Name: Balancing the Ledger: IOHK's Mission to Bring Crypto to All
Uploaded: 2019-04-08
Duration: 11 min 18 s
Description: One of IOHK's projects is Cardano, a protocol which founder and CEO Charles Hoskinson calls a 'financial operating system for the countries that don't have one.'

[ MUSIC ] Welcome to Balancing The Ledger, where tech and finance intersects. I'm Robert [ UNKNOWN ]. And I'm Jen [ UNKNOWN ]. And today, we're here to with Charles [ UNKNOWN ], the CEO of [ UNKNOWN ] Thank you for having me on. Thanks for being here. So in addition to founding IOHK and serving as its chief executive, you were a co creator of a theorem and you co created Cardona, which is another blockchain project. So tell us what you're working on today at IOHK. So which case kind of a factory for cryptocurrencies and enter enterprise blockchain technology. So we're both a research company and an engineering company. On the research side, we engage directly with universities like Tokyo Tech and University of Edinburgh. And we write peer reviewed research papers, so we have graduate students post docs, professors. We've written now, more than 40 papers, more than 20 have gone through peer review. And those papers cover everything from privacy, like zero knowledge proofs and multiparty computations, to consensus protocols. To software topics like law and policy. On the engineering side we extract from those papers protocols. So those are things like CARDANO or enterprise projects like tracking traceability in the coffee market and Ethiopia or trying to figure out better ways to handle foundational topics like digital identity. For example. Where is your research being applied? So on the research side it's pretty global and broad and it's usually applied towards particular product lines, the enterprise ad we're mostly Pan African and Focus so we have offices for example in Ethiopia, we have some people we partner with like Cryptosavannah, and Uganda we've had a lot of great conversations with companies like Indlu down in South Africa And usually, those projects are three to seven year time horizon projects where we enter the jurisdiction, we train an entire cohort of developers. And then from that cohort, we then go do pilots in the six month to two year time horizon. And then we turn those pilots over into commercializable technology through a public private partnership. So for example that could be something as exotic as saying on that cup of coffee you get from Starbucks at some point in the future you'll have a QR code on the side. And you can scan it and know where that coffee bean came from that made the coffee. To something like does the person actually have a real college degree from a real university and being able to verify that credential using some sort of [ UNKNOWN ]. That's kind of the scope of those types of projects. Where do you think are some of the most promising applications for [ UNKNOWN ] on this technology? So Cordata is really trying to focus itself as next generation cryptocurrency. The Cardano ecosystem is all about saying How do we study these, really difficult problems of scale, problems [ UNKNOWN ] and problems of sustainability and study them with a very rigorous previewed academic approach. So, we start the university setting And then build it with techniques that you normally see at NASA or big companies that that basically use formal methods and functional programming. And so we take these things and then we try to apply it towards solving problems in the most hostile places you can imagine the developing world. So this is why we have a pan African view, we often say. Cardano is the financial operating system for the countries that don't have one. So we really wanna be the entity that solves the remittance problem. We really wanna be the protocol that solves the microfinance problem. Get those loans down from 35 % interest to 5 % interest. We'd really like to be able to find ways to extend this cryptocurrency protocols into environments that basically are offline. How do you use a cryptocurrency if you don't have access to the internet? How do you use a cryptocurrency if you only have sporadic ability to recharge your phone or your laptop? These are the kinds of problems and domains that we really wanna push this Third generation technology towards, so that we can get those other 3 billion people who aren't back back into the financial system so that they can prosper just like the rest of us. So you're a co- founder of Etherium, and it sounds like you're trying to, with Cardano, build it in a different way to kind of correct of correct some of the mistakes that Etherium made. I mean, what do you see As you know those primary problems and what will Cardano do differently? We like what bitcoin and ethereum have done we liked the concept of decentralization and we liked the concept of a programmable ledger but it needs to work for millions and billions of people and needs to get faster or at least stay at the same level of performance as you gain users imagine using netflix or facebook or any of these services we've come to know and love And during 5 o'clock or 6 o'clock when many people are watching, sadly you can no longer stream your video. It would be a bad user experience. But that's exactly where we are currently at with these replicated systems. When they get congested and clogged, regardless of who's doing it, the whole system basically stops working for everyone. So you really have to think outside of the box and develop fundamentally different protocols that allow you to scale Second, there's a big conversation that needs to be had about what does interoperability really mean? How are we gonna have our Bluetooth or Wi- Fi moment for our space? It would be a really terrible thing if every time you bought a headset, it would only work with one particular device, or every time you went to a hotel It would only connect to certain phones. The fact that people really painstakingly got standards pushed through is why we have so much consumer innovation. We're not gonna get there in the financial industry unless we have good standards to move value and information between all these different ledgers, whether that be your central bank ledger Whether that be your J. P. Morgan account, whether that be your Wells Fargo account, your credit card, your stock account, or your cryptocurrency. We have to be able to move value between these systems. And finally, on the sustainability side of things, we really do have a governance crisis because again, it's extremely difficult For us to figure out how are we going to evolve the systems to meet their needs 10 years in the future 20 years in the future without having a