New Charles Hoskinson Interview Instills Confidence in Cardano (ADA) Crypto Investors
Charles Hoskinson is an ambitious force in the crypto community and has co-founded three different ventures so far – Input Output Hong Kong (IOHK), Cardano, and Ethereum. Before he took on cryptography, he was a mathematician that studied analytic number. Right now, in his efforts to support his CEO role at IOHK, he said they are “committed to using peer-to-peer innovations to provide financial services to the three billion people who don’t have them.”
The majority of the work goes towards Cardano, which managed to raise $60 million when it was started two years ago.
Cardano works on a blockchain-based platform and has the most technological advancements to date. At one point, the ADA token of Cardano had a market cap of $30 billion. To put it simply, Cardano is much like Ethereum, except that it uses a Proof of Stake (PoS) protocol to validate the blocks, and it does not need any additional security to do so.
In a statement, Hoskinson said,
“Design decisions that went into Ethereum were counterproductive to being a world computer, such as treating every transaction the same. The DAO was treated the same way as every other smart contract.” He added, “In poker, do we really care about putting every step of that game onto the chain? Poker is a fair game and there is conservation of value, but you don’t care about every hand you’ve ever played dating back 7 years with time stamping and immutability – this is too high of a burden [for a blockchain]. Inventors of TCCIP had no idea about wifi or 4G or other layers we have today, but their protocol is the bedrock for these technologies because of the design. You can gracefully add things into the system, and that’s what we’re trying to build at Cardano.”
There are plenty of reasons that Hoskinson is someone to follow, even without considering his entrepreneurial tasks. When Hoskinson spoke with Andrew MacDonald at the Blockchain Futurist Conference, he was able to learn more information about his philosophy and upcoming projects.
Comparing EOS and Cardano
The EOS blockchain was a project between Dan Larimer and Block.One, who realized the need for blockchains to take on faster transactions as customers pushed for adoption. The Delegated Proof of Stake system was considered the best mechanism for this. Even though they must forgo decentralization in lieu of speed, Larimer has confidence that there is “enough” decentralization, due to the censorship resistance.
Ideally, the security of token holders and their assets would determine how secure the funds are. However, Larimer has setup 21 block producers through a voting process to help with the decisions of the platform. Unfortunately, the EOS blockchain has been the victim of a great deal of scrutiny for choosing censorship and holding the power to blacklist some addresses. Hoskinson does not want to repeat this sacrifice in Cardano, saying,
“If you need to ask yourself if you’re okay with centralization and control, then why have a blockchain at all?”
Hoskinson continued, saying,
“The purpose of Cardano is to step back and have a more layered architecture. With Cardano we are doing innovation, and that moves the tradeoff profile [between centralization, security, and speed]. What Dan Larimer did was say ‘I have a philosophy that this tradeoff profile is acceptable, so I am going to take old ideas and make them new.’”
The big difference between EOS and Cardano is that Hoskinson uses a slower strategy to build up the blockchain from the ground up. He commented,
“What we’ve done with Cardano is start with asking ourselves what a blockchain is. Does proof of work actually make a blockchain secure? Is there a way to build PoS with the exact same outcome? […] Can we do things in a way where we can achieve classical performance with decentralization so that we’re moving the tradeoff profile in a certain way? […] Every time Cardano publishes a paper we are taking a step forward.”
Hoskinson’s Feeling About the Future
Hoskinson, though he has headed up multiple cryptocurrency exchanges, has stayed away from trading. When discussing ADA’s price levels, Hoskinson said,
“We don’t think too much about the price. We haven’t sold a single ADA since receiving ADA. I have lost on paper more than 2 billion dollars, so i feel the pain [of the bear market] more than most. Can’t get caught up in the short term. No matter how Steve Jobs-like you are, you’re going to have a bad quarter. It’s not day by day – it’s do you have principles, vision, and a high level goal to move from high level to something to create real value for your token? If you have that, then the price works itself out.”
He remembers when he though the industry would have stable markets that are well regulated. While Hoskinson believes that the industry is slowly getting the regulations and stability that they need, he also thinks that it is still a little far off.
How Could Cardano Reach the “Path to Trillions”?
Experts and analysts have had plenty of discussions about how each coin can get to the “path to trillions,” regarding the market cap. Hoskinson believes that there are three areas that need to be dealt with:
- Capabilities. The platform needs to take on the demand of utilities. The platform does not want to be like Steem, as they want their tokens to have impressive incentives.
- Community. Hoskinson believes that there must be a shared responsibility in running the platform, keeping a self-ruled community that does not have any one leader.
- Markets. Regulated markets are absolutely necessary for the purchase and sale of coins, which is crucial to the community.
What To Expect With Smart Contracts
Hoskinson easily predicted the way that smart contract technology would grow, and he was right before when he suggested that these platforms are repeating the same errors of innovators in the 90s. In Hoskinson’s interview, he said,
“We’re saying write a smart contract, but an EOS, Ethereum, NEO, or Cardano contract so that you’re locked in a system. As an industry we need to stop thinking about vendor lock-in, and start thinking about contracts above the platforms. You don’t need to create a moat around your business – for example Amazon Web Services doesn’t lock you in..”
He continued on this train of thought, expanding on the topic:
“We need to say our developer experience, privacy, and operations are better than our competitors. At the end of the day this about putting power to the edges, and [remember] these are not products of companies, and one day, some way, somehow, I will […] not be working on Cardano. And if I’ve done my job correctly it should be as powerful or more powerful than when I was there.”
Furthermore, even when asked about how the SEC is establishing securities, he is not concerned in the least. He said,
“SEC needs to go after the most egregious offenders to allow the market to self-regulate. At the end of the day I don’t plan for regulation – I say, ‘what is moral and right for my community?’ Moral hazards come when you start with the law, then the industry, and then the community.”
Hoskinson seems like he has his attention facing the right direction, focusing on the best ways to improve his projects. He hopes to return to mathematics when Cardano has a smooth and functioning system. He would also like to go back to strategic investments within about 10 years.