Transcripts/CryptoBasic Podcast 101 Series Cardano

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CryptoBasic Podcast 101 Series: Cardano (February 19, 2018)[edit]

https://www.cryptobasicpodcast.com/home/cardano

Disclaimer[edit]

Transcripts are created and supported by community.
Text might contain some errors and inaccuracies - any help in fixing it is greatly appreciated.
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Original transcript author: Dennyb2010

Transcript[edit]

Mike = Michael Laake
Karim = Karim Baruque

https://www.cryptobasicpodcast.com/about-us/

Introduction[edit]

Mike:
Karim and Cardano sitting in a tree. H. O. S. K. I. N. S. O. N.

00:00:08

Karim:
Thank you that's deffinately going to the front.

[Music]

00:00:21

Mike:
And thanks again for tuning in to this very special episode of the crypto basic podcast 101 series on Cardano. I am Michael Laake on here with my favorite Morty.

00:00:33

Karim: Ahh Jeez.

00:00:34

Mike:
And while I may not be the one true Rick in life I will be for this episode. Before we move on, we really expect this to be a long gap so therefore we have some professional disclaimers to add.

00:00:46

Karim:
I guess since I identify a lot more with Jerry than Rick. I'm flattered that I'm considered a Morty there. It's like a good step.

00:00:55

Mike:
I’ll try to take it easy on you.

Disclaimer[edit]

00:00:57

Karim:
Thank you thank you. But yeah, so on to the disclaimer; as you guys know during our 101 series we do our best to give you an objective look at different points, different projects and sometimes just concepts like how to move your money, how to keep your money safe. We have every intention of doing that today. We want to come to you with our most objective opinion. However, I definitely want to give a disclaimer: I love this project! I believe in its structure, its methodology and its vision, more than any project in this field. I am extremely biased, even in the way that they do things simply appeals to somebody with my world view. So even though I will be trying my best to give you objective quantifiable reasons why I believe what I believe about this project for the next, however long this episode last, you need to understand that you're listening to someone who is fascinated by this project.

00:01:55

Mike:
And yeh. A little bit of details from behind the scenes: we knew that there was many things we need to get out right away. Many of the non coin specific, you know, 101, those are things that were necessary. And once we got outside of Ethereum, Bitcoin, exchanges, the very basics, now we're starting to explore the wide ocean. We have everything in front of us. We are deciding what we want to push forward. So while I know that there's going to be a couple things were not a big fan of, this is the one that got placed in this order of recording because of how important it is to us.

00:02:32

Karim:
Our bias is on the table. I do own Cardano. I neither own enough Cardano for you to be able to influence my portfolio nor does a podcast get enough listeners for us to be able to influence the price, so the fact that I own Cardano it doesn't really have anything to do with this. We want to share with you why this project is such a beautiful thing in this space.

Visions and goals of the project[edit]

00:02:53

Mike:
So let's go ahead and start with the visions and goals of this project. I know for a fact that they like to call themselves the third generation, and to my best understanding they’re equating Bitcoin as being the first generation. Ethereum as being the second generation and Cardano as the next step. The next evolution. The project that's learning from all the mistakes of the previous generations. Is that kind of how you see this?

00:03:22

Karim:
Yeah. That is my understanding as well, or at least that is the vision that they present themselves. The assumption here, or the framework, is that, when you look at Bitcoin, that would be considered your first generation blockchain, right?! Bitcoin was essentially a proof of concept that a digital currency could even exist. That you could have a trust-less system. That it would be distributed without a single point of failure. That you could address the double spend problem to know that money isn’t just being copied. All these little problems which were solved in the package of Bitcoin, would represent the first generation blockchain - the beginning. But, as is often described, Bitcoin is not very smart. The transactions are simple. Ethereum essentially created a platform that could be used by developers all over the world to create decentralized applications, essentially without having to create a whole new blockchain, have a protocol or system in place that can be used to develop just decentralized applications.

00:04:32

Karim:
But, we have found different problems that arise, like the scalability problems we see with Bitcoin or with Ethereum, the fact that actually using in it. And solidity was very difficult to do. So, by solving the problems that haven't been addressed yet, like some of the ones we just discussed Cardano aims to be the, first, third generation blockchain. Now whether or not they are able to pull it off and they can actually live up to that claim will remain to be seen. And the burden is on them to prove it. And, we'll see, but the goal is essentially to, you know, be able to achieve critical mass, without a game like crypto kitties blowing up your network or just establishing a sustainability model that ensures going into the distant future this project can continue to grow.

00:05:23

Mike:
Yeah that's a great point Karim. So let's move on to the philosophy and values of the team.

Cardano's motto & their peer review process[edit]

00:05:29

Karim:
This is where we start seeing how Cardano separates itself from the rest of the pack. First of all is their motto. And this is definitely the best part their motto is processes over people. And what they mean by that is, let's focus on what processes we take to achieve excellence as opposed to what genius can lead the development of our team. And I think there's a lot of value in that because we've kind of developed a hero culture in cryptocurrency that's kind of similar to the great man theory of history, where everything is done by these amazing people, you know, the Alexander the Greats or whatever. So we’ll want the next Satoshi, the next Vitalik. But really, I think that Cardano recognizes that the real tough problems in the big advancements are actually be being done by collaborative teams of people that are following rigorous procedures to perfect their craft. So, process over people means: We don't create hero worship about around developers, we establish rigorous guidelines to develop our project.

00:06:35

Karim:
Cardano is the only project that is submitting all of their research and development through a peer review process. For those of you that aren't familiar, peer review is the academic process where you go to higher levels, say, at colleges and universities, where in different fields, from physics, to chemistry, people who have an idea are proposing writing papers and then experts in that field are the ones that are criticizing those papers. So, now, I write a white paper, I put it on reddit and then everybody who wants to buy my coin says, well, what an amazing white paper. No! You write a paper on cryptography and then multiple people who do cryptography for a living, and who analyze these papers for a living, read it to find holes in it. With the idea that you're going to come up with a better product.

00:07:26

Mike:
To me, what that suggests is that we know that we are going to be the best and we want to be the best from the beginning and we want to make sure that we have the least amount of complications along the way. And we're not afraid to put ourselves out there and be vulnerable and be willing to be told the were wrong. And I think that's one of my favorite qualities in humans. So like when you have an entire business with that philosophy, I think that's very admirable.

00:07:53

Karim:
Certainly! And I think even further than that, Mike. It's about understanding that going through a rigorous peer review process is the best way to actually produce cutting edge systems at the highest level. And you can see this mentality of making a bigger commitment in time and resources up front, throughout different aspects of the project. So let me give you a couple of examples, okay?! So they do everything through peer review. Great! They also use Haskell programming language. So what is Haskell? Have to look into that. Well, the beautiful thing about Haskell is that it is extremely concise. It is very simple and elegant and at the same time very logical and less likely to produce errors. When I was reading about this, just trying to research Haskell broadly speaking because many of the interviews for example Charles will brag about using Haskell so I wanted to double check, is this really that unique of a programming language? And sure enough. I'm finding articles where they're talking about how Haskell changes the way you think, because it forces you to code in simple, unbreakable logical ways. I have even read a couple of articles from programmers that said their code actually got shorter as they added features, simply because they were forced to come up with better more general ways to re write little parts of the code that would make it more reusable. In one of the things that's interesting is if you go look at what a particular coding line might look like.

