Cardano is a project sometimes referred to as third-generation blockchain. It's a decentralizable crypto-ledger and a transactional state machine which takes advantage of all the accumulated experimental data and trail-and-error of previous enterprises (like Bitcoin and Ethereum) to build its system from the ground up. What makes Cardano stand out is the engineering philosophy and scientific rigor in its approach to systems design. All the basic components and operational logic build from peer-reviewed formal specifications whose correctness is mathematically proven using formal methods and verifications. The system itself is built on Haskell, the most popular programming language in the functional programming paradigm (and even hiring one of its core designers to work on the project, Prof. Philip Wadler). These sets of practices together constitute a specific methodology and approach to software engineering that is a hallmark to building mission critical infrastructure (e.g., in the fields of aerospace and aviation, banking and finance, etc.)
In starting from first principles and base definitions, one of the goals of Cardano is to develop and establish the academic study of blockchains as a well-defined and systematized discipline. Cardano was launched in September 2017 by engineering company IOHK (Input Output Hong Kong), itself founded in 2015 by Ethereum co-founder Charles Hoskinson. IOHK is a startup dedicated to the research and development of blockchain and peer-to-peer solutions for academic institutions, governments and enterprises and supports, besides Cardano, also Ethereum Classic (with which it is philosophically aligned).
Cardano is being developed and worked upon by numerous different entities tackling different aspects and elements of the project, but there are three main dedicated legal entities, each fulfilling a specific role and function in the ambitious scope of the enterprise:
- IOHK, the Hong Kong incorporated research and development firm which hires some of the leading world academics and experts in Haskell and is conceived of as something of a factory for standardized and universally compatible cryptocurrency components.
- The Cardano Foundation, dedicated to growing the community around Cardano and connecting and helping partners who want to develop and build on Cardano from across the globe.
- Emurgo, the official commercial and venture branch of the Cardano project that drives adoption and adds value to ADA holders by building, investing in, and advising projects or organizations that adopt Cardano’s decentralized blockchain ecosystem.
At the time of launch, approximately 31 billion ADA were released, around 20% of which are collectively held between the above three entities. Maximum supply has been capped at 45 billion and the roughly 14 billion not initially distributed at launch will be so via block production as proof-of-stake validation becomes fully operational on mainnet.
Cardano's primary focus is on resolving the three main pain points of blockchain-based cryptocurrencies - scalability, interoperability and sustainability. Scalability and interoperability overlap in many ways (i.e., cross-chain communication and bridge mechanisms between systems and ledgers, etc.) and the layered compartmentalization separating concerns makes it much easier to swap components and solutions in and out as needed. Sustainability is addressed mainly by a prototype for a community run on-chain treasury system organized as a delegative liquid democracy.
System Architecture and Guiding Design Principles: Functional Modularity and Layered Abstraction Separating Concerns.
Cardano's technical specifications and designs are available as a large collection of academically peer-reviewed papers. These high level blueprints are the starting point from which the working implementations are prototyped in their lower level details and contextual specifics. Functional modularity of system components and separation of concerns in logically distinct layers (so as to, among other reasons, avoid complexity becoming unmanageable) are defining attributes of Cardano's design (and to complex systems more generally). Mechanisms for pegged side chains of various consensus and ledger type variations are described in the set of papers, as well as a construction for parallel chains that increases throughput capacity by splitting transaction traffic on two lanes.
At the time of this writing, Cardano is transitioning towards its second phase of development called Shelley. While the first era, Byron, saw the release of the official ADA wallets and laying the foundations of the project, Cardano had been during that time run in a federated mode centralized under the control of Emurgo. Byron was officially completed in March 2019, entering Shelley which is the process of decentralization, as driven by the proof-of-stake to be put in place with validation entrusted to the properly incentivized stakeholders.
