WHY​ ​WE​ ​ARE​ ​BUILDING​ ​CARDANO by Charles Hoskinson

WHY​ ​WE​ ​ARE​ ​BUILDING​ ​CARDANO by Charles Hoskinson

1. Introduction 
Motivation 
Cardano is a project that began in 2015 as an effort to change the way cryptocurrencies are
designed and developed. The overall focus beyond a particular set of innovations is to provide a
more balanced and sustainable ecosystem that better accounts for the needs of its users as
well as other systems seeking integration. 
In the spirit of many open source projects, Cardano did not begin with a comprehensive
roadmap or even an authoritative white paper. Rather it embraced a collection of design
principles, engineering best practices and avenues for exploration. These include the following: 
● Separation of accounting and computation into different layers 
● Implementation of core components in highly modular functional code 
● Small groups of academics and developers competing with peer reviewed research   
● Heavy use of interdisciplinary teams including early use of InfoSec experts 
● Fast iteration between white papers, implementation and new research required to 
correct issues discovered during review 
● Building in the ability to upgrade post-deployed systems without destroying the network 
● Development of a decentralized funding mechanism for future work

● A long-term view on improving the design of cryptocurrencies so they can work on 
mobile devices with a reasonable and secure user experience 
● Bringing stakeholders closer to the operations and maintenance of their cryptocurrency 
● Acknowledging the need to account for multiple assets in the same ledger 
● Abstracting transactions to include optional metadata in order to better conform to the 
needs of legacy systems 
● Learning from the nearly 1,000 altcoins by embracing features that make sense 
● Adopt a standards-driven process inspired by the Internet Engineering Task Force using 
a dedicated foundation to lock down the final protocol design  
● Explore the social elements of commerce  
● Find a healthy middle ground for regulators to interact with commerce without 
compromising some core principles inherited from Bitcoin 
From this unstructured set of ideas, the principals working on Cardano began both to explore
cryptocurrency literature and to build a toolset of abstractions. The output of this research is
IOHK’s extensive library of papers, numerous survey results such as this recent scripting
language overview as well as an Ontology of Smart Contracts, and the Scorex project. Lessons    
yielded an appreciation for the cryptocurrency industry’s unusual and at times
counterproductive growth. 
First, unlike successful protocols such as TCP/IP, there is little layering in the design of
cryptocurrencies. There has been a desire to preserve a single notion of consensus around
facts and events recorded in a single ledger, regardless of whether it makes sense.  
For example, Ethereum has encumbered enormous complexity attempting to become a
universal world computer, but suffers from trivial concerns potentially destroying the system’s
ability to operate as a store of value. Should everyone’s program be a first class citizen
regardless of its economic value, cost to maintain, or regulatory consequences?  
Second, there is little appreciation for prior results in mainstream cryptographic research. For
example, Bitshares’ delegated Proof of Stake could have easily and reliably generated random
numbers using coin tossing with guaranteed output delivery, which is a technique known since
the 1980s (see the seminal paper by Rabin and Ben-Or). 
Third, most altcoins (with a few notable exceptions such as Tezos) have not made any
accommodation for future updates. The ability to successfully push a soft or hard fork is pivotal
to the long-term success of any cryptocurrency.  
As a corollary, enterprise users cannot commit millions of dollars worth of resources to
protocols where the roadmap and actors behind them are ephemeral, petty or radicalized. There

WHY​ ​WE​ ​ARE​ ​BUILDING​ ​CARDANO by Charles Hoskinson