Use of formal methods to check their protocol[edit]

00:09:24

Karim:
It's so small in Haskell. Compared to a lot of these other programming languages, it's just so much simpler and clean. In addition to that, they're using something called formal methods to check their protocol. So what is formal methods? It's using very rigorous mathematical models to build software and hardware in order to find out what fault it could have. It's very slow, very deliberate, but it allows you to have a certain level of certainty of what you're creating. There's a very famous Dutch computer scientist named, Edsger Dijkstra, who is a legend in the programming world. And one of his most famous quotes is program testing can be used to show the presence of bugs, but never to show their absence. And what that essentially means is when you test a software you're trying to find a particular flaw buty you can't find a flaw for something never tested for. A test by definition requires you to carry out the test, but if instead, you can establish everything in a mathematical model, then you can start changing variables around to see how everything response. And in continuation with is, one of the additional elements of quality assurance that they can implement is something called the bisimulation proof, which essentially make sure that the code is behaving as intended and that what you as a programmer wrote down is actually using the correct output on the machines that it's being run on. In part of the reason why this has a lot of value is that the use of something like formal methods and formal verification can yield what is known as high insurance software.

00:11:08

Karim:
And this is when you're talking about industries where reliability is paramount. We're talking things like defense, aerospace, engineering, air traffic management, nuclear reactors, medical machinery. We are to talking about industries were failure can result in the loss of life and therefore it is not handled lightly. Or not always with a life or death situation, but even, for example, an institution like NASA sending the Mars rover opportunity, which represented a two point five billion dollar investment. So if you're going to take 2.5 billion dollars in launching a rocket to another planet, you need to make sure that when he gets there it's actually going to work the way it's supposed to. And you can't just have the bug because you can't walk up to it and reboot it. So to give you an example of what high assurance software and hardware can yield: Opportunity was expected to last three months when it landed in Mars in 2004. Three months. It's been over a decade and it's going strong. So overall you can see that IOHK is making significant time and resource investment in order to me Cardano a cutting edge protocol in the years to come.

00:12:29

Mike:
Yeah with that in mind, I guess in my research I was a little bit surprised at how much centralized, in a way, Cardano and NEO where for example. And the more thought I put into it, I really decided that I think this is the real way to go, at this point in the space. And, one of the exciting things to me is that, if you are so confident and comfortable with what you're putting out there, being willing to go through these formal government regulations is quite a task and being up to that challenges says a lot to me.

Cardano currently in the bootstrapping phase[edit]

00:13:08

Karim:
Currently I would say that you could argue Cardano is relatively centralized because they're proof of stake and everything is functioning internally because they are in the development phase that they called the bootstrapping phase where they're making sure everything is working properly as they slowly released to the public. NEO will probably remain a little bit more centralized, but the main point that you're making, which is, these two projects, projects like NEO and Cardano, are looking to seriously engage real world regulations. Yeh, that's a vision that understands if we're going to interact with the legacy world, the banks, the governments, to Deeds, the society, well, then you got to play by society's rules and if you don't wanna play by society's rules then you might not be a major player in society.

The problems that Cardano protocal is going to solve[edit]

00:13:54

Mike:
Couldn't agree more. So let's move on to the problems that Cardano was going to solve. I know there's three topics we’re to cover here. Want you to start in on scalability.

Scalability[edit]

00:14:05

Karim:
As more users join these networks it becomes more difficult to operate, and not just because there's more people trying to get transactions like in Bitcoin, but also the blocks become bigger, the block chains themselves become harder to store, So one of the things that Cardano wants to say is how do we become scalable. And in their attempt to do that they're going to pursue a strategy that ensures as the system gains users, it actually gain speed. So it's essentially functioning like bit torrent, is the example that's often used - the more people that participate in the network, the more resources the network gets and therefore the more efficient it becomes. You cannot have it, like Bitcoin is currently, where the more users the more congested the network becomes. It will never scale that way.

00:14:52

Mike:
I’m curious on your thought. This is gonna be slightly off topic but have you looked enough into the IOTA tangled for direct comparison here.

00:15:00

Karim:
I have looked into the IOTA tangle. When you say a direct comparison, what do you mean?

00:15:07

Mike:
So it's my understanding that on one of the largest benefits to IOTA is that as the scalability grows the more users involved the quicker the transactions. It it's kind of a similar thing but I guess I I probably haven't dove enough into exactly what that means from a coating standpoint. I was wondering if you if you add I mean because whether we like it or not there's always competition the space so.

00:15:07

Karim:
No yeah of course of course. I think it's a fair question. So here's the answer: first of all I have to preface this by saying that I'm neither a mathematician or coder right?! So we're going base of of the available literature online and our ability to understand it at a kind of pedestrian level.

00:15:52

Mike:
For sure.

00:15:53

Karim:
So IOTA looks like an amazing project and they have one of the most unique concepts. The theory or logic behind the tangle itself seems solid as far as one can understand it without understanding the mathematics. Now one of the differences that must be mentioned is that an IOTA every single note in the network is participating in a verification process, so its fee-less transactions and they should be infinitely scalable but there is a higher burden on the individual even if they're not a miner or the verifier even if they're just a user but more importantly I think that this is the perfect example of the value of peer review. Because the answer to your question is I don't know I don't know how the underlying code or the cryptographic proves of Ouroboros compare to the IOTA tangle. I just don't have that level of expertise but here's what I do now. I know that when IOHK was finished with their Ouroboros paper they try to get it published at the symposium on security and privacy in Oakland which is essentially the highest ranking or one of the most prestigious conferences on cryptography on the planet.

00:17:12

Karim:
And they got rejected because it's so difficult. The response that wasn't just complaining it's actually the revision process of figuring out why you're getting rejected. Why these professors or reviewers are saying okay this is not good enough to be published in the journal and guess what just a little bit later in the year indie advances in cryptography which is crypto twenty seventeen in Santa Barbara they did get published. They got published and right now to this day you could go to that journal, open it up its in pages…I have it written here, it's pages three fifty seven to three eighty eight. Is the actual publication of the Ouroboros paper in a major cryptographic journal.

00:17:52

Karim:
By comparison, when MIT found a possible flaw in the code that IOTA was using in their protocol the response was much more different. Essentially IOTA claim that the law was put there on purpose as a copy right mechanism. It's a much more secretive way of saying, well you know, we basically don't want to show the real world how it all works and will even put bugs in the system so that nobody can copy us. And you know what? That's fine and might be valid. Maybe it was just a matter of copyright. I don't have the knowledge or expertise to make that call, but I do know that a bunch of cryptographic experts who have made entire careers out of this field look at the Ouroboros paper gave them feedback and that eventually another panel of cryptographic experts reviewed it, accepted, published it, is now a part of the field. It is now in conversation with the entire academic world in therefore me as a layman, is somebody who doesn't really know, will much rather put my trust behind that project.