Settlement UTxO Layer (SL) and Proof of Stake Consensus (Ouroborous)
Cardano inherits most of the foundational core principles of Bitcoin in laying the groundwork of its otherwise significantly more flexible design. While following into the path of Bitcoin, it does at the same time introduce a number of important improvements and key modifications to the Bitcoin prototype. Its base settlement layer (SL), for example, is a functional ledger representation of Bitcoin's basic UTXO model - an extended UTxO keeping track of ADA transactions and flows. Unlike Bitcoin's simpler UTXO accounting though, Cardano's is structured as streaming dataflows of state transition outputs in such a way that functional scripts can naturally operate on them (and thereby make sophisticated smart contracts possible without needing to implement an accounts-and-balances based model like the one adopted by Ethereum).
The Cardano SL is described in the documentation as "Bitcoin reimagined with a freedom to fix Bitcoin’s design flaws". And also unlike Bitcoin, Cardano's SL model significantly differs in that it is an Haskell implementation of its version of a proof-of-stake consensus called Ouroboros (with the current implementation not yet entirely corresponding to the formal specification as described in the paper). The specifics of how proof-of-stake cycles through the processing of arriving inputs compared to how proof-of-work handles the same call for altogether different arrangements and sets of parameters. Cardano's Ouroborous includes the additional components of coin tossing and verifiable secret sharing schemes necessary for the carrying out of the protocol.
A comparison between Cardano's extended functional UTxO ledger and the account-based model Ethereum implements. A single transaction in the UTXO model may have multiple inputs and outputs, allowing for atomically executing bundled operations (i.e., sending the remaining change from a transaction back to an address that belongs to you in the same transaction that also spent an amount as an input). UTXOs are simpler and easier to reason about but known to be much more difficult to implement contract capabilities and complex business logic on top of. One way Cardano works around this is by compartmentalizing functionality in separate layers and extensible modules instead of blending it all together in what quickly develops into too complex a knotted mess making it difficult to clearly reason about the inner workings and programmable logic.
The paper claims that the security guarantees and properties of Ouroboros are comparable to those of Bitcoin's proof-of-work, but offering significant qualitative efficiency advantages over what on the other hand amounts to proof of physical resources in PoW-based chains. The incentive mechanism in place is mathematically proven to neutralize attacks such as selfish mining in maintaining an approximate Nash equilibrium of honest behavior in the system. How the protocol carries out the validation of transactions and appends valid blocks is through a random selection process which elects a leader with probability proportional to the corresponding stake held as reported in the current state of the ledger at the time.
In the PoS terminology, time is divided into discrete units called slots and each slot corresponds to a single block (what is referred to as block time in Bitcoin, more or less). So, a stakeholder that is elected to validate a block is called a slot leader. The election process takes place by way of secure multi-party computation where every stake-holding elector carries out a coin flipping computation and shares the results with all the other electors, converging on the final value of the slot leader chosen to carry out the validation and append the block. The protocol assumes an honest majority of at least 51% of the total stake in the system, in the case of which an adversary cannot break the persistence and liveness of the chain - two properties of a robust transaction ledger which guarantee that honest transactions are picked up and included into the ledger with fast finality that cannot be reversed.
Computation Layer (CL), Contract Code Execution and Business Logic Expression
As already mentioned, Cardano implements a layered approach of separating core functionalities and regimes, borrowing from other successful protocol designs like the TCP/IP Internet protocol suite. Thus, for example, settlement and computation are encapsulated within separate discrete layers and according to their relative orders of abstraction. The computation layers (CLs) are the programmable environments where contract logic and scripts for handling conditional transactions and more complex business logic are run. Any one such specific layer could be configured and set up in compliance with any one legal jurisdiction it might happen to be operating in. Cardano will run multiple different CLs, with and without virtual machines and with support for extended side chains (through mechanisms such as chimeric ledgers which translate back and forth between UTxO-based and account-based ledgers and novel consensus primitives such as non-interactive proofs of proof-of-work).
