okay in Mac, horrible in windows. The problem was, we had to go back and fix the language. We had to write libraries for windows or especially the networking libraries and these things and then also we had to work on the GHC itself and we had to work on compilation. We had to work on compiling Haskell to javascript, compiling Haskell to WebAssembly. And there was just tons of fundamental work that needed to be done, in fact we’re a founding member of the Haskell foundation now. We unify the whole Haskell community with Simon Peyton Jones and others. And that was probably another six months to a year of pain just to modernise Haskell to a point, that it can do consumer applications. It was in hindsight a lot of mistakes and I was too ambitious in certain things and I thought because we had Haskell bitcoin in these other things, that we could do it. But it turned out that it was a lot harder. And that’s always the case with software projects. But what’s nice about the situation we’re in now is, we paid the price up front for Haskell and now we get all the benefit. We get quick check and property-based testing. We get much easier to test code, we get much more concise code. If you look at like C++ code bases or java code bases or C# code bases, they’re about five to ten times as many lines of code as a Haskell code base. The advantage then is, you have less code, less to read, less to think about, less to keep in your head, less to test. You have much more concise modular programs and you can modify things very quickly. If we don’t like something we can just go back and change it and we can change it in a matter of weeks instead of months and so forth. It was very difficult. The other thing is, we had a lot of academics, who are brilliant people but not like professional engineers. And so we had to kind of upskill and upgrade people to think like engineers and say, yes, I know you can make it perfect but we don’t have nine months to make it perfect, so how do we do this in iteration and you give me a release in six weeks. And then you do another release in six weeks and another release in six weeks and so forth. That kind of thinking is not as prevalent in functional programming language, dependent type land and so forth. We had to learn how to be a great engineering company and to get beyond all of that, but on the other hand we’ve done things that no one else has done in the industry. If you look at all of our protocol design or our ledger rules or our network stack, there are formal specifications that sit behind that. If we compare that to formal methods land, we move at blinding speed. The seL4 microkernel project, which is a formerly verified micro kernel for operating systems took 10 years to do. CompCert took 10, 12 years to do the certified C compiler. We did a lot of this stuff in two to three years, so five times faster in many cases, than a lot of these projects. And to be fair, they did code extraction by simulation and these things and so it’s not apples to apples, but it’s still a remarkable achievement. The other thing is that there’s a lot of assurance about certain properties, like because of the testing that we do, we know for example that the amount of Ada will never be increased. That’s an invariant in the system, well why is that interesting? Well bitcoin actually screwed up on this. If you look in the early history of bitcoin, there was an error in the scripting language in 2010 I think it was, where you could just create bitcoins out of thin air. And there was actually a counterfeit bug in Zcash as well. So that one property you’d like to make sure you could never create Ada out of thin air, or bitcoin out of thin air or z cash out of thin air. Well how do you know? You can’t. You can look at the code really carefully or you can develop a test that actually tells you that, the problem is to get to a point to have a test that definitively tells you that, since we checked everything with a SAT-solver is really hard and it’s very expensive. And the advantage is, we paid that price up front, so if you don’t like it, well we already paid for it. It’s like, you got the car you just have to drive it, okay it’s there. I think we’ll speed up a lot, we already have and we have predictable communication now. Every month we have a show Cardano360. We do videos all the time, blog posts all the time and we’re really starting to get into the refinement problems now like really nitpicky things and cool features like Babel transactions and side chains and so forth. We’ll be able to really have intelligent things to say about clients and the smart contract model is so elegant. There’s nothing quite like it in the space and there was a lot of original research. The other problem was, that there were a lot of open questions in the cryptocurrency space when we started this project like, is proof of stake actually secure or not. Nobody knew, so we actually had to do all the science to build up that corpus of knowledge. But now that we’re here, we know the entire design space. So it’s much easier for us to do derivative work than this original groundbreaking theoretical work that helped fix the broken windows of the industry.
JH: I think that’s really cool, because i think it makes sense why the community or why people are gonna believe that. And at the end the community wants timelines, they wanna hear timelines, even though it’s impossible to give them sometimes.
