At the Cardano Summit, IOHK announced a collaboration with Ergo, Nervos, and Topl to create the UTXO alliance. Today, we’re delighted to welcome a new alliance partner – Komodo.

Komodo is an open-source technology provider that offers all-in-one blockchain solutions for developers and enterprises. Komodo works closely with organizations that want to launch branded decentralized exchanges, cross-protocol financial applications, and independent blockchains. Komodo's flagship end-user application AtomicDEX is a non-custodial multi-coin software wallet and atomic swap-powered decentralized exchange rolled into one app. AtomicDEX and its underlying technology – Komodo AtomicDEX API – is compatible with 99% of cryptocurrencies in existence and offers the widest cross-chain, cross-protocol trading support in the entire blockchain industry.

“UTXO blockchains lay the basis and undisputed foundations of today’s blockchain industry. UTXO technology reflects Satoshi Nakamoto’s core vision of ultimate (financial) liberty,” said Komodo business development leader, Kadan Stadelman. “On behalf of Komodo Platform and the AtomicDEX team, I am honored to join the UTXO alliance to uphold and advance this vision. I am certain that together with other alliance members, we will bring this technology to the next level. All for one and one for all.”

The UTXO alliance will facilitate cross-ecosystem initiatives to extend the capabilities of UTXO in terms of smart contract functionality. Teaming up with other blockchain industry projects, the shared objective is to foster and support further research, development, and education across the entire space.

The goal of the UTXO alliance is to drive continuous innovation of the UTXO model in terms of interoperability, scalability (sharding, state channels), and smart contract solutions. Enhancing these solutions and driving key initiatives to build bridges between blockchains powers fair and accessible global finance for everyone. This also establishes a collective effort to enforce the development and functionality of UTXO-based ledgers. Other projects using this model include NEO, Bitcoin, and its derivatives like Bitcoin Cash, Litecoin, and Zcash.

Why UTXO matters

The unspent transaction output (UTXO) accounting model guarantees security, data privacy, and scalability at the core of financial activities. UTXO models foster scalability, as multiple UTXOs can be handled simultaneously, and ensure enhanced security as the overall stake is not aggregated into a single account.

UTXO is a more secure alternative to account-based models (used by Ethereum, for example). Unlike UTXO-based ledgers, account-based blockchains track the overall balance, and the same address is used every time a transaction is made. This is vulnerable to hacks and hinders scalability, as transactions are processed sequentially, rather than in parallel.

Cardano’s extended UTXO (EUTXO) model, for example, supports multi-assets and smart contracts and enables arbitrary logic in the form of scripts. These scripts can be split across different branches enforcing more parallelism and higher scalability.

Alliance member Nervos is developing a permissionless, layer 1, open-source, proof-of-work blockchain protocol focused on creating the foundations for an interoperable universal public network.

“Implementing the ‘separation of duties’ principle, Bitcoin’s visionary UTXO model is naturally more scalable and prone to attacks than the account model,” said Ren Zhang, lead researcher at Nervos. “Many projects sharing this vision provide unique perspectives to extend UTXO’s possibilities. The UTXO alliance enables interoperability and coevolution of its members, providing the world a superset of our advantages.”

Manuel Chakravarty, Lambda scientist and Plutus architect at IOHK added:

The UTXO ledger model, battle-tested by Bitcoin, remains the gold standard for security and scalability. The UTXO alliance is an important step towards ensuring that it will be the gold standard for interoperability, too.

Focusing on interoperability, programmability, and scalability

Centralized finance has been the centerpiece for financial operations for decades. While such a system has served us well enough in general, it still suffers from a reliance on a central authority, exorbitant transaction fees, and unnecessary delays, complexity, and costs in making international payments because of regulatory restrictions. It’s time for change.

