hi everybody Charles here I wanted to do a whiteboard video to talk a little bit about a few topics things like native assets captive side chains cross chain communication and so forth so anyway this is gonna be a fun video to shoot yeah let's get to it okay so wow gogans coming along swimmingly a lot of work to do I'm taking a deep dive but a lot of the technology and various things that we have to get done between now and the launch yeah as I mentioned in the summit we are looking up at 120 150 days of work out before the hard fork so at the end of this month in the July product update we're going to talk a lot about go again a lot about where we're going and things like native assets and so forth and the presentations on Koga and the native assets at the summit should have hit YouTube by the time this video comes out so as a consequence if you watch that you can get a really good idea of what's coming and now we have to start talking a little bit about certain choices and design details now I have some strong opinions about these things and hopefully they work their way into the design of the product but I think it's important that we start socializing some of these concepts with the community okay so in the beginning there was Bitcoin and Bitcoin as the first mover is the least sophisticated and the least flexible of all crypto currencies built and basically what only has one asset the BTC the Bitcoin for fans of my youtubing course I did back in 2013 I and unfortunately it has no clue what's going on in the world around it so if you have bitcoin and litecoin for example the state of light coin so basically and we'll use Sigma for the states the state of light coin versus the state of Bitcoin these two systems are not sophisticated enough to really know what's going on for them or their single assets Ledger's si ELLs now the world has moved into an mal system multi-asset Ledger's so instead of saying hey we just have one system and it has Bitcoin or one system and it has litecoin we want to have many tokens so generally how that's done is you have something like ether and that's a base native asset of the system so you pay the transaction fees with that and then you have kind of this assets derived from smart contracts like ER C 20 for example and there's lots of ER C 20 tokens that exist in the etherium ecosystem okay and there are other standards for issuing assets as well however whenever you transact these things they consume ether as a transaction fee okay so we live in a state where there's a lot of these old legacy systems like bitcoin and litecoin and they're perfectly fine however there's single asset Ledger's and they can't really do what's called CCC L cross chain communication and I'm gonna give you guys a paper here okay well fortunately there's no standards for them to talk to each other and so what's happened is instead of trying to get more than more blockchains floating out there people are starting to embed their assets with an existing chains and so we have this thing that came out of the second generation the multi-asset ledger stuff and right now as a multi asset ledger we have ERC 20 is the dominant standard that's been floating around it's not the only standard but it's certainly the most dominant standard so we live in a world as mal we want multi-asset Ledger's we live in a world that wants to do cross chain communication and we live in a world where we would like these assets to be just as good as if they had their own chain in other words the way that aetherium does multi-asset is not so good principally because when you issue your token you're still coupled to the native standard and we'd like that all of the innovations that we have work with each other so you know for example we'd liked in an ideal world for Bitcoin to be able to talk to like coin and we'd like in an ideal world for litecoin to be able to talk to Bitcoin and talk to you theory em and talk to Cardno and so forth so we've actually been thinking about this topic since 2016 actually 2016 and we looked at things like the color coin standard we looked at things like what was happening on etherium for multi-asset NXT assets you guys might remember that and there was hundreds of little ideas and float around the space for a long time and we've been thinking about cross chain communication for a long time and we've looked at it and things like NEPA PALS you may have seen our proof of stake side-chains paper that we came out with okay and recently we wrote a cross chain communication Sok paper so basically it's a rollup of all the knowledge about cross chain communication we prove some interesting results with that so we've been at this game now for well more than four years and we're now getting the point where card on o is going to go from a single asset ledger to a multi asset ledger version one okay so version one is kind of like aetherium in that transaction fees will be paid with ada that's our current design of the system and unlike aetherium a user issued assets you ayase will be treated like ADA so all you do have to pay ADA as a transaction fee for this moment your assets are actually going to be treated like ADA they won't be differentiated it's not the case with the generation to mal so if you go to ERC 20 this is a smart contract it's not ether it's different it's you can do lots of things the same way but it is treated differently in the system with our system we basically say hey your asset is going to be counted for and treated using the same you TXO system as ADA itself does so the system doesn't differentiate the two and we have some beautiful papers we've written on this and we think it's a superior model but you know there's a lot of ideas like where do these user ask the issued assets come from and also can we have our transaction fees in the native asset itself so right now we're at version 1 of the multi-asset ledger but as with all things we intend on having future iterations of this and they can be rolled out pretty rapidly as extensions or additional standards in the system and it's definitely possible to imagine a system for the native asset itself it actually pays transaction fees and also when we talk about user issued assets in cross-chain communication you may have noticed that I've been talking to the litecoin guys well here's an idea let's say that litecoin implements one of our ideas NEPA paused and basically what this does is it gives us a succinct proof I said of two things coins exist and not double spent okay what does that mean it means that when you see a transaction coming from a NEPA pal compliant chain without possessing the full chain it's succinct so like it's small it's like the size of a transaction you're able to verify that those tokens are real and they have not been doubles fat so what this effectively means is that you could issue a transaction from the litecoin network if they support NEPA files transaction plus proof into card ATO and then what that can do is go to basically a minting contract and create something called wrapped light coin okay or you can call it aka a light coin or see like corner yeah probably that would be a better term for Cardinal like coin okay now why would you want to do that well hang on a second here if we had the native asset itself paying transaction fees then what would occur is this transaction to mint light coin in the network would then create a de and see like coin you'd have this other asset floating around the system and that other acid that's floating around the system could also be used as fuel for computation so you could use this for Plutus smart contracts and then suddenly like coin now has smart contracting capabilities and the people operating card on o now get paid for those contracts that are powered by litecoin and like coins so when they get their staking rewards they'll get 800 rewards and they'll also get to see like point which is redeemable for light coin because you can send it back how do you do that you take your see light coin and you burn it for example so you destroy it and then this gives you a proof to redeem on litecoin so using the magic of neetha pouce litecoin can set a transaction