CH: And we give them now.
JH: That’s what i mean.
CH: That’s the difference between today and a few years ago. And it was so difficult a few years ago because our product and project teams would give us timelines, but then they weren’t necessarily the best and the engineers couldn’t deliver. Now when we give a timeline, it’s like everything has been triple checked and we’re actually in a really good position to deliver and we know why it takes that much time. And we’re working on granite, the code that we have is incredibly high quality. I’d say the Cardano code base is probably the best Haskell code ever written in the history of Haskell. It’s a pedagogical code base as much as it is a production code base where if you want to learn Haskell, read our code, because it’s so well thought out, designed, tested, validated. There’s so many good best practices there and that just wasn’t the case two years ago, it was much more hacky.
JH: That’s what i mean. The community wants timelines, but it’s sometimes so difficult to get timelines. For me two last questions because i know Michael is gonna kick me out anyways, I want to totally respect the time, but two final questions. One is, let’s fast forward five years. Let’s say ethereum 2.0 happens and let’s say Cardano delivers on like everything really solid. Give me the pitch for someone watching that video on how Cardano is, from your point of view, the better platform to work on, to focus on, to build on.
CH: First off, I think our operating cost is not only going to be lower than ethereum but the way we’ve designed things gives us a very sensible model to choose different monetary policies for gas economics and fuel on the side chain side. As a dapp developer you have much more predictable economics with your Dapp development and also the way we’ve chosen our computational model we call it the island in the ocean, you have different paths if you like ethereum style backward compatibility in solidity and that tooling in the EVM, you can write applications that way in Cardano. Great, you don’t have to change anything. If you like high assurance formal methods and absolutely correct applications, like you’re bowing and you don’t want the plane to fall out of the sky, that kind of stuff, then you have a path for that. If you’re a modern mainstream programming language guy like C, C++, eventually other languages, that’s called the ocean, there’s a path for that. First off, we cover all developers, whereas ethereum only covers a subset. Second, we also, because of the predictable economics, will be able to allow you to actually think around your business model your operating costs and these types of things. And you actually know, year by year what it’s going to cost you to scale. Where that’s not clear at all in ethereum one and perhaps it’ll be clear in ethereum two, maybe, maybe not. But we have a better path to predictability, because the tech we’ve chosen is peer-reviewed and it’s built on granite. We know how to upgrade aurora bars, we’re at prows, we have this thing called omega coming this year at least to paper. But we have a clear road map, step by step of exactly how to upgrade every component of our consensus algorithm. Ethereum is like everything, they’ve tried so hard and they’ve redesigned casper half a dozen times. It’s not clear to me where they’re going to be in five years and they keep looking for a saviour. It was plasma and now it’s optimistic roll-ups now Sharding is coming. Perhaps they get one of these things right, but these are not magic. It’s not like you just apply and suddenly everything’s great. There’s trade-offs in all of these things. We know the trade-offs, we told everybody what the tradeoffs are up front and we think the path that we’ve chosen is going to diverge from the rest of the pack over time. And not only do we know it works, but it’s going to work at scale for millions to billions of people and continue to maintain that predictability of cost. Continue to decentralise, continue to get cheaper to operate and also continue to get more power efficient as a protocol. I think those facts alone make us very competitive but then there’s also a user base fact. Ethereum continues to grow in the developed world, especially in wealthy economies. What we’re doing is bringing a completely new demographic into our ecosystem. If you’re a DeFi guy and you actually want real consumption of lending, not bob the dentist who thinks it’s cool that he got a loan through a peer-to-peer network, but actual real people who are using to buy cows and crops and these things. That demographic is going to start showing up on the platform and that customer base is not small. It’ll be in the millions to tens of millions to hundreds of millions and so forth. I think we have a lot of appeal in the fortune 500 because of formal methods, all the way down to the poorest people of the world and i think we just have built in a computational advantage and built in an engine advantage with the way that we designed um Ouroboros. But microsoft, google and apple coexist. They’re huge companies, they make lots of money, they have divergent ecosystems. So it probably will be the case that f2 or f3 or f70 or f unicorn edition will be around in 2026, 2030. And that’s great. But I believe also Cardano will be there and we’ll just be as relevant if not more so. And it’s really more of a question of will bitcoin upgrade or not and also will the big guys. I don’t really worry too much about ethereum, what i worry about is the fangs come in. The facebook and apple and amazon and google and microsoft because they have platforms with billions of people, issue their own cryptocurrencies and they come in with like a very federated or centralised model. And that is my competitor, because they have unfair regulatory advantages, unfair scale advantages and they also have gigantic networks. And the only reason they haven’t quite come in is, facebook got slammed down with libra but that’s not going to be the last of that story. They will come. In 2025 we’re gonna have USD coin issued by the federal reserve. The Yuan issued by the people’s bank of China and probably these gigantic internet conglomerates who have entered the space as competitors. Ethereum is not at that scale and i don’t think ethereum is going to somehow conquer them or bitcoin is going to conquer them. That’s the real clash of the titans and I’m preparing Cardano for that type of battle. I think that’s the one that’s going to give us a run for our money.