Interoperability[edit]

00:19:02

Mike:
Yeah thanks for that. I mean I know I like to play on the spot sometimes. I know that was a uh… I do appreciate that was a great answer and it was a little more advanced than I would have been so very much appreciated there. So the the inter operability of the Cardano project, one of the fascinating things that they're trying to accomplish is communication through various methods and what I mean by communication is right now we have a situation where Bitcoin, Ethereum, they they can't really interact with each other. They cannot exist coherently. They cannot move from one block to the next and one of the examples that I that I saw I had to do with, you know, let's say you you started ICO and you get a bunch of money and you try to withdraw into the bank well then now this bank uses a complete different language, use a complete different style and they're gonna want to know where this money came from. There's just so many like legal regulatory issues that exist that Cardano is trying to patch up. So can you can you just explain that a little bit.

00:20:12

Karim:
Yeah, definitely! I mean in the bank that you mentioned is ruled by different regulations that it has to adhere to, right?! But specifically so it's important to clarify here for the audience that we just moved on to the second problem that Cardano’s trying to address right - inter operability in general. And it's basically the realisation that we've really moved on from the idea that one coin is going to win, right?! Like I I feel like that mentality has more or less disappeared. People realise that what's going to happen is there's going to be an ever growing and expanding and changing ecosystem of currencies and platforms that are going to need to interact with each other. One of the main realisations of the Cardano project is that what you have right now, since all the systems exist with real money real assets like Bitcoin, Ethereum banks but they can't communicate so all the value all the wealth is essentially isolated in islands, right?! So there's gonna be a lot of power to whatever system entity platform is able to be the on and off ramps, so to speak. The one that goes to Ethereum and is able to transfer value to Bitcoin. That, on and off, right there. That's going to be essentially a king maker.

00:21:28

Mike:
Would you be willing to say they're trying to be Christopher Columbus.

00:21:31

Karim:
Would I be… I am willing to say that they're trying to be the ocean that took Christopher Columbus to South America. Just to show you how ambitious they are. They want to meet their wallet, there, you know, the wallet that operates within their system called the Daedalus wallet. They want to make it so that you can store multiple currencies in there. It's kind of like having a ledger so to speak - but within their system.

00:21:56

Mike:
If they. If they get that to work obviously that would be very welcome to the community and, you know, I would imagine it would be a lot safer than some of the options we currently have.

00:22:04

Karim:
Yeah right now the on and off ramps are exchanges which are centralized, often corrupt, or high risk positions. So this would be a better opportunity. By the way it's not just about transferring assets, they're really going for the inter operability to a higher level like with smart contracts. They want to make it so that you can run a smart contract on the Ethereum platform essentially through the Cardano protocol because it communicates with the Ethereum virtual machine so efficiently. This is an ambitious project, Mike!

Sustainability[edit]

00:22:34

Mike:
Right. I think, uh, Hoskinson said it was, uh, he wants to be the roads that connects everything and he wants to be what is used to, you know, connect different places and and yes it is ambitious for sure but you know everything that I've seen, everything that I read, it it sounds like they have a really good chance to make this work. So the last problem that you know it was it was trying to solve. One of the problems with many of the of the projects out there is the sustainability factor and the best way that I would describe that: some of the models whether it be through raising money for venture capital whether it's running and ICO. Whether it's taking personal donations so on and so forth. No matter how much money you come into its limited. No matter how much resources you gain it's limited. So they're trying to do a treasury system and I think that what this does if we're gonna have a project that wants to go from one million to one billion we also need to have essentially unlimited resources that scale along with the sustainability and you know I I think that these types of of ideas are what's going to separate this from other projects and a DASH has a great treasury system. I’m sure there's others that I can't really think about from the top my head. How do you see the sustainability working for them?

00:24:05

Karim:
Yeah I mean that's the third problem they're trying to address and it's not a coincidence that DASH has a treasury model. It's precisely part of Cardano’s general philosophy where they looked at the space and they saw what was working. Any of our listeners that I listened to our DASH 101 episodes. I know it was one of the first currencies we did will remember that the treasury was the things I loved about dash the most, because it created a level of independence, a level of, well we were using the word sustainability but it really creates a unique opportunity where you can work for a blockchain the blockchain consisting itself you can market itself it can develop itself it can grow I mean that's like a genuine invention in humanity, right?! A decentralized system that can sustain itself through a treasure model. It really is incredible and Cardano did an entire analysis of the DASH treasury system what they think works, what they don't think works and they're planning on implementing that. And then the second question is how do we govern ourselves like in DASH it’s just a master noodes voting so Cardano is essentially taking a couple of more subtle and complicated approaches as to how you reach that level of governance over those funds and over the direction of the project. But I know that this particular leg, the sustainability leg, we’ll cover again towards the end of the episode in more detail. I know that the following stages we’re gonna focus more and scalability and inter operability but another point I made during the dash episode another beautiful thing about having the treasury system is that it allows you to crowd sourced from the entire plant and that's huge. The fact that a Blockchain in itself can crowd source…. because anybody can submit a proposal. Anybody


00:25:48

Mike:
Right. For sure. And and being able to speak to open source of the world to say how do you want to improve this project, the legacy, the the other problems: the scalability the sustainability? If you have a an idea to do that they’re gonna sit down there to consider and they're gonna see if they can make it happen. So let's move on to the history of Cardano. This is. This is gonna be all you buddy. Just just go for it.

The history of Cardano[edit]

00:26:16

Karim:
Yeah we're gonna get a little bit into the history here and it's worth noting the leading figure here being Charles Hoskinson. He is a mathematician was a professor when he found out about cryptocurrency. Started getting involved by teaching a course on it. Really got his feet wet by working just for a little bit in BitShares but really became known as one of the co founders of Ethereum with Vitalik Buterian and he was a major part of that program. I believe he was actually the CEO at one point, but after the DAO hack and a difference in philosophy of how that situation should be handled he ended up leaving Ethereum and luckily, I assume, with a lot of the proceeds from that experience he decided that he wanted to really focus on actually building Blockchains for a living but he wanted to professionalise this space a little bit. So he founded a company called Input Output Hong Kong, which is currently the company that has the development contract with Cardano. So IOHK now has as their primary focus, or their primary contract, the Cardano protocol. Even though they still do some work on Ethereum Classic and also ZCash.

00:27:32

Karim:
And Cardano was started being developed in 2015. And a lot of these white papers they come with a solution to the problem, they come with an equation, they get ready to go and this was started really a little bit differently it's more like engineers and academic sitting down starting from the ground up trying to define everything from scratch and build layer by layer. But anyway, so they developed Cardano in… they start developing Cardano in 2015. It’s named after Gerolamo Cardano. We're gonna have a tiny history to bits during the show because this is just how they decided to name everything. Everything means something, everything is a reference to previous contributors. It really is…

Mike:
I can definitely… I can definitely say as I was as I was trying to understand the the complexities of this project I felt like Karim was laughing everytime it smiling every time that you know one of the key words came up with the names came up it just felt like everything represented something.

00:28:33

Karim:
It's beautiful Mikey.

00:28:34

Mike:
It's almost as if they have their own analogies built into every, every issue that they confront.

Karim:
It's a recognition of our own history. To me all these little references, all these little images to those who came before us is a recognition that we stand on the shoulders of giants. So it is beautiful because it's a nod to the past and in a way to me it's also are not to our future but anyway we're definitely going off track. It's just a little beautiful thing about the little elegance of their project but it was named after Gerolamo Cardano who was physician, biologist, astronomer, chemist, philosopher. You're gonna love this Mikey, the guy was a math wizard and an amazing gambler. Got literally exiled from a ton of places because he was taking people's money.