Interoperability

Blockchain technology addresses the challenges of centralization by enabling reliable peer-to-peer transactions based on cryptographic proof rather than relying on costly intermediaries. Many blockchain projects have emerged to provide a secure and decentralized environment for financial transactions. These projects vary in terms of consensus algorithms, accounting models, or smart contract applicability focusing on particular use cases (such as finance, data traceability, supply chain management, etc).

Growth is inevitable. However, the speed at which the blockchain landscape matures is challenged by siloed ecosystems and disparate governance rules, technology versions, or functionality support.

As Romain Pellerin, IOHK CTO, said at the Summit:

Mainstream blockchain adoption will pass only through the interconnection of networks, similar to how the Internet was built by the interconnection of intranets and extranets.

So, today, it is important to ensure that the whole industry is driving towards interoperability. Users should be able to transact with each other without being limited to a certain ledger, smart contracts should be supported within different environments, and decentralized applications (DApps) should have cross-platform compatibility. Only such an approach will allow the blockchain industry to reach the full potential of its capabilities, driving further adoption.

Programmability

The UTXO alliance is also focused on blockchain programmability for the creation of DApps and smart contracts. In fact, the design of new languages is required in order to adapt to the specific transaction and data storage management (Ergo’s and Cardano’s EUTXO, or Nervos’ cell model, for example) of the UTXO model. The founding members of the alliance have developed Antara, CKB-VM, ErgoScript, and Plutus as their smart contract languages. Alliance members are sharing knowledge and collaborating in the development of those technologies to rapidly scale the number of use cases that can be run on UTXO-based blockchains.

Also, those languages are built as domain-specific languages (DSLs) on top of common programming languages including Scala, Haskell, C, JavaScript, Go, Rust, etc. However, in certain cases, those common languages do not offer the security or ease of use that smart contract developers require.

To ensure enhanced security and code verifiability, IOHK has chosen Haskell as the programming language for Plutus smart contracts. It is the most widely used functional programming language for application development. Haskell is simple, secure, and formally verified. In terms of adoption, it is suitable for a wide range of financial use cases, while allowing to move funds rapidly, get the right results, and ensure scalability. This programming style fits well within the UTXO model with regard to state distribution and parallelization for enhanced scalability.

Nervos is also working on alternative provably secure programming options that use RISK-V compilers to support common programming languages with CKB-VM. Topl, on the other hand, has been working on a chain program engine proof of concept, which is basically an abstraction layer on top of the UTXO model that allows working with shared state execution environments. It uses a pointer registry and a series of UTXOs (represented as atomic data elements in ledger state -i.e., boxes-) to reconstruct an execution context for evaluating program method call transactions.

Taking into consideration different development efforts, the UTXO alliance will be exploring the best-case scenarios to create a unified smart contract ecosystem where a variety of programming languages can be compiled and used on different blockchain platforms. This will be instrumental in ensuring better interoperability between blockchains.

Scalability

As a network grows, it is also important to take into account its scalability capability in terms of transaction processing and throughput. The UTXO model is different from the account-based one, as it functions based on the local state, and thus requires a different programming approach.

These two models have different properties and offer a different set of trade-offs, different pros and cons. The UTXO model ensures determinism, predictability and scalability by managing local states (the local portions of the overall graph of transactions) while the account model facilitates the development of use cases that rely on the global state (the whole graph of transactions needs to be processed before validation).

Hence, the UTXO model offers valuable properties of ensuring the execution of transactions and contracts prior to their submission on the chain with no surprises in terms of fees or validation. Also, the UTXO model can provide better scalability as it is simpler to shard a graph of transactions by definition by dividing into a set of sub-graphs.

It is also easier to detach a particular transaction or set of transactions (that transport data, scripts and assets) to continue activity off-chain before coming back with a result on-chain which ensures scalability by off-loading activities from the mainchain. IOHK, for example, has developed Hydra state channel solutions that increase the system throughput and allow running multiple operations in parallel without compromising scalability. You can find out more about scalability by reading about concurrency on Cardano and the Hydra approach.