JH: Cool Charles, thanks so much. One last quick question, any younger version of Charles Hoskinson, how old would that person be and what would be the the lesson that you now as the wise older Charles Hoskinson have? What would you tell that younger version, as an inspiring kind of parting thought?
CH: I think the single most valuable skill, in this industry in particular that you have to find a way to deal with, is the ability to address criticism. Yesterday there was a mass shooting at a supermarket that i used to go to, two three times a week, when i was a student at CU Boulder. And literally the guy just showed up with an assault rifle and just shot 10 people. And I went to a supermarket that day, had I lived still in that area, that’s the supermarket I would have went into. I probably would have been shot, because I went at the exact same time. So i made a video saying that we need more empathy in the world and then you have people commenting on the video about the price of Ada or calling us a Ponzi scheme, one particular person said, this video is about broken promises as if this is about timelines or deadlines. It has nothing to do with Cardano. So it just is extraordinary to me how people think, in the lack of empathy that people have or respect that people have, and I have historically not dealt with that well. Because it’s just, I’m an abrasive guy, if somebody pushes me, I push back it’s just how I’m raised. I’m Italian, this is what we do. And in a younger version of myself, as if you could meditate a little bit more, be more calm, don’t punch back. Perhaps that’ll make people like you a little bit more. Because the problem is, when you punch back, people just somehow forget why you’re punching and attack you for the counter attack. And it damages the ecosystem. Everything from the do you know who i am tweet to other such things, those have a story behind them, that story is forgotten and your enemies will use that to brutally criticise you. Cardano’s probably the most criticised cryptocurrency in the entire industry and it’s bizarre, because we’re criticised for things that are so materially not true. They call us a ghost chain, 14 billion dollars of transactions yesterday. They say that there’s no users, there’s over a million users. They say that it’s just a wallet, even though there’s all these things you can do. There’s 1.300 issue tokens, 2.000 stake pool operators. There’s all this progress, there’s 102 research papers. It’s just a paper, the papers don’t work. The peer review is not legitimate, even though we’re peer reviewed at the top venues and so forth. It’s like they’re living in a parallel reality and you know, you have to somehow get to a point where you don’t take that seriously. But in some cases no matter how hard you try, especially when people die, 10 people murdered in a place that I live nearby, is extraordinary. And the fact that the only commentary people on twitter, Reddit and other places can have is, what is the price of ada or you’re a Ponzi scheme or something. It’s just like where do these people exist.
People are married to these people. People live with these people. How can we co-occupy a world with these people. So younger Charles, because older Charles hasn’t figured this out, younger Charles you figure that out, you’ll be a much better happier entrepreneur than me. We’re just gonna have to deal with my warts and scars and sins and so forth.
JH: Charles, thanks so much. Especially for those last inspiring words. I think they’re super important.
CH: Thank you Julian, this was so much fun.
JH: Stay safe, take care and hope to see you hopefully offline at some point at some of the conferences again.
CH: I’ll see you over the web or i’ll see you in person next time i’m in Germany. Cheers.
JH: Thank you. Bye.