00:29:24

Mike:
Do you have any good stories?

00:29:25

Karim:
I do have. Well, I don't know how much of a story this is but his.

00:29:25

Mike:
Or actually I'd rather an urban myth, or something unconfirmed.

00:29:33

Karim:
I'll tell you - No - I’ll tell you a couple of facts. Charles seems to love the story because I heard hear him say it in two interviews but he loves the fact that he he was the only person to treat the Pope as a doctor and also be excommunicated by the church. The guy invented what would eventually become the drive shaft. He was the first person to use negative numbers systematically or systematic use of negative numbers in Europe. One of the first people to recognize the existence of imaginary numbers. And he wrote a book on gambling that is considered the first treatment of probability.


Mike:
What era was he in?

00:30:07

Karim:
He's like in the fifteen hundreds. O. and just to add to the fact that he's a genius. He also wrote a book where he was explaining that deaf people are any idiots and that we should teach them and that they can learn to read and write and stuff like that. Gives an idea of the philosophy of the times and how ahead of his time this guy was.

00:30:23

Mike:
That's very interesting.

About Cardano's currency called ADA[edit]

00:30:25

Karim:
And then the currency many of you probably noticed that the currency is called ADA, and yeah that's also named after somebody that's ADA Lovelace, the daughter of Lord Byron and she's considered the first computer programmer because she developed kind of like a program for something called the analytical engine so very beautiful very interesting.

00:30:46

Mike:
Yeah I I've one of the first things I noticed when I was learning about this was I I was surprised that there was Cardano and then what I thought was ADA and then I also noticed that there is the letters ADA in Cardano in the in the appropriate order so I was wondering if they were just taking out certain letters to form ADA but you know I was I was listing some interviews and it was only referred to as ADA I thought that was very interesting and certainly I can have a poker analogy to add in here and I don't know if you'll find this interesting or not you can cut it out if you don’t, but in poker if somebody has a very very very good hand, their brain is thinking about really silly things like how like how they're going to spend the money and like they're really paying attention to conversations that are you know on this on the next table over it's almost as if, like I can compare this, to they know that they're so good, they're just like, let's just come up with some cool names that remind us how far we're going to go with this and you know I idolize the people that it that are going to bring this vision to truth almost. That make any sense?

00:31:54

Karim:
I would say that they're performing so well overall in there so properly staffed. So well organized, that they have the time to focus on the beauty and elegance of their product, which is awesome. And now a little extra references since we’re talking about ADA: the smallest unit of ADA, like essentially the equivalence of the Satoshi, but Cardano a one millionth of an ada, is called a Loveless, which is ADA Lovelace.

00:32:20

Mike:
And that is.. is it a 8 decimal points

00:32:24

Karim:
It’s six decimals.

00:32:25

Mike:
So it only breaks down to 6 decimals.

00:32:26

Karim:
Yeah it's it's one one millionth of an ADA I believe

00:32:29

Mike:
Good to know. I can't wait to start counting in those. That day ever come, I’d be quite happy.

00:32:34

Karim:
hahaha. Me too.

Features and structures of the Cardano project[edit]

00:32:35

Mike:
All right is let's go into a little more detail of the features and structures of this project. I like the word Ouroboros. What can you tell us about it?

Ouroboros[edit]

00:32:45

Karim:
Yeah. Well, you know, like everything in Cardano it mean something. The Ouroboros I bet you've probably seen it. It's that little it's the ancient symbol where it's like a serpent or a dragon that's eating its own tail and it's supposed to represent infinity, cyclicality, introspection. I don't know exactly how they meant it here but I mean Ouroboros is de core or the heart of the Cardano projects so maybe infinity, introspection, cyclicality is appropriate.

00:33:13

Mike:
I do. I do. That symbol does sound familiar. I'm pretty sure I've seen it before.


00:33:17

Karim:
Yeah for sure you've seen it. But anyway, you know, to get into the actual nitty gritty of it Ouroboros is what is known as the settlement layer of Cardano. They basically made the decision to build Cardano modularly. Essentially, instead of trying to accomplish all at once, trying to do everything from the smart contracts to any foreseeable application, the problem with that is that the more complicated the goal you're trying to achieve is, the more steps it has and therefore the more susceptible to failure is. So what Cardano has decided to do is to basically go by layers and make those layers as simple and structurally sound as possible and then if you need added functionality you build on top of that on something that can be attached or removed to that part of the protocol. So Ouroboros is the very core of it and it's what most people would recognize is the equivalent of Bitcoin. Is the actual later where all the assets exist, where all the value exist, and where you're essentially just transacting from one person to another in a secure way. The Ouroboros protocol is based off of a paper that was written between I. O. H. K. the university of Edinburgh the university of Athens University of Connecticut and it was called Ouroboros a provably secure proof of stake Blockchain Protocol. So I'm about to go into little tangent. Do you want to indulge me with a little tangent before we move on?

00:34:47

Mike:
You kept saying tangent but I kept hearing tangerine.

00:34:50

Karim:
hahaha. No, I'm not going into a tangerine, I promise.

00:34:54

Mike:
Well I guess, before you move on, what is the kind of plan for their proof of stake. Have you gone into this part already or do you want to wait.

00:35:02

Karim:
Uh, we can wait. I'll definitely go into further detail about how they envision the proof of steak working.

00:35:08

Mike:
That's okay. Then the tangerine away.

00:35:09

Karim:
Tangerine away. Here I go. So I'm gonna take this tangent with a very specific goal in mind. It's very easy when I say that Cardano is at a unique level of performance because they know their peer reviewed and they're interacting with different teams in different universities and it's just easy to hear that and let it roll off your back. So I want to read you some of the accomplishments of just one guy. His name is Aggelos Kiayias. He's basically the lead author of their Ouroboros paper. This guy's a cyber security chair and director of blockchain technology laboratories at Edinburgh University. Is a researcher in computer security, information security, applied cryptography, distributed systems. He's been funded by, so that means the following institutions have given this guy money to do research because he's so competent and his teems are competent, he's been is funded by the European Research Council, the National Science Foundation, the department of homeland security, the National Institute of standards and technology, he has a Marie Curie fellowship an NSF career award, a Fulbright fellowship and this paper was published in the annual international cryptology conference all of this is one of the main talented and uniquely qualified participants of this project. This isn't just some guy writing of white paper and saying that the solved every problem in the world. This is a team of the most talented, compotent minds who have made an entire career on this field, working together collaborative to solve problems.

00:36:44

Mike:
I wanna.. Actually I kind of have a little tangent of my own. I want to go into this with you and if there is a decent chance we decide to cut this out of this episode but I think this conversation could be useful are maybe somewhere else down the line used. You went ahead and and the knowledge the department of homeland security is that what I understood?


00:37:02

Karim:
Yes he… the department of homeland security has funded one of these researchers.

00:37:06

Mike:
So riddle me this Batman. The department of homeland security has definitely known about this for a very long time. They've known about blockchain, they’ve known about Bitcoin. They've known about all the very detailed portions of this sector for very long time and I know it's very difficult to get governing bodies to move because there's so many moving parts involved. Yo have to get so much, you know, so many people the same page. Like do you see the governments truly just like building their own thing behind the scenes or do you think…. I dont’ t see the United States as the type of country that's going to say like well Cardano, you're doing such an awesome job why don't you just like come build an office here in like keep doing cool stuff like I just don’t. I just don't see it working that way.