Combining forces for the common goal

The UTXO alliance collaborates to advance the UTXO model while developing a universal UTXO standard. It aims to provide ada holders, cryptocurrency users, enterprises, and the developer community with a range of solutions that do not lock them into a single standard. For this, the alliance will be conducting academic research and releasing a number of papers that underpin secure and scalable smart contract development based on the UTXO model.

While interoperability is key, it is also crucial to provide blockchain solutions for increased funds security, scalability of transaction processing, and, of course, extended functionality granted by smart contracts.

Alliance member Topl has developed a blockchain built to be an impact monetization engine. James Aman, Topl founder and CTO said: “Extended UTXOs enable novel methods of computation in DLT systems that bridge the gap between hard-coded protocol behavior and smart contracts. EUTXOs enable users to engage in complex interactions while retaining full local verifiability even from light clients.”

To enable the possibility of utilizing various features in a blockchain-agnostic way, the alliance is committed to addressing such instrumental questions as:

• how to seamlessly transfer data between different blockchain environments
• what is the ideal size of data to be used in transactions
• what should be the speed of data processing
• the transaction cost, etc.

Thus, the alliance focuses on the mechanism that enables seamless and secure transactions between different blockchains to foster the greater adoption of blockchain technology. This will also drive the development of solid DApps and DeFi solutions.

Alex Chepurnoy, the co-founder of alliance member Ergo, added: “While it is well-known that UTXOs are better for blockchain scalability and simpler off-chain protocols, the extended UTXO model also allows for novel on-chain DeFi constructions with interesting properties.”

This is only the beginning, and we are currently looking into collaborations with more ecosystems to pioneer improvements of the UTXO model, investigate how the common knowledge and technology stack can improve scalability properties, and contribute to open-source research. We’ll keep you posted as the alliance grows.

Visit the UTXO alliance website to find out more, join the alliance or contribute to the research.

The recent two-day Cardano Summit offered the perfect opportunity to interact with the global developer community. This landmark event became the stage where Cardano, its partners, and developers came together to form a synergistic whole of creativity and interaction. This collaboration yielded some impressive results.

IOG teams organized, or were closely involved with coding challenges and hackathons that served to showcase the evolving potential of Cardano for hosting decentralized applications (DApps) and smart contracts. We learned a lot from these experiences, and had a lot of fun doing it.

Two particular events stand out: the Plutus Capstone Challenge, which was organized and hosted by IOG (special hat tip to the IO community team’s Matthew Capps for his efforts), and the WyoHackathon, an event that ran concurrently to the Cardano Summit. IOG teams helped organize some of the challenge categories at this event, with IOG's Hernán Rajchert and Pablo Lamela acting as judges.

Plutus Capstone Challenge

Cardano has reached many milestones in recent months, including the delivery of a ‘programmable’ mainnet and smart contracts with the Alonzo hard fork.

A new development ecosystem is now emerging, with the Plutus Pioneer program as one of its cornerstone community initiatives. Two cohorts have graduated since the program's launch in early March 2021, with over three thousand taking this valuable primer in Plutus and functional programming.

As well as a celebration of the journey so far, we wanted to use the Cardano Summit to recognize our Plutus Pioneers and Plutus developer partners and offer them the chance to showcase their skills with a ‘capstone’ event.

Our Summit Capstone event brought together developers from around the world to solve coding challenges. The challenges were specifically chosen to provide tools that the whole community could use to help them build Plutus decentralized applications (DApps), a chain index explorer, for example. The event consisted of a per-region 8-hour period, following the sun from Asia-Pacific, through Europe, and to the United States. The event ended as the sun set on Saturday.

About the event

For each region, a team of experienced Plutus engineers from IOG and five partner companies mentored the participants. We kept the Capstone deliberately low-key and informal – a learning experience, and ‘testbed’ for future events. Still, participants were eager and took the challenges seriously. In particular, the IOG team was struck by the attendees’ desire to work together and invest longer than the allotted time in working out complex solutions.

