Cardano is working on a crypto-native microchip that would allow cryptographic transitions without Internet access, potentially providing a fiat-like experience to hundreds of millions of people worldwide.
In a recent interview, Charles Hoskinson developed the crypto-native chip that IOHK is working in his blockchain lab at the University of Wyoming, which can lead to many groundbreaking use cases, including experience similar to the cash for cryptocurrency.
It all started when IOHK, the Cardano development company ( ADA ), started exploring supply chain use cases and realized that there were no chips on the market. market which could satisfy its requirements - integrability, capacity to store cryptographic keys and to be inexpensive to produce:
"Really, what we have noticed is that there is unfortunately no market standard for trusted open source hardware powerful enough to be used with cryptocurrency, but also in the supply chain. "
Hoskinson stressed that all the work done on the chip would remain open source and would benefit not only Cardano alone, but the entire crypto community.
When is Lambo on the chain?
The chip could be used in a variety of supply chain use cases, including authentication and luxury goods management. For example, it could be used to determine the authenticity of Louis Vuitton handbags or to manage access to Lamborghini limited edition purchases:
“And the only people authorized to buy these [limited edition models] are verified Lamborghini customers. And so you see a lot of these things. And so what ends up happening are the people who are verified customers, there is a lottery system and if they win, they have the right to buy it. But almost always, they sell that right to someone else and make a profit. So it's like free money that Lamborghini gives to its customers. "
From crypto to physical cash
However, not all cases of use of the chip imply prohibitive articles. Many relate to agriculture and the developing world. One of the most ambitious projects would involve, at first glance, a counter-intuitive transformation - from virtual money to physical money:
"You know, the whole point of Bitcoin was to move from cash to something that looks like cash online. But what if you want to go in the opposite direction? What if you wanted to move from a native cryptocurrency to something that has a caching user experience? It is very difficult to do without a hardware component. "
Cardano believes that the developing world is one of the key markets for the future success of the cryptocurrency. For example, they have discovered that in Africa, only 2% of the six million farmers have smartphones:
“So when you look at this, you say, well, 98% are mostly offline and not bank or digital. So if I were building a monetary system for them, it would probably be a bad idea to say, "Oh, you have to use a currency that is always online, purely digital." You need something else. So how can I replicate the experience of cash while having a blockchain backend? Well, what you do is create a hierarchy where those two percent basically become micro-banks and then they can manage the issuance of those tokens to people and then their phones or local infrastructure can check. "
Infinitely scalable crypto
The way it would work is that the private key from one chip would be transferred to another. It would also provide proof of the erasure, ensuring that the key only exists on the new device. The chip could be integrated into a telephone box and would not require the Internet for the transfer of cryptographic keys:
"So if you can do it, you can just tap the phones locally without an internet connection and move the value. As you would for a twenty dollar bill from one actor to another, and you have replicated the experience of money. Now, the good thing about the solution is that it is infinitely scalable because these transactions don't actually happen on the blockchain. From a blockchain perspective, nothing happened. "
It is a long-term project that will take years to develop. One of Hoskinson's concerns is the shadow of the U.S.-China trade war, which could hamper supply chains for chip production. In addition, cryptography is considered a weapons system and governments limit its export. Although they can be ignored during the halcyon, these controls have a tendency to tighten up in conflict.