00:37:53

Karim:
Well you know because I think you're looking at it too.. It's to binary. You know, it's not going to be one or the other. For example, fine. If we could take the department of homeland security: but I'm going to go on a limb and say that you might put the CIA or the NSA in a similar category or the department of defense etcetera, essentially large government institutions. And the reality is that these institutions already do lots of business with universities or with large programs like Microsoft or Amazon or things like that from computing or whatever. So one thing is that individual departments might still find it very worthwhile to fund research. In a lot of these fields they might find it very valuable to contract the blockchain. I don't know that's their direction but as long as they're not actively shutting it down then I don't really see a problem with it.

00:38:45

Mike:
Well thank you for your correspondence Karim. I know you are a person who is very familiar with the part of homeland security so I appreciate your insight on that.


00:38:54

Karim:
Brent would be proud of you. Oh just so that everybody because I am not American. That's the joke, guys.

00:39:03

Mike:
Well let's just say I plan on flying with Karim in June or July and it's it's a little scary I'll just put that way.

00:39:12

Karim:
hahahaha. I fly all the time people.

00:39:15

Mike:
I'm just kidding. I'm just kidding.

00:39:16

Karim:
I know. I know. I know. I know Brent’s gotten to you.

Cardano's roadmap phases[edit]

00:39:19

Mike:
So lets move along to the roadmap for Cardano. There’s a few things in the work with plenty of moving parts. So Karim can you give us an introduction to that?

The Byron phase[edit]

00:39:27

Karim:
Essentially their roadmap is broken down into individual phases. The first phase was Byron. It’s named after Lord Byron, famous poet. This is where their original fundamental layer or was created the original paper for Ouroboros was rejected six times. It went to six revisions while they were trying to get a peer review through conferences, it finally got there. It's all completely new code from scratch. It’ s not a fork of any other Blockchain and it separates the accounting layer from all the other computational or coding layers. So this is where assets are going to live in the Blockchain. That has already been released, so they've already finished that development stage. Right now they are in the process of their second development stage which is called Shelly.


00:40:16

Mike:
Just to just to pause you for a second here. This is what you're referring to by modular design. They're trying to split up the project in the many many projects and because they're trying to take on such a wide variety of tasks, they're trying to complete one fully and there before moving on the next. That kind of what you mean?

00:40:36

Karim:
Yeah the settlement layer of Cardano, the one with the assets live exist independently of de lay years where essentially smart contracts would be created and even that exists independently of the treasury system. The idea here is that as this project encounters new problems or needs to have new developments, you can essentially to extract plug and play upgrade individual parts without having to mess around with what already works.

00:41:08

Mike:
I was trying to think of a good example to give. I was thinking it will be… The first place I want to go is like a tank or submarine. I kept going to military places for some reason.

00:41:18

Karim:
Yeah, but look. If you if you're creating a computer, if you're creating a car, if you're creating whatever, you're not trying to do everything from scratch in the same place and try to do it like some kind of achievement all at once. No, what you do is you have your tires made by a company, that makes sure the tires don’ t explode. You have your engine made specifically in this part you have this done, and then you assemble it all together. So I guess in that sense you could say that it's kind of modular.

00:41:41

Mike:
Ok. So like a car repair shop. I kind of get what your’ re saying there. let's let's go into the Shelley.

The Shelly phase[edit]

00:41:48

Karim:
Yeah. So Shelly cool reference again. They consider Shelly the decentralization of Cardano. Remember earlier you said Cardano is still relatively centralized? Right so that's essentially because they're kind of bootstrapping you know. They're getting it going and they're going to need to make a couple of changes. Shelley is the decentralization of Cardano into the ecosystem. Where essentially you really go on automatic. And it's a cool name because Shelly was this idealistic anti-power poet. You know, he wrote one of the most influential works in the mask of anarchy which is the foundation of nonviolence resistance. So this is really cool. They're like a ‘ for the people poet, for the people’ stage of the development, okay?! Okay so the way that Cardano addresses the proof of stake is: first of all they divide the world into something called ‘epochs’ . Instead of just blocks, you think of this bigger thing that is called an epoch and it has a bunch of individual slots. We can think of all those little slots kind of similar to blocks and the system uses the randomized algorithm which, you know, a lot of thought that has gone into it to make sure it's fair and game theory mechanics and all that stuff. But essentially, based on the proportionality of the stake, based on how much stake somebody has, that's their probability of winning a lottery that essentially allows and to be a slot leader. So each slot in an epoch is a slot leader and functions essentially as the miner. They have the ability to create the transactions in that block. Then all of the transaction fees for all of the slots in that epoch are accumulated, put into a virtual pool and then distributed amongst all the participants. And part of the reason why it's done like this is that, I'm assuming that this was in order to maintain efficiency, but the epochs can actually have empty slots. It's possible that one of the slots here and there doesn't actually have any transactions, but the majority of slots in an epoch are filled by actual blocks that were assigned to somebody that functions the role of a miner. So that's more or less how the proof of stake system works. I can go into further detail. I don't know if you’ve any questions. I want to pause and give you a chance.

Staking in Shelly phase[edit]

00:44:09

Mike:
I guess my question would be: are the epochs going to be their version of a master node?

00:44:16

Karim:
No no no. An epoch? You know, obviously I hope I'm not butchering this but from what I've read so far, essentially a slot it's kind of like a mini block and an epoch is kinda like one big block - because it's a collection of little blocks

00:44:30

Mike:
Of slots

00:44:31

Karim:
Yeh, exactly. It’s a collection of slots. What I believe that they're going for, long term, is to be able to then take all that data and collapse it and to be able to draw through cryptographic processes the, kind of like the meta data, so that you know that it's correct but you don't actually have to store all that data. But yeh, it's essentially a lottery system which gives you an opportunity to participate in an election that allows you to be a slot leader and then when you're elected for that slot you essentially function like a miner - and then you're going to pool your transaction fees with all the other slots in that epoch and then it's going to be distributed amongst the participants. What's interesting is they're staking mechanism is actually working already, it's just that all of the lotteries has been assigned to internal server. So they have full control right now. And there not really collecting transaction fees. They're collecting them, but they're not accumulating them - it’s just gonna get burnt. So this is just for them to maintain control while they release it.

00:45:29

Mike:
Any other parts of the proof of stake that you want to include? Is there… Do they they have any plans for certain types of of wallets to do your proof of stake in? Have they made any types of announcements on what type of return on investment you could expect or.

00:45:44

Karim:
Right. Okay. So they haven't made an announcement on what type of return on investment you should expect, but I don't think they've even announced how much is gonna go to the treasury. So definitely, return on investment is not something that I can comment on. I can comment on a couple of other things. Number one: a comment that I can make about this system is that they're very proud of the fact that it's the first provably secure proof of stake. And what they mean by that is that it's a proof of stake protocol which has been submitted to a peer review journal and has been essentially admitted to be safe under the parameters that are established. The second thing is that it's the formal methods essentially mathematical modelling shows that as long as fifty percent plus one of the actors are honest that it's going to be essentially fail safe. And then as far as… I know you're specifically interested in like how you can participate. I don't think that they've made any announcements as far as minimum requirements. There's not going to be a master node, like in DASH, but it might be that if you don't have enough ADA you're not gonna get elections or it's not really gonna be worth your time to stake, but you can participate in mining, uh, not mining pools, but staking pools. So that is something that they're expecting to implement. And then you had one additional question about…

00:46:58

Karim:
What were your three questions, because I feel like I missed one.