An execution platform and a Haskell embedded language called Plutus form the basis of Cardano's smart contract capacities. Plutus neither compiles to bytecode nor involves a virtual machine, but rather translates to lower level Plutus Core as the compilation target. Plutus Core is embedded in the ledger itself as is designed to be simple and relatively easy to reason about, making use of proof assistants and automated theorem provers in its tooling arsenal. Within the SL, Plutus is mainly used for things such as adding support for connecting to other layers and side chains and other such lower level general purposes. The Plutus implementation and tooling is available at the IOHK Github repository.
Additional to that, another higher-level domain-specific language (DSL) is provided, specifically designed for modeling financial instruments and applications from a set of basic building blocks in a way that is intuitive to financial and business engineers and doesn't require them to have any further knowledge about programming or Haskell. Called Marlowe, it is still an DSL also itself embedded in Haskell, modeled as an algebraic type (that is, composite data type formed by combining other types) with executable small-step semantics (i.e., using formal descriptions of how individual steps of a computation take place in the system, taking any available inputs at each step).
Marlowe is tailored for fixed-duration financial products, such as fixed-term deposits, various hedging instruments, credit swaps and the like. The basic idea is that financial transactions are generally composed from a collection of basic elements which Marlowe chains together. And given a kind of financial periodic table of these standard elements, it easily becomes possible to ensure support for an arbitrarily large set of compound transactions covering most (or all) possible transaction types without the need to resort to more general-purpose programmability. Marlowe also comes with a useful complementary visualization tool for simulating the operation of contracts called Meadow.
Phases of constructing a contract in Marlowe. Source: "Functional Blockchain Contracts" draft paper.
Functional programming, should be noted, has become especially popular and widely adopted within the financial industry over the last couple of years. This is not surprising since finance is yet another domain in which the purely functional simplicity, predictability and reliability of languages like Haskell and Scala satisfy a number of criteria that are critical to an industry which measures efficiency in fractions of the second. Parallel programming allows Haskell to scale within the resource capacities of the underlying hardware while the mathematical simplicity of how functions are expressed and handled makes it the ideal framework for the rapid prototyping of complex algorithms that handle enormous amounts of data with unparalleled speed and precision. Both of which being properties critically important to the financial industry.
Perhaps also worth mentioning, the Maker DAO - one of the core dApps that make up the Ethereum DeFi stack, a decentralized organization of domain experts that manages the Dai stablecoin and much of the risk in the system associated with that - also makes use of a Haskell reference implementation of the Dai issuance system to compare, verify and run simulations against the on-chain Solidity prototype.
On-Chain Treasury for Ensuring Long-term Sustainability and the Continual Development of the System
Inspired by the Dash model, a way to ensure sustainable maintenance and development of the system is proposed by IOHK in a design for a community-controlled treasury system that is provably secure and compatible with existing popular blockchains like Bitcoin and Ethereum. The model essentially functions as a decentralized collaborative decision-making system supporting liquid democracy/delegation voting (a flexible hybrid of direct democracy and optional representation by delegating voting to individuals more competent in the respective field or area involved in the making of the concrete decision). Votes are cast and verified in zero-knowledge, ensuring the integrity of the voting decisions. A prototype has been implemented in Scala over the Scorex framework (a modular framework and set of components for assembling blockchain and cryptocurrency systems, also developed by IOHK and of which notably Waves made use of in the putting together of its platform).
The treasury could be cumulatively funded over time from fees and/or some minor percent of block rewards, among other potential sources of slow and steady revenue. The operation of the treasury necessarily involves new transaction types and a separate treasury state. Community stakeholders can participate in the voting process with voting power proportional to their stake in the system (which distinguishes between coin ownership and stake ownership in order to also be able to delegate stake without transferring custody at the same time).
This is to form the basis of Cardano's own improvement proposal and ballot system in what might along the way turn to develop into a major democratic experiment and a model that could possibly be re-purposed and/or modified for use in other circumstances and settings as well.