We received very positive feedback on the communication and organization of the event itself, and especially on the quality of support provided by the Plutus experts at IOG, Metalamp, MLabs, Obsidian, and DQuadrant. Three of our mentors were graduates from a 2020 Haskell training course by Dr. Lars Brünjes. It’s fantastic to see this positive evolution, as these graduates have now reached a stage where they are able to help developers build Plutus applications. We also saw the beginning of the use of Cardano Stack Exchange, with problems being posted, soon followed by solutions.

By the end of the event, teams of pioneers had made 16 polished submissions, reasoning about and attempting to solve challenges. These included NFT-authentication for DApps, distribution tools for Cardano-API wallet-funds, designing a trinket-to-gold ‘smelter’ game for concurrency, and many others.

Apart from the satisfaction of bringing Cardano developers together in this celebration of our budding Plutus community, the enthusiasm and positive uptake of this foundational coding challenge encourages us to run more in the future. We plan to extend competition periods, include team events, and turn on event marketing to bring the whole developer ecosystem into the fun.

The winners

This Plutus Pioneer Capstone brought together Pioneers, our partners, and our IOG teams in a synergistic effort that really paid off.

The winners of the Capstone event 2021 were, by region:

APAC Asia Region

• NFT Authentication Tool, by ganesh#9022 - $5,000 prize

EMEA Europe Region

• Cardano-CLI Wallet Test Tool, by domy2018developer#8139 - $2,000 prize
• Cardano-CLI Transaction Editor, by #Titan-c#2872 - $1,000 prize
• Cardano-CLI Integration Testing toolkit, by flippy#1542 - $500 prize
• "Tokenomia" - Native Tokens Toolbox, by Nicolas Henin [Smart Chain]#7822 - $500 prize

USA Region

• Win-win Dispute Resolution Application, by mks#4918 - $5,000 prize
• PiggyBank Savings Application, by eponymousEli#4492 - $3,000 prize

It was a great start to IOG’s plans for similar events over the coming months. Congratulations to all the winners and thanks to everyone who took part.

WyoHackathon 2021

Meanwhile in Laramie, Wyoming, there was a weekend event that ran from 6pm on Friday September 24th to 9am on Sunday September 26th, with people taking part live from the University of Wyoming, or online from anywhere in the world using Discord and submitting their entries through DevPost. Representatives from IOG contributed to the event by helping with some challenge categories and acting as judges.

The WyoHackathon featured several categories, with 140 participants and 20 submissions registered in total.

The IOG team helped to organize two Marlowe-related categories.

• Marlowe contracts - Find existing financial agreements that could be modeled as Marlowe contracts and develop them inside the Marlowe Playground
• Marlowe future - Envision how you might modify the various components of the Marlowe Suite

Prizes

There were five submissions to the Marlowe categories, and the prizes were distributed as follows.

The winning entries for the Marlowe contracts category were:

• #1 ($5,000 prize) - Pass through billing - Considers the scenario where a vendor resells or lends a product to a client and takes a commission depending on whether there is a dispute.
• #2 ($2,000 prize) - Pizza delivery - A contract that gives a partial (or full) refund, depending on how late the delivery was. The implementation only asked the client, so it didn’t consider the possibility of a malicious client.
• #3 ($1,000 prize) - Turing toil - Uses a hypothetical oracle that returns muscle strength to incentivize two gym buddies to motivate them and motivate each other.

There was just one winning entry for the Marlowe future category:

• #1 ($1,000 prize) - Company Merger - Takes stocks from two different companies and combines them, considering the value of the original stocks according to a hypothetical oracle.

We would also like to thank Colin Hobbins from the Plutus engineering team for participating on-site on the presentation of the Hackathon, and Kegan McIlwain and Stone Olguin for supporting participants on-site and over Discord.

Speaking about the event, IOHK researcher and developer Pablo Lamela said 'It was very refreshing to see how original all the submissions were. I think this kind of insight will help us know how to make Marlowe even better and more useful for users.'