00:47:02

Mike:
Maybe a minimum on number to either be a slot leader or to actually steak.

00:47:09

Karim:
So somebody did ask Charles that question and he gave an answer which makes me think that there’ s not necessarily going to be a minimum, because he said, oh you know and DASH and in a lot of these currency


00:47:19

Mike:
Most proof of stake doesn't have a minimum, but I just wanted to ask.

00:47:27

Karim:
Right. And he said that he wants to avoid a situation where you have, quote on quote, a special classes. You know, like a master node is bigger than other people or more important.

00:47:29

Mike:
So, let’s… How many master nodes are there for DASH? Is there a set number, or is it just who ever accumulate?

00:47:37

Karim:
I believe it's like a miner where anybody can hop in, but you need that initial investment. So it becomes harder.

00:47:43

Mike:
All right! So, it's definitely to be worthwhile to look into. I'm a big fan of proof of stake in general. I'm very glad that one of my favorite coins adopting this and I think that this is much bigger part of the future then proof of work is. I guess like when it comes to the transaction fees, you know obviously we don't know yet what is going to the treasury but have they said anything about what the transaction fees are, or how many of them are going to go to this slot leaders or… how does that all work?

00:48:17

Karim:
Yeah. It's it's actually really interesting. First they created any minimum constant for transaction fees and their reasonings for having a minimum transaction fee, for sustainability, is essentially that it's the only income that the people running full nodes are gonna have, and the stakers, because there's no block reward, right?! So its members, a collection of all the transaction fees. They also say that it's a form of security. It's really interesting because it prevents DDOS attacks (Distributed Denial Of Service) were essentially somebody tries to flood the network with a bunch of dummy transactions. So by creating minimal transaction fees you can actually make it impossibly expensive to try to do that type of of attack on the network. So they use a constant and they make a function on the transaction itself, like how many bytes it requires and that will essentially become the transaction fee. But like you said it hasn't really been specific because we don't know how much will go to the treasury and how much will go to the stakers.

00:49:19

Mike:
Well I certainly look forward to that update. You know. I’m certainly a big fan of it. So why don't we move on to the next part. I believe this one has to do with smart contracts.

The Goguen phase[edit]

00:49:31

Karim:
The next developmental update after that is called Goguen and this one I couldn't confirm but I I think it was named after Joseph Goguen, the computer scientists who made a lot of contributions with OBG programming languages, a bunch of theories and universal logical. This like high level math but essentially they want to do two things, you know. This is kinda inter operability section. First they're creating something called IELE, which is a next generation virtual machine, just kind of like the Ethereum virtual machine for smart contracts. IELE wants to be able to have it’s own smart contracts and coding language. They are creating something called PLUTUS, a programming language specifically for that which is the functional programming language for the settlement layer and the contract layer. By the way, working on this, they have a guy name Philip Wadler who is one of the inventors of Haskell, the code that I told you is one of the most respected codes for programmers. Yeh. So the team here are, all across the board, is fantastic. But the real goal here with the IELE machine, going back to the analogy of the Appstore. The more the people can access it the more that people can participate in creating new ideas, the better the project will be.

00:50:47

Karim:
So when we were talking about Ethereum, when we were talking about NEO, we were talking about programming languages and how many programming languages could you work on, or whatever. Ethereum was just solidity, NEO’s got a couple more. Well what Cardano is going to do is they want to use something called the K-framework, which is basically a process through which you can define a programming language and it functions like a translator. Once you define entire programming language and you put it through their K-framework then you could write in almost any language that you want. So it's very possible that Cardano is gonna have the widest range of possible programming languages because anybody will essentially have something that functions as a translator to the smart contracts for IELE.

00:51:28

Mike:
So, let me stop you for a second. Do they have an intended design launch for this update?

00:51:36

Karim:
What do you mean by the sign launch?

00:51:38

Mike:
Well, I mean like it the way I understand it is that they're working on different things at different times. You know. Let's pretend that this is the engine. like the way I look at this, as well as described, this sounds like a bigger headache than just about anything we've talked about so far. Having the ability to translate programming languages sounds extremely complicated. Sounds like that's gonna take quite a bit of research, understanding peer review. That to me sounds like a massive undertaking. So, I mean, I don't know how to describe it. So, could this work? Absolutely! Could there be a lot of problems with this? Certainly! Is there a chance for road blocks here and and some hang ups? Like I think so.


00:52:26

Karim:
Right! Right! Look. There's no question. I mean, this is ambitious and they're trying to achieve a lot. Now, one of the advantages I think you've heard me mention before, that you know with big claims. If you're making big claims then you need to have big evidence or big performance to back it up. Well, one of the advantages here is that, yeh, they're taking on a lot of things, but they have a lot of different teams working on it. They don't have a few people in house trying to be the programmer, the coder, the game theorist, a designer. You know what I'm saying? No, they're going to mathematics, cryptographic game theory departments in different universities, all over the world and they're engaging with teams that are handling and studying this on a high level. That's another advantage of doing everything with open source coding and with using languages and stuff that are used by institutions and things like that. That means that Cardano has the advantage that they can interact with the academic world and therefore gain a lot of its resources which is something that not a lot of other cryptocurrencies can do.

00:53:31

Mike:
Well said. Is there anything else that you want to touch on, on this particular part?

The Basho phase[edit]

00:53:38

Karim:
Well, no.. I guess since we're doing the roadmap, I mean, now even even with this when you get to the website there's a little bit less information, you know, because this is more future development. But when they finish rolling out the Goguen development stage, they're gonna come with… They have a stage called Basho, which is when they tidy everything up. What's really interesting, that's probably named after Matsuo Basho, which is a Japanese poet. He was the King of Haiku, and, you know, Haikus are known to be very simple, very short, very elegant. So I wonder if maybe they named this particular stage where they're just going to tinker with everything. So it's gonna be later 2018.


00:54:09

Mike:
That's quite… It's quite a stretch but I definitely see the dots coming to play.

00:54:12

Karim:
Yeah I mean, I'm guessing there, because I couldn't find anything specific.

00:54:16

Mike:
Are are you trying to get hired by them? Is that what you're doing? Maybe there's a couple accidents in here and there. You're just connecting some dots for them.

00:54:23

Karim:
Yeah, that's true. Hey, if this wasn't the case, I stumbled into a relevant connection for you. Ah no, I'm gonna go out on the limb and say that, that was intended…. Anyway, the last step on the roadmap, at least as of right now, is what they call Voltaire. Obviously that's named after Voltaire, one of the most famous the enlightenment thinkers for freedom of religion, freedom of speech, separation of church and state, all that. But that's their sustainability and self sufficiency protocol. That's when they're gonna released a treasury. By then Cardano should be completely decentralized and it should be ready to go off into the sunset and evolving to whatever is going to evolve into. So I guess that's where we could go into the sustainability in governance, Mike.