Interoperability: Universal Virtual Machine (IELE) and Protocols for Cross-Chain Communication
As said, interoperability is one of IOHK and Cardano's top priority areas they focus much of their efforts on. Some of the solutions include a universal VM based on LLVM and the EVM that has been built from formally specified semantics and mathematical proofs deriving from them, verifying the correctness of construction. IELE, as its called, was prototyped using the K framework - a semantic framework used for the definition and specification of programming languages, their type systems (the set of rules for assigning properties to programming constructs) and the set of formal analysis tools for them. On another front there's work being done towards mechanisms for pegging side chains (whether PoW or PoS, UTXO or account-based), perform cross-chain transactions via proofs and their verifications on the receiving chain and ledger designs which accommodate for both styles of record-keeping at the same time (UTXO and accounts), etc.
Universal Virtual Machine: IELE
Virtual machines are emulation instances of a computer system/architecture within another physical computer system. Process VMs, such as EVM and IELE, are built to execute programs within a specific platform-independent runtime environment. They provide some sort of high-level abstraction (in how high-level programming languages do) and are usually implemented with an interpreter - a program that directly executes source code instructions from supported programming or scripting languages into bytecode representation without using a compiler.
IELE, the universal blockchain VM, was developed in partnership and collaboration with Runtime Verification Inc. By first defining the formal syntax and semantics of the machine, the K framework generates in return an executable reference model along with a set of analysis tools and a verifier. IELE has been modelled after LLVM which, unlike EVM, is a register-based rather than a stack-based machine. That means it stores instructions in multiple processor registers (with unique addresses identifying them) instead of in pushdown stacks that order the data elements they store along a bottom-up LIFO (last in - first out) sequence. An important consequence of that is that there are no longer arithmetic stack overflows and underflows in IELE.
IELE implements translators/compilers from a host of other high-level languages (Solidity for one, of course) and into IELE bytecode, establishing a uniform gas model across languages. Different languages can also interact with each other through an ABI (Application Binary Interface) and most importantly, as a VM meant to address correctness concerns, IELE both executes and verifies/proves contracts in order to certify correctness and maximize security.
An IELE testnet is live and running and mainnet release is expected to come with the Goguen era where IELE will be deployed on a separate computation layer as a kind of a multi-purpose smart contracts hub for translations, error-checking and lower-level processing for all languages across the semantic spectrum of what the industry as a whole supports. More detailed information about the design rationale and architecture of the IELE virtual machine is available here.
Cross-Chain Communication and Moving Value Across Chains: Chimeric Ledgers and Non-Interactive Proofs of Proof-of-Work
Non-Interactive-Proofs-of-Proof-of-Work (NIPoPoWs) is a proposed primitive for verifying state cross-chain that could be adapted into existing PoW-based cryptocurrencies to improve their performance and extend their functionality. It allows for the sending of a transaction from a foreign, exogenous system with a poof attached, verifiably proving the coins/tokens transacted/transferred are authentic and haven't been double-spent. This mechanism can be also used in the pegging of side chains.
There is also work being done on so-called chimeric ledgers which translate back and forth between UTxO-based and account-based ledgers (simulating one style by the other), introduce new transaction types which allow both crypto-accounting styles to co-exist on the same ledger and a universal transaction type construction which can mix UTxO and account operations in a single transaction.
The phases/eras in the development of Cardano as outlined in the officially stated roadmap.
The Cardano roadmap is divided into five phases. The initial Byron phase is simply to do with the basic UTxO transactional capability (as shared with Bitcoin and pretty much any other blockchain-based cryptocurrency, but with ADA as the basic numerarie of value and accounting) and has launched as a federated network controlled by Emurgo. Byron has to do with the delivery of the official Deadalus wallet and the lighter weight Yoroi one. Shelley, the second stage, is expected to launch on mainnet some time before the end of 2019 and Q1 2020. It is to do with a transition from a federated centralized setting through an incentivized testnet and towards a fully decentralized network running on a properly operational proof-of-stake consensus parametrized to provide the same Byzantine tolerant semi-synchronous security assurances as proof-of-work, but without the centralizing trajectory that the current proof-of-work instantiations lead to (with four mining pools usually ending up controlling more than 50% of the network's hashing power).