Conclusion

The Capstone event confirmed that there is great interest in Cardano amongst the developer community following the Alonzo update. Cardano is now a versatile, scalable platform that supports DApps and smart contracts, something that has been warmly welcomed by the wider community.

The Summit was just a 48 hours-long event, but that doesn't mean that our close collaboration with the community ends there. Quite the opposite. We will continue developing and expanding Cardano's features over the coming weeks and months, providing the developer community with the required tools and support to interact with our ecosystem.

Catch up on all the announcements and sessions from the Cardano Summit 2021 website and IOG’s Twitter.

How do you close out an event like the Cardano 2021 Summit? With dozens of speakers, the announcement of a host of new deals, and the whole thing taking place live in six locations worldwide and watched online at more than 40 community hubs and in tens of thousands of homes, it’s certainly a tall order.

Ideally you’d want to reiterate the main points of the event, unpack the insights that emerged from getting all those brains together – and then give a clue to what might be coming next. 

The task fell to an appropriately high-powered panel, brought together on the stage at Laramie in Wyoming, the leg of the event attended by Charles Hoskinson, chief executive of IOG. As well as Hoskinson, the panel consisted of Romain Pellerin, IOG technology chief; Jerry Fragiskatos, commercial chief; Joel Telpner, head of legal; Frederik Gregaard, boss of the Cardano Foundation; and a non-IOG local hero, Caitlin Long, the founder and chief of Avanti Bank and Trust. The moderator was Rob Adams, IOG vice-president of corporate strategy. 

Panel moderator - Rob Adams, IOG vice-president of corporate strategy

Adams set the scene by saying that the panel was really about taking the blockchain industry from niche to mainstream. His skillful interjections guided the speakers through the themes of the event: utility, governance, adoption, and impact. Would one of these prove most salient in the future trajectory of blockchain, led by Cardano? Were there any clues as to where it would all go next?

One clue came from the reactions of the local audience in the US. Any point made by the speakers about preventing the infringement of individual liberty got a cheer. Stop corporations stealing our data: cheer. Educate legislators to be more blockchain friendly: cheer. Stop governments from misleading the people and make elections fair and transparent: big cheer.

You need a technology that can cross borders, and legacy systems are very slow to create those bridges – Romain Pellerin

Kicking off on the subject of adoption, Pellerin pointed out that blockchain technology had come about in response to a need. In the future, therefore, adoption and utility would remain intimately linked. ‘Blockchain is not here, you know, randomly. I think it's the technology of its own time,’ he said.

‘In a world that globalized itself, you need a technology that can cross borders, and legacy systems are very slow to create those bridges.’ He later suggested that blockchain was ‘the system’ to program interoperability, not just between chains but wherever it was needed.

If Pellerin seemed to suggest that adoption and utility would take care of themselves, Fragiskatos introduced a note of caution. Given that the coming wave of new adopters would include large enterprises and governments, extra care was warranted, he said. ‘My preference is that it continues to be grassroots – that is, powered by the individuals first – and that small businesses are built on top of them. And then enterprise and governments come last, in my personal point of view,’ he said, bringing the first big applause of the session. 

My preference is that blockchain adoption continues to be grassroots and be powered by individuals first – Jerry Fragiskatos

After all, he added, when an economy is healthy, it is consumer based and largely run by ‘small businesses first, and then enterprise and governments last. And I'd like to keep it that way.’ 

As well as the first clapping and cheering, Jerry’s comments brought the evening’s first appearance of the specter of big business, and even bigger government. Picking up on that theme, Long spoke of the ‘stunning’ backwardness of most banking technology. ‘[Larger] enterprises really do make things complicated,’ she said.

‘They don't operate by the Kiss principle: “Keep it simple, stupid.” And I think many blockchain developers do because we're operating on common, open, open-backend platforms. And the whole idea of that is so that anyone can join the networks.’

