One of the scariest prospects for blockchain technology is the idea of entrusting your wealth and identity to a technology that still isn’t entirely ready. It’s the Jurassic Park problem: developers are so preoccupied with what smart contracts can do that haven’t always spared enough thought for what they should do.
And you don’t have to look far to see the consequences. As far as we know, Gerald Cotten was not smuggling dinosaur embryos at the time of his death, but the rest of the QuadrigaCX debacle could have come straight out of Isla Nublar.
There are plenty of other examples. An uninitialized variable in the Parity wallet cost developers a quarter of a billion dollars, while TRON developers seem to have borrowed some of their code from African frog genes.
That hasn’t stopped new generations of evangelists from thinking they can do it better. Much like the original dinosaur franchise, Ethereum has generated a host of clones and sequels, most with their own cautionary tales about technology and ethics.
Welcome To Cardano Park
One of these projects is Cardano, a three-way collaboration between Input Output Hong Kong, Emurgo and the Cardano Foundation. The creator of Cardano, Charles Hoskinson, is a Bitcoin veteran and an alumnus of Ethereum’s early days.
In some ways, Hoskinson resembles another dino-cloning visionary. In his Twitter profile, Hoskinson is holding a large, tame raptor, of the feathered kind. Once my mind had made that association, there was no way to unsee it.
But Hoskinson has more in common with Jeff Goldblum’s Ian Malcolm than with Sir Richard Attenborough’s John Hammond. Like Malcolm, he’s a mathematician by training—and when it comes to smart contracts, he’s one of the few urging caution and deliberation.
“What we’re doing with Cardano is taking a very-first-principles approach,” Hoskinson told me at a press tour several weeks ago. Cardano started in 2015, the same year that Ethereum launched, and it has yet to release a completed blockchain system.
“With Cardano, we thought about this and we didn’t say we knew everything,” Hoskinson says.
Instead, the project partnered with universities and set up research labs to explore the potential problems, and their solutions. Cardano scholars have produced over forty academic papers, many of them peer-reviewed on subjects ranging from smart contract development to producing a proof-of-stake algorithm which is provably equivalent to PoW in several key properties.
All that waiting may have cost Cardano billions in market capitalization, but it also spared investors from the errors that afflict other blockchains. “By rushing, it’s hurt the consumer horrifically,” Hoskinson emphasized. “It’s hurt them with privacy, billions of dollars of hacks, the DAO hack, the Parity bug, every day there’s an issue with EOS where people are losing money.”
What Happens When Cardano Gets Hacked?
For Hoskinson, the DAO crash embodies everything wrong with the world of smart contract blockchains. The problem is not the fact that a program had a bug, nor the fact that the bug was successfully exploited. For a successful smart contract platform, both of these problems are inevitable. They will happen with Cardano one day, too.
The real problem, Hoskinson says, is that “it wasn’t clear what the burden of consent was.” Ethereum developers had put their trust in code, and were not prepared for code that does not behave as designed.
Once the raptors left the paddock, there was no plan to get them back in.
After that, the only remaining option was a hard fork, which not only split the community, but also ditched the principle of immutability. If Ethereum can be forked once, it can be forked again.
Preparing For Cardano Classic–Or Cardano Cash
IOHK has a few ideas which could help to prevent future DAO-like crises—and when they do occur, to keep the island from being overrun.
The first is better fences. Instead of the notoriously buggy Solidity, Cardano’s contracts are written in Plutus, a strictly-typed programming language specifically designed for financial decentralized applications. “The advantage of having Plutus as a programming language,” Hoskinson explains, “is we simply don’t suffer from the type of bugs that created the DAO incident to begin with. We can get strong formal guarantees that these things can’t happen.”
But more importantly, Cardano is designed with features that make it easier to resolve problems before they get out of hand. In addition to recovery mechanisms, which allow smart contracts to be amended after they are deployed, “Cardano’s rolling out a bunch of governance features that are going to allow us to poll people,” Hoskinson says. “It’s a combination of better democracy, better tools, better best practices, and also a greater appreciation and consumer knowledge.”
If a future Cardano hack occurs, there will be no confusion about what the community wants. He added:
These features may end up helping Cardano outlast some of its predecessors as well. “There’s a big sustainability issue with Ethereum,” Hoskinson says. “We don’t have good answers to questions like who pays and who decides.” At present, the big decisions are being made and funded by the Ethereum Foundation, the only body with a large enough budget to fund serious development.
But that won’t last forever, and programmers don’t work for free. “What happens five years, ten years, fifteen years down the road?” Hoskinson asks. “It’ll be subject to the Golden rule: he who has the gold makes the rules.”
To solve that problem, Cardano developers have proposed a built-in treasury system–similar to Zcash’s developers’ fund or Dash’s treasury system–allowing the community to continue building, and repairing, the blockchain long after IOHK has left.
Lessons From Spielberg And Crichton?
Journalists are sometimes tempted to root for their subjects. Part of me wants Cardano to succeed – and not just the part that has a few hundred ADA in a half-forgotten wallet. In a marketplace full of hype merchants, Hoskinson is the one of the very few salesmen hawking restraint and caution, and sometimes it does seem as if he’s thought of everything.
“If this is going to be the world’s next money system, identity system, financial system, you have a moral obligation to do things on granite,” Hoskinson said, rapping the table for greater emphasis. “Safe and right the first time. We take the science, we use peer review and formal methods to ensure that the science has been done correctly. That’s our core differentiator.”
Hoskinson is not the first developer to aim for a foolproof system. It’s human nature to to evolve our understanding and control our environment; to try and make our creations perfect. From Frankenstein to Hammond, our fictional doctors are always tinkering… with mixed results.
Our real ones, too. But at least people like Hoskinson acknowledge the impossibility of creating a perfect system.
Nature always finds a way.