The Daedalus wallet interface. Make sure to backup and safely store your recovery phrase upon setting up the wallet.
The next phase, Goguen, is to focus on smart contract capabilities - a crucial element of DeFi ("decentralized finance") applications. But unlike all the related undertakings so far, Cardano aims to accommodate for the various compliance regimes in different jurisdictions in the converging to some global standard. Transactions are to be templateable, have contingencies, embed a story and specify commercial intent, have provisions for identity, introduce standards for assets that map into the real world, etc. Crucial to Cardano's mission is the legitimization of peer-to-peer cryptocurrencies as reliable institutional layers, adequately equipped to address the issues and problems we face today. And as Goguen goes live, there are already projects waiting to migrate to Cardano such as Traxia, a decentralized global trade finance system where invoices are converted into smart contracts and traded as short-term assets.
Partnerships and Collaborations
Cardano works in collaboration with numerous academic institutions (such as the University of Edinburgh, Illinois, Athens, etc.) and reputable software companies (of the ranks of Runtime Verification Inc. and others) around the globe. Cardano is among the very few projects in the cryptospace who have gone at great lengths to gain institutional credibility and there's reasonable academic merit to the things IOHK and Cardano are doing, as witnessed by the large body of published theoretical peer-reviewed work.
Runtime Verification Inc. is a startup company aimed at using runtime verification-based techniques and formal methods in improving the safety, reliability, and correctness of software systems. Also member of the Ethereum Enterprise Alliance (EEA), working on such things as formal verification of the Ethereum Casper protocol and formal executable specifications of various ERC standards, among other things.
More recently, Cardano has brought the New Balance Realchain in collaboration with New Balance, the athletic wear and sneaker brand. This is Cardano's first entry into the field of supply chain anti-counterfeiting and this application follows the "colored coins" approach in proving the origin and authenticity of retail products. Realchain uses a physical card with an internal chip that can be scanned with a phone, confirming that the New Balance footwear is indeed genuine. The authentication app can be found here.
Since Cardano is largely focused on the Asian market and Japan in particular (with most investors and ADA holders being Japanese themselves), there are partnerships that Cardano is entering with in that region, like NNT Docomo recently, Japan's biggest mobile operator.
Other notable partnerships include the one with Metaps Plus, one of the largest payment platforms in South Korea, the partnering with Sirin Labs (a company working on a blockchain-based cold storage mobile device) and the teaming with Konfidio Ventures (a Berlin-based blockchain venture studio, helping drive real-life use cases of the Cardano technology) among others.
Controversies and Possible/Potential Risks
While there have been circulating rumors and even a few accusations here and there regarding a possibly unethically carried out ICO, these seem to have been proven false with time. Regardless, the distribution of ADA seems to be disproportionately concentrated in the hands of Asian investors and specifically Japanese ones (where the crowdsale took place, somewhat distancing itself from the crypto scene and the typical way of going about launching an ICO at the time).
Furthermore, while Cardano's mathematically proven and peer-reviewed variation of proof-of-stake consensus may in theory be fair, egalitarian and decentralized, in practice things may sometimes somewhat diverge from theory (in which there tends to be as if no difference between theory and practice) and initial implementations may differ in some ways from the formally specified models as described in the papers.
Also, in November 2018 the Cardano Foundation chairman at the time, Michael Parsons resigned after two years of alleged mismanagement of the foundation, his place then taken by Pascal Schmid who held the position for an year before himself resigning in July 2018. Nathan Kaiser is the currently acting chairperson among the Cardano Foundation Council Members. Such reshuffles of members and staff are nothing too unusual or reason for particular concern, but they do indicate the difficulties of organizing and effectively running a project of such caliber.
And lastly, it may strike one as a little strange and perhaps ungrounded that there are some individuals and Ethereum community members who appear to have not particularly favorable opinions and views regarding Hoskinson (which may or may not have something to do with the early days of the founding of Ethereum), as witnessed by some Twitter exchanges and old Reddit discussions. Either way, the accusations raised have not in any way come to be justified since.