It's the classic Gandhi phrase: First they ignore you, then they laugh at you, then you win – Caitlin Long

Long was soon to raise a cheer from the local audience by alluding to the success the Wyoming community has had in shaping blockchain-related laws. Unfortunately, but not surprisingly, the breakthrough had been largely ignored by the (centralized) powers that be. ‘It's the classic Gandhi phrase: First they ignore you, then they laugh at you, then you win. I'm not quoting that correctly, but that's the idea!’

She then called on the Cardano community to hold The Wall Street Journal to account for not referring to Wyoming in its online article that day about stablecoins. ‘So by the way, I’d appreciate it if you all blow this up on social media – because they love to ignore us.’

This call to action, albeit only online, raised a big cheer. 

It looked like Gregaard, in his flat cap, might capitalize on the rabble-rousing theme. But his hour as an agent of societal change had not yet come. Instead, he made a cogent point about the difference between the first wave of adopters, such as gamers, who were ‘born digital’, and larger, older industries, most of which would remain ‘non-blockchain-enabled’ and were therefore doomed. ‘The blockchain-enabled win every single time,’ he said. 

The next wave of adoption would therefore come not from the very large (who can’t or won’t change) or the very small (who don’t need to), but from a middle ground, Gregaard said, citing the SAP and the Oracle financial systems. ‘It’s going to be parts of banking, [and companies] in the middle of the enterprise process. That’s the way I see it.’

Maybe . . . maybe not was the response from Hoskinson. No matter how well you plan, you don’t really know where the next wave will come from, he said. You can always be proved wrong by what people actually want – like people preferring cat videos to his own ‘Ask Me Anything’ sessions on YouTube. ‘Really, the key is just to be flexible and adaptive enough that whatever that future happens to look like, you'll be able to be competitive in it.’

Now it was his turn to pose a question. ‘What consumer experiences are now enabled that were not possible before?’ he asked. A great example of this was when smartphones revolutionized GPS. One day you’re having to print out a map from MapQuest; the next it’s all done for you live, right in your hand. The combination of the iPhone and Google Maps proved to be technology’s answer to the cat video which effortlessly draws everyone’s attention.

Hoskinson’s first contribution to the debate was therefore to warn against making a fetish of ‘perfect, top-down planning’. Rob then mischievously pointed out that the big wins celebrated at the summit had been with big enterprises and governments. Was this a contradiction?

No, said Fragiskatos. The point is that you’re always dealing with people, individuals.  ‘Enterprise and government serve consumers, ultimately. So I don't think it's contradictory at all. I'm just saying that the power should lie with the individuals. Enterprises have their role in that; it just has to be in the right context. And it should be from the bottom up. [This] is the ethos of our industry [and] is what makes for a healthy society . . . Our industry has a part to play to keep democracy healthy.’

Hmm, this was a great point and it really made me think, and perhaps the audience as well. Because that’s not just governance; it’s governance squared. The internal governance of blockchain makes its influence felt in the broader governance of society – government, in fact. 

Pellerin jumped on board. ‘The bottom and the top – I don’t really understand that. It's always about people,’ he said. The audience roused to his next point, about user inconvenience. This resulted from a ‘friction’ between technological ‘silos’, Pellerin said. ‘Try to move your content from Facebook to Instagram or WhatsApp – it's a pain and often it's not even possible. You have to do that manually. Right?’ 

Although networks were ultimately just people, we had become cut off from each other, ‘lost in silos’, Pellerin said, whereas what was needed was a ‘frictionless experience across businesses’.

Telpner expanded the theme to regulation generally, building on Long’s comments about banking in her home state. ‘The important thing about what Wyoming is doing is they're not saying no regulations – they're saying the right kind of regulation,’ he said.

The important thing about what Wyoming is doing is they're not saying no regulations; they're saying the right kind of regulation – Joel Telpner

With disruptive technology, ‘regulators are playing catch-up, and sometimes it's easier for them to simply say No than to understand how we take existing regulatory regimes and modify them, and do what we need to do to facilitate the new technology.’ 