00:55:06

Mike:
Definitely, that some good. So, there’s a couple topics we’re to get into with this part. I guess, let lit-off with funding. So give me your opinion on the treasury system and what you think is going to work and not work?

00:55:23

Karim:
Yeah. I mean.. I guess it's interesting. We let the discussion flows. So, this kind of a doubling down of what we said before. So I make a quick. But basically, you can either have an ICO. Model, where you raise a bunch of money and then you have to figure out what to do with it and it's going to run out. And then you might feel like a millionaire and start acting like an idiot and spend too much money. There's a patronage relationship or somebody with a lot of money essentially stings the project, but then you're dependent on them and they have to figure out how to monetize over you, and then there is what DASH brought to the space, in what I believe was such an incredible contribution, but it's the treasury system. Let's take a part of the inflation and put in a decentralized bank account, that we can use to hire developers, scientists, whatever. So, what’s really cool here is that anyone might be able to work for the blockchain one day.

00:56:10

Mike:
Will for sure! And part of this is that we have a roadmap for a certain number of things. They're certainly gonna come out with further road maps down the line. We don't know what the year, you know, 2023 looks like for this project. And this treasury system is going to give them the full flexibility to reach whatever corners the globe that they choose to reach. Use these peer reviews, these high level scientists recruits, these coders and programmers and teams. I personally see it as a very big benefit and I think this particular funding system has quite a few advantages over to the other ones

00:56:48

Karim:
Definitely Mikey. And it's important to add there…Just because you mentioned the year 2023 IOHK did the development with Cardano such a way that they only have a contract until 2020. So, when 2020 comes around, by then the treasury and the voting system will already be implemented. So IOHK will have to submit a proposal to continue to work, and they have to be voted on by the community. And they might lose, because maybe a big player like Google or Microsoft, or who knows what, comes along and says, well, look at what this is becoming. We wanted to develop for it. So pretty cool.

00:57:25

Mike:
It's an open source market and may the best man win.

00:57:29

Karim:
Yeah definitely.

00:57:31

Mike:
So do you see any issues with the governance system? Do you like the voting? How do you feel on the governmence of it all?

00:57:41

Karim:
Now, you know. I mean, the government's really hasn't been tested, so all we can talk about is the theoretical models that they're creating.

00:57:45

Mike:
Theoretically of course.

00:57:47

Karim:
All we can really focus on is what they're laying out I think they're coming up with some very interesting solutions. First of all they wanted to come up with the voting system that was going to be fair, representative, that you needed incentives for participation, because in a lot of the systems what happens is people don't care, and they don't participate. So to give you an example: a project where people don't care, don't participate in the voting, The United States of America, for example.

[Mike & Karim both Laugh]

00:58:13

Mike:
Yeah but what if you were paid twenty dollars to vote?

Incentivizing and de-incentivizing[edit]

00:58:19

Karim:
Well, you know, if the incentives were more aligned who we might see some interesting results. But, so anyway, how do you incentivize people to participate? And how do you make it easy to participate and to submit proposals while everything’s still prioritized. So, this aspect of it is really interesting because they're not really working in the computer science programming side of the ledger. But this is no more… A much more human layer. Is something that you and I are much more familiar with, because they're working with game theory. They're working with incentivizing and de-incentivizing. So they have a lot of teams working on this and the solution that they're coming up with in general is something called liquid democracy, which is essentially the process of elect…

00:59:03

Mike:
Before you go on here, I want to add add: I came up with an idea just now; everybody in America, if you voted you could go down one tax bracket. So your tax that you would have to pay would be based, exactly on your income. You could get a tax reduction based on whether or not you voted. Boom!

00:59:24

Karim:
Nice. Very good. You just created a system where the more money you have the more incentivized you are to vote. Where did this incentivize the poor, Mike.

00:59:31

Mike:
They're more incentivize than they are now.

00:59:34

Karim:
Nah, of course. I was just drawing.

00:59:36

Mike:
And it probably means a little more to them, so.

00:59:39

Karim:
So anyway. They come up with this liquid democracies situation. There essentially envisioning something where you can vote. You are incentivized to vote but you can essentially delegate your vote to anybody. So in the poker world this would be like if the World Series of poker was thinking about doing some major rule changes, and then like every poker player could vote or I could say, hey, you know what, I'm gonna delegate my vote to Mikey because he plays a lot of tournaments and then all of your friends delegate our vote to you and then you can even take all those votes that have been delegated to you and delegated to somebody who you respect even more to make a proper decision.

01:00:16

Mike:
Ironically there is a player's council and it does somewhat function the same way. I know Dan underground is a big part of it. And he uses his influence over the poker community to help make decisions for the World Series of poker. That is intended to be in the best interest for all parties, so.

01:00:34

Karim:
Oh my God. This is so random. But I just remember what the question that you asked was, before that I missed, about whether you're gonna have to stake things somewhere. The answer to that is they want to make it as easy as possible so that you can easily stake whether you have a wallet online or off line.

01:00:51

Mike:
Excellent! That would be very helpful.

01:00:52

Karim:
Yeah. It would be very helpful because they're trying to make things as easy as possible. So going back to the liquid democracy, we're going to see how it plays out. But going back to why is Cardano built in a modular way? Now, we've really gotten to a layer of the system that is going to be very inexact. It’s ruled by human psychology and game theory and it's gonna change. The dynamics of the market are going to change. So this is something that they're gonna roll out, but they might need to change. Where is like the fundamental core once, it's kind of like Bitcoin, you know, Bitcoin doesn't need to be changed. Some parameters we know that it's safe. So Ouroboros might not need any changes anytime soon.


01:01:29

Karim:
But these other layers of computing or game theory are voting they might need changes. So that's why it's being built in a modular way so that they can upgrade that independent without having to touch where all the money in all the assets are. So, very very forward thinking very methodical. And then finally is how the general direction of the project is going to be created when it comes to forking, when it comes to developmental updates, everything. And it was really interesting listening to some of these interviews Charles said that when they were studying human systems that are able to be stable and update over time, but still remain a level of stability, that the one thing that was able to do that was constitutions. So it looks like when Cardano gets developed, maybe in the Voltaire update or later on, there's gonna be some kind of underlying constitution to the system that has the potential to be changed but that it's very difficult to change and that requires consensus, so that when that change does happen, the community follows. so to speak.

01:02:38

Mike:
All right! So, we spent quite a bit of time talking about the pros. Let's just go into a couple cons, we developed. Where you stand on that?

01:02:47

Karim:
Look, I'll be honest with you. I think this is the best project in the space, okay?! So, obvious that's my bias, but where there is some negative, number one is gonna be development speed. If you are investing ways especially short term gains, then I don't really think that there's anything in the near future that's going to make this spike because this is going to roll out slower. Some other projects have a higher sense of urgency about them, but it's fair to say that Cardano will probably develop slower, more methodically. So that might be a negative.

01:03:20

Mike:
I have an idea for you. Does does this remind you of the Tesla model, where they sat back and really took their time to study every individual portion of what makes a vehicle better and just did it at their own rate?