Competitor Projects and/or Alternatives
FinTech, DeFi and Open Finance are areas which differ from each other in some key respects. DeFi as a movement began on Ethereum as a growing ecosystem of composable protocols, primitives and financial applications such that they fulfill the decentralization criteria and do not directly bridge into the world of traditional legacy finance.
Competitors or rivalries might be words a little too strong for describing how things actually are in the reality of where crypto is. But Cardano and its goals and targets do overlap in many ways with those of a number of other projects, particularly value-agnostic platforms like Ethereum. And this is another crucial point, Cardano seeks to establish itself as a platform to support services and have applications built on top of and not as a specific use-case project targeting particular niche industry or business. Cardano goes big, for the structural foundations and basic grammar that define the nature of everything building from it. David Curatieles defines as platform in his "Platform Design: Creating Meaningful Toolboxes When People Meet" so:
"As a computational term, it is ‘an infrastructure that supports the design and use of particular applications’. As an architectural term, it ‘describes human-built or naturally formed physical structures’—it seems to be the combination of the French terms ‘platte’ and ‘fourme’ which translates as ‘flat form’. As a figurative term, a platform becomes a ‘metaphysical [material] for opportunity, action and insight’. As a political term it ‘generally implied a kind of neutrality towards use—“platforms” are typically flat, featureless and open to all.’
To that common set of features, I would add the idea of community, defined as a ‘realm of practice’ built on ‘connections uncovered in the course of everyday experience’ (Feenberg 2007, 28). Platforms as emergent systems can be born from a social innovation process, where a community would foster the creation of a system to suit their needs. This idea of a dual origin of platforms can also be found in Saldana et al. (2016) when looking at the different types of socioeconomic networks that can be formed on top of a technical communication network: some of their cases are bottom-up (more community-centric) while others are just clever adaptations of business models of more traditional corporate systems to accommodate a situation or need. Gillespie (2010, 350) hints at the idea of community when he explains how a platform ‘suggests a progressive and egalitarian arrangement, promising to support those who stand upon it’. He takes this line even further by analysing what makes computational systems become computational platforms. Specifically, he says that a computational platform is the technical base ‘upon [which] other programs will run’; but what makes them platforms is not that ‘they allow code to be written or run, but because they afford an opportunity to communicate, interact, or sell’. This community aspect is then linked to the idea of the platform as a political term. Communities are governed by social contracts (terms and conditions or codes of conduct) and so is a political platform; what it takes is a set of beliefs to build on (Gillespie 2010)."
The above is also explanatory of what is meant by "community" here. People invested in projects like Cardano tend to be so not just merely out of detached profit-seeking self-interest, but are genuinely and actively engaged and interested in learning, discussing and contributing and tend to come from similar backgrounds and share the common goals and aspirations of the Cardano enterprise.
With Goguen finalized and programmable contracts and computations set in motion, Cardano will no doubt come to quickly evolve its own sprawling DeFi ecosystem. But in contrast to the Ethereum DeFi, which as a loosely defined movement tends to have something of the garage hobbyist non-mainstream spirit and character as shared with other technology-driven grassroots and open source movements like DIYbio/biohacking. As such, the Ethereum DeFi shies away from traditional modern finance and corporate influence and tinkers with coming up with its own mechanisms adapted to the constraints of its platform (i.e., cannot compare to the speed, efficiency and level of complexity that modern finance operates on).
Cardano's DeFi arsenal will be closer to the logic of how institutions do finance today and focus on applications with immediately applicable real world use cases (through also strategic partnerships with entities wanting to implement Cardano in their business and industry). It would be closer to being on par with modern fintech assurances and standards than all other blockchain-based experiments have so far proven to be.
In terms of governance and influence, Cardano has taken the concept of an on-chain treasury from Dash, but also shares some of the engineering approach (functional modularity and clearly defined logically separate categories) and technically biased perspective of projects like Tezos (which formalizes on-chain governance in a way that ensures continual evolution and development of the protocol). Another project which is sometimes also referred to as a "third-generation distributed ledger technology" is IOTA and its DAG-based tangle. However, while IOTA has a different mandate and operates within a somewhat different domain, should it accomplish its end-goals it could likewise end up becoming a major player within the financial world.