Fundamentally, Telpner said, everyone agreed on the important things: ‘ideas of protecting consumers, of preventing fraud’. If most regulators in developed countries hadn’t figured out yet that blockchain was a better way to do those things, their counterparts elsewhere could see the opportunity. Smaller countries had a relatively free hand because of the lack of cumbersome legacy systems. Some of the innovations enabled by blockchain in smaller countries would be worth importing to leading nations. 

One example of this was financial inclusion; another was the question of identity. Pellerin pointed out that ID was always going to be the logical ‘entry’ into the blockchain system, with ‘selective disclosure’ coming later if you’re lucky. But Long again won the audience’s heart by making a key distinction: ‘Governments control the evidence of identity. [But] what is identity? It's the essence of your being – it's governed by natural law. It has nothing to do with any ID or a piece of paper or any other instantiation of who you are. It is who you are. And so that's important.’

When the applause died down, she added: ‘Because right now there are 15 million people who have come into the United States that do not have those papers that can provide evidence of who they are – and that's the unbanked.’

Businesses tended to do a better job than governments on this, she said, but the problem with handing over your ID to a bank is that it can share that information with other institutions, and ‘data in motion is usually less secure than data at rest’ – especially when it’s not encrypted. 

Hoskinson interjected at this point. Perhaps the governance talk was getting a bit political. ‘Just real quickly, sorry. So IO is not building any vaccine passports – just pointing that out.’ It may have received the biggest cheer of the evening, but the comment led on to a series of very serious points about the notion of identity.

‘The reality is that identity is not a singular thing. You have a person, but that person can have many different identities. They have online identities, work identity, family identity, religious identity, the identity when you go see the in-laws.’

Being able to take back control of all those different identities was the ‘magic’ of DIDs, or decentralized identifiers, Hoskinson said. ‘Reputation is what matters about identity . . . and it's always connected to a context. Do I want to hire them? Do they want them to take care of my kids after school?’

At present, whoever controls society controls people’s identity. ‘But we no longer need central authorities and institutions to be the connecting tissue to move reputation around.’

Legacy big tech groups ‘all in their own way are creating identity systems, and they're embedding them into consumer products. And they put clever little names on it, like a Google ID or Google authenticator or Apple Pay.’

Hoskinson painted the picture of a battle for identities, a battle that would be fought within a fixed time window. ‘And whoever wins that will have a profound impact on your ability to use your life . . . Controlling our own identity and having it be self-sovereign is [one of the] major challenges in the 21st century. It’s foundational and . . . [one that] this industry has to win to survive.’

Telpner added that while blockchain could provide the tools to take back personal data, it was up to the people themselves to tell the banks: ‘This is ours. This is not yours.’ It had cheer written all over it, but the audience stayed silent. Perhaps they were thinking. 

Fragiskatos knew how to engage the audience in the ID discussion. ‘I think there's business, and there's personal. This one [ID] is very personal. I am sick and tired of my accounts being compromised. Last time I checked every single one of my accounts was compromised. And then you've got companies making money from my data. It makes you feel powerless because – Oh, it's just the way it is. Right? That's the feeling we've become accustomed to. I think [blockchain] is just the better system, period. And it will ultimately be adopted everywhere.’

The crowd loved it. Gregaard then tied the question back in with blockchain’s bigger ambitions, as a corrective to state overreach. ‘I really think we're going to lose that war,’ he said with intense conviction. With his reference to war, it was clear he was addressing not just Jerry’s frustration with data compromise but also Hoskinson’s comments about a war for control of identities. 

If we cannot show meaningful participation ... and get people to really show their opinion, we're just not going to win that [battle against state overreach] – Frederik Gregaard

‘If we cannot change governments, if we cannot show meaningful participation with a non-fungible voting system and get people to really show their opinion, we're just not going to win that. The only way we can win that is to prove that we can create a trusted identity on a blockchain, which holds more trust than what the enterprises and the banks are collecting . . . And if we're not able to do that, then we lost before we even started the fight.’

The next question came from Hoskinson himself: ‘What’s the next big thing?’ It seemed to be directed at Gregaard, sitting to his left.

Gregaard said it was interoperability of existing systems, not just the chains, to make it easier to get crypto into fiat currency, among other things.

For Telpner the next big thing was clear: governance. Certainly it was the theme that kept rearing its head in almost every discussion. Fragiskatos said it wasn’t necessary to know the next big thing, but his bet was that it would be the disruption of social media. 

To finish up the conversation, Hoskinson took to the stage alone, and took us back to first principles. There was an ‘honesty gap’ in the blockchain industry, he said, which had ‘written a lot of checks’ that it had yet to cash. The focus needed to be on finishing the things that had been started. 

‘It's one of our biggest failings. We tell people, Use this application, do this thing, and then it blows up and tens of millions and hundreds of millions, then billions of dollars get lost. Yet somehow it doesn't seem to get better – it just seems to get worse.’

Surely that was a governance issue? Perhaps, but if so it was one that would require more adoption to fix.

Addressing the worsening moral hazard around promises, Hoskinson said, would require higher standards, better certification, auditing, and rigorous coding practices. To that end he was collaborating with experts in formal program verification. ‘The kind of guys you call when you want to build a train, an airplane, or a car and make sure the thing works and you live to tell the story.

Somehow, some way, we must build a government for Cardano together, one that works – Charles Hoskinson

‘How do we take these amazing innovations, born of academia and forged in industry, and bring them together and apply them to our industry in a way that scales down to an agile development team – not PhDs living in a lab with million-dollar budgets, but entrepreneurs, two, three people working together?’

The answer was one that seemed to bring together all four themes of utility, governance, impact, and adoption. ‘It turns out there's this beautiful isomorphism between certification and an open app store right now,’ Hoskinson said, with a twinkle in his eye.

An app store like this would be a world away from the ‘curation model pushed upon the consumers’ thus far, where you can only hope that if an app is in the store then someone has done the checking, and where sometimes it is decided ‘that people shouldn't be in the app store because maybe they compete with Papa Apple, or Google, or Microsoft’. 

Hmmm, was this a governance issue? No, wait: maybe it’s adoption. Utility? OK, it’s all of them. 

‘What if you create a store where it's always open, anybody can come, anybody can build? You just submit a transaction to the blockchain – it's there. But because you have the ability to certify, the way it gets visualized and presented, how it appears to the consumer, is different. The more work you do to prove the things you have are high quality, not a scam, secure, the better it appears. The less work you do, the worse it appears. Pretty simple concept, right? 

‘You preserve openness, but you leave the burden on the [app developers] to prove to the people who are going to be downloading this, using this, trusting it with their identity, their money, their privacy – you leave it to them to prove to you that they've done their homework and they've done it right. What Cardano is doing with so many great partners in the utility track is delivering that to you.’

That may have been part of the utility track, but as so often the other tracks of adoption, impact, and in particular governance seemed to peep through. And it was to this point that Hoskinson had the (almost) final word. ‘Oh, governance. This is the hardest one of all of them. Boy! Why? Because do we have a government that works!?’ 

There followed the biggest non-cheer of the night. A deafeningly silent anti-cheer. 

‘Exactly,’ Hoskinson continued. ‘The one thing I know from the 52 countries I’ve been to in the last few years, you know what? The number one complaint is: My government doesn't work. The Swiss say it, the Russians say it, the Chinese say it, the Japanese say it, the Americans, we say it. No one's happy with their government. So yet somehow, some way, we must build a government for Cardano together – that works. Good luck! And you know what? We're going to get it done.’

Catch up on all the announcements from the Cardano Summit 2021 website and IOHK’s Twitter.

Reporting by Dominic Swords.