leader. We've never done this in human history, there's never been a case were under a large scale for a big problem we have somehow found a way to do it as a cooperative or as a as a bottom up community. We've always found some president or king or committee or group that we've endowed with special powers to guide us into the future. Well, this is the first time ever we're we're flirting with the idea of a corporation without a CEO a country without a president. And that's a very big challenge, and it's something that I think will consume the majority of the 21st century for the cryptocurrency space. But it we solve it, it's not just applicable for your money. It's applicable for your identity and, frankly, how you vote and make decisions. And eventually the companies of the future Now you've identified some of these challenges that come along with Bitcoin and Ethereum. But there are other entrepreneurs out there who are working on solutions to this. You know, telcos has a blockchain that they've used for Governance challenge has saved us is Trying to scale right. Meet the scaling challenges. So, what makes Cardano unique with respect to these other projects that are out there? Well, the first thing you have to understand is that we all kind of eat each others food. Most of the protocols in the space are open sourced and patent free. Ideas that Algorand has come up with or Snow White has come up with, or other research groups like Cornell or MIT, we've been able to be inspired by their research Adopt it, bring it into our system then share it with them learn from them. And together we end up building much stronger and more stable protocols. This is a stark contrast to develop use use things like iOS or with a theory and with Casper, or they kind of adopt this loan Samurai viewpoint like the loan Sam around the hill will defeat all the villains and this one brilliant founder, whether it be Dan or metallic Will lead a small group of crack engineers to somehow innovate and solve the big problem. Nothing gets down that way. If you look at going to the moon over a million people were involved in that mega project. if your gonna really change things You have to set an environment and a condition where people have the incentives to cooperate, the desire to cooperate, and each and every person can add their little piece of something, paint a beautiful picture and get it solved. And that's what we've fundamentally done with lot of the protocols of Cardano. You've raised the issue of governance several times You were a part of ethereum founding team. Now as I understand there is a difference of opinions there You could say that. Splitting going in a different direction. Tells us about that conflict. Well in that particular case there was a discussion about whether we were going to be we call it, the crypto Google, the crypto Mozilla discussion. So Mozilla is kind of a great open source not profit company. And Google's a great for- profit company that works on Open source software. So the question was, do we form Ethereum as a for- profit entity and we do we scale that to a point where we can release a protocol and then fund it through some sort of foundation and build that thing out? So a for- profit to not for- profit. Almost like a starting consensus before starting the Ethereum foundation. Or do we just set up a foundation and do an ICO, release it, and then see what happens. I argued for the for- profits side because the founders really didn't have an incentive to stick around if they weren't invested and they didn't have a financial incentive on the backend And that's frankly what ended up actually happening. Out of the founding set, all seven of the eight have left and the only one really left is metallic at the foundation. But that was a fight five years ago. And the theory is huge. It's number two, and it's growing rapidly and there's a good community there. So Reasonable people can disagree. And that was really a debate of corporate governance more so than protocol level debates like a theory and versus a theorem classic. The governance systems I'm talking about are how do you upgrade Bitcoin. For example a lot of huge decisions have to be made. Some people want to change the underlying cryptographic primitives and add things like snore snags. Some people want to add better lightning support better support for side chains and if these things are done it would make BitCoin a significantly better system for many many more people. On the other hand they do introduce more complexity and risk and could compromise the value that has already been created. So how do you decide without resulting in a BitCoin cash, or a BitCoin cash squared or something like that. You've also been hiring engineers in Ethiopia, tell us a little bit about the strategy behind that. So we have two ways we hire engineers in the company we either find them or we train them. We've actually run three courses. One in Athens, one in Barbados, and one in Ethiopia. The Ethiopia by far was the most meaningful and the largest, where we worked with the Ministry of Innovation and Technology and they sourced over three 300 candidates, all women, who were recent graduates of computer science, math, and physics. They applied to learn Haskell and Plutus, and basically blockchain technology. We filtered that set down to 23 and we sent down a German mathematician named [ UNKNOWN ]. And then we said, no you can't do it remotely, you have to drink the water and eat the food. You have to live there. He said okay. So he lived in Addis Ababa for three months and topped his class start to finish all 23 graduated [ UNKNOWN ] very rigorous and they put a lot into it. Some of them travelled over two hours a day One way on buses to get there we had four from Uganda that came up and one of them had to leave a year and a half year old daughter with her mom for three months didn't get to see her daughter for three months while they were there. I flew down to Ethiopia to graduate them and it was a very emotional event and it was just incredibly rewarding and it looks like We'll probably have the privilege of hiring all 23 of them. And they're going to work on enterprise projects all throughout Africa. That's excellent. Well, thank you so much for joining us, Charles .>> It's a lot of fun. Thank you, Robert Hackett .>> And I'm Jen Vietnam >>. And for more bouncing the ledger go to fortune. com. See you next time.

Balancing the Ledger: IOHK's Mission to Bring Crypto to All

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One of IOHK's projects is Cardano, a protocol which founder and CEO Charles Hoskinson calls a "financial operating system for the countries that don't have one."