Arguably, and given what has sometimes seemed like personal rivalry between the Hoskinson and Larimer, EOS may be seen as a weak competitor to Cardano, although that may be a bit of an exaggeration given the haste and greed driven irresponsibility with which EOS was put together as a badly concealed attempt at bootstrapping a crypto-plutocratic regime of grotesque asymmetries and little utility or actual vision of purpose.
Summary and Conclusion
"First, it is important to emphasize the value of simplicity and elegance, for complexity has a way of compounding difficulties and as we have seen, creating mistakes. My definition of elegance is the achievement of a given functionality with a minimum of mechanism and a maximum of clarity."
- "On Building Systems That Will Fail", Fernando J. Corbato (1991 Turing Award lecture)
Cardano tackles the problems it has taken to solve in a particularly mathematical way of approaching an issue. By first giving clear explicit definitions to the terms, semantics and concepts involved and then proceeding to abstract and formalize the general underlying principles and models from their concrete instances and contextual circumstances. This is hugely important for the purpose of broadening the perspective of how we're looking at something by stripping away all the detail down to the basic constitutive components of what fundamentally defines the thing and makes it stable (i.e., making it easier to reason aboutin the simplest terms of the broadest picture).
Then, once having done that and gotten it out of the way, begins the process of translating theory into working prototype implementations. Should this been gone about and set up more "democratically" and closer to the open source ethos of egalitarian community spirit and non-profit (as Ethereum has), it would have perhaps been impossible to introduce the necessary structure (chaotic and somewhat anarchic that open source tends to be) and organize along those lines between a number of legal entities, organizations and academic institutions.
"Cryptocurrencies are a prime example of the social component of money. When restricting analysis solely to technology, there is little difference between Bitcoin and Litecoin and even less so between Ethereum and Ethereum Classic. Yet, both Litecoin and Ethereum Classic maintain large market capitalizations and robust, dynamic communities as well as their own social mandates.
It can be argued that a large part of the value of a cryptocurrency is derived from its community, the way it uses the currency, and its level of engagement in the currency’s evolution. Furthering the thought, currencies such as Dash have even integrated systems directly into the protocol to engage their community in deciding what should be a priority to develop and fund."
- Charles Hoskinson, from "Why We Are Building Cardano"
Also, crucially, Cardano is not laying out an experimental playground for casually testing out new ideas and concepts on a small scale at first, but is deliberately and responsibly building for mission critical and in production which goes to show that their goal is to push the technological paradigm into mass mainstream adoption, making it an indispensable reality embedded in the workflows of how institutions operate and in the translating of productive flows across different systems, jurisdictions and domains. And in that endeavor Cardano tends to be more focused on the Asian market and developing countries with weak institutions and systemic problems such as widespread corruption, lack of access to essential services and the like. Ethiopia is one such place of focus and Cambodia has been mentioned on occasion.
In conclusion, Cardano is what is sometimes referred to as an "ambitious system", which in itself implies a complex one (which means many parts and many different parts and ways in which they self-organize in a polyphony of coherent functional wholes, exhibiting emergent properties that are irreducible to any of the individual components). Such enterprises are usually pushing the envelope of what people know how to do and there is, consequently, always a level of uncertainty about when completion may be possible. But also whenever such ambitious systems do work they tend to break new ground, provide new services and quickly become indispensable. Cardano has set itself the goal of building a highly reliable and performant institutional operating system, such that one might eventually, for example, feel confident to realistically stake his country's financial future in.
Links and Resources
IOHK research papers library.
The Scorex framework and modules Github repository.
A collection of published research of from the Distributed Futures, part of the Long Finance research program managed by Z/Yen Group (London-based commercial think-tank consultancy) in collaboration with the Cardano Foundation.
Cardano public discussion forum.