01:03:37

Karim:
Right! Right! And it reminds me of like SURN or NASA. If NASA wants to do something they don't just roll with it because it's public money. So when NASA does something they have to do it well and sometimes projects take forever and they say, hey we're going to go to this place in 2025 and people rolled their eyes. But guess what? When they get a fucking robot on Mars it works perfectly and it works way longer than they expected because it's the epitome of human performance. The scientific method is the epitome of human performance.

01:04:11

Mike:
I think that you have to try to be prepared for all outcomes when you're creating something this large.

01:04:17

Karim:
Yeah!

01:04:18

Mike:
And that comes with a little bit extra hesitation that come from a little bit extra concern. So to a lot of people are listening to this that's probably gonna be a pretty big negative. You're not gonna see.

Mike:
Massive massive returns like you possibly will in two thousand eighteen with some other projects.

01:04:38

Karim:
Yeh, Cardano is not in a rush.

01:04:40

Mike:
Yeah like I'm just using that time to make more money so I can buy more.

The pros and cons[edit]

01:04:143

Karim:
hahaa. Exactly. You know, I did take a little deeper because I knew you were going to talk about the pros and cons so this one is maybe not a real con, but defected to using a fixed transaction cost formula, like a fixed number of ADA, then maybe that could be a negative if ADA grows very quickly, it could mean that the minimum transaction fees actually too high, but, that's built in such a way that they can edit it. So as long as they actually do follow through and make it adaptable that shouldn't be a problem. And then the last negative that I'll say is maybe the scope, maybe it is too ambitious, maybe it's trying to accomplish way too much and I guess that could hold it back. But then again the fact that it's built modular leadership protected if it doesn't achieve some of its highest ambitions, right?! Because the bottom layers are still solid.

01:05:35

Mike:
Yeah. I agree. The the scope could be too large. It could be too difficult to you know move at a reasonable rate but that's something… that's a situation I'm willing to face. I know we've talked a lot about the pros but Karim, just give us a quick rundown of what you would summarize it as?

01:05:53

Karim:
We covered the fact that it was open source and one of the things that's important to understand is that gonna give more flexibility in collaboration to the project with universities and other institutions. Essentially by following specific standards in creating common languages, they're going to be able to be helped by universities and institutions. And they're going to be able to have some of their problems solved by other people, where as a lot of these projects that are trying to be more like proprietary and secretive an adversarial and they're really just behaving more like in a adventure capitalist mentality. They might find that the problems they're going to face are too big to try to overcome on their own. Another advantage another pro of Cardano is the.. how rigorous it is. The bottom line is that as these projects grow you're gonna have hundreds of billions of dollars on the line and yeah I preferred the high quality, high assurance software, high safety peer reviewed. This high value of assurance that there was a lot of effort and rigor into the creation of this protocol.

01:65:55

Karim:
Another benefit is…this is a little bit more biased because I love academic fields. I really do believe that that's where a lot of the best research is done, but I feel like the people that they surround himself with, just give me an example, Cardano is being audited by the Cardano Foundation. So let me rephrase that: IOHK is being audited by the Cardano Foundation to make sure that their code is up to par. The Cardano Foundation, the foundation that was built to promote the project, is using some of their money to go hire a firm that specializes in Haskell auditing where they analyze code and that company is looking at IOHK to make sure that they're actually living up to the standards of being excellent coders. So think about that level of oversight. Think about that level of transparency, compared to what the space is riddled with.

01:07:49

Karim:
And finally a lot of the experience that IOHK is gonna have, because remember IOHK works for multiple projects. They are still developing for Ethereum Classic, for example. They’re also working with ZenCash. So they can take a lot of the lessons that they learn from these projects and implement the best aspects of into Cardano, which is a huge advantage.

01:08:10

Mike:
Generation 3.0.

01:08:12

Karim:
Yeah! Generation 3.0 I guess third generation protocol that utilizes peer review. Their high assurance software. They use Haskell coding. They're made by a large international team.

01:08:23

Mike: All right. Sorry to interrupt you, but I thought of a good idea for the podcast itself. 01:08:27

Karim:
Okay.

01:08:28

Mike:
We like to usually wrap up with the where to buy the coin, for the 101 that we have and in my mind I was, I was thinking of the medium that I see that with the guy from Futurama worries like shut up take my money I wonder if that actually has audio and I wonder if we get a clip of the show up and take my money from Futurama because that would go perfect for this section.

01:08:52 CLIP FUTURAMA: Are there any left? There may be one. Shut up and take my money!

01:08:57

Mike:
Criminal we like to do, you know, as a team we like to have a little chat before we record. We like to kind of go over some things and kind of dot our eyes cross our teeth, whatever. So we're looking up the exact markets on where to buy Cardano, because I know that I get it on Binance and Bittrex and it's not on many other than that. But I was curious to where it was treated, and I was blown away that the exchange UPbit actually is doing a tremendous amount of Cardano volume and it surprised me that the twenty four hour volume was over three hundred million dollars with the KRW, that is the Korean…the Korean currency is that what I understand.

01:09:43

Karim:
Yeah. It stands for south Korean Won.

01:09:48

Mike:
For whatever reason the…, it was what, 83% of the total volume. As of this recording was on UPbit the last 24 hours. Now before we publish this I hope we go back and check to make sure that that's not stand out thing but, I mean, I was surprised that the Korean exchange had this as one of their number ones.

01:10:09

Karim:
I was surprised as well.

01:10:11

Mike:
Wait. I will say it has has almost doubled the trading volume of Bitcoin which is number two. So it represented 90% of the entire site trading volume, and it's number three overall in trade volume. That surprised me quite a bit.

01:10:27

Karim:
Yeah and I was surprised as well. Now, you know, I really wouldn't know what to do with that information or what it means or anything like that.

01:10:34

Mike:
Well, if you join or discord server, you can tell us your opinion and let us know what does that mean to you.

01:10:40

Karim:
Yeah. Interesting. Interesting. So, at quick summary, Mikey. Where did you say they can buy?

01:10:45

Mike:
It is definitely traded on Binance & Bittrex. Those are the two exchanges that I use. Then also this UPbit, which might be a Korean market. But otherwise it's paired with Bitcoin on both Bittrex and Binance. Anything else we want to touch on before we wrap it up?

01:11:03

Karim:
And I'd like to leave off with… as I was going to their website I found a little.

01:11:11

Mike:
Quote.

01:11:11

Karim:
Yeah.

Three principles that guide the development of the roadmap[edit]

01:11:13

Karim:
So according to them, Quote, three principles that guide the development of the roadmap are: • First the growth of the community and its needs. • Second a distributed and resilient network true to the original vision of Satoshi. • And third, balancing the pace of research and development so that commercial advantage does not win out over the application of scientific rigor.

Between that…

01:11:44

Mike:
WOHHHW!

01:11:45

Karim:
And process over people. I mean they might as well be sweet talking me. This cryptocurrency…

01:11:48

Mike: Here, take my money.

01:11:50

Karim:
That, take my money and take my heart.

01:11:53

CLIP FUTURAMA: Shut up and take my money!

Final words[edit]

01:11:55

Mike:
All right that's going to do it for the Cardano 101. I'm Mike Laake. I'm here with Karim. Thank you guys for listening. If you get this far I'm I'm impressed.

01:12:04

Karim:
Yeh, we really want you there.

01:12:05

Mike:
We appreciate all the support. Love you guys. Thank you.

Karim:
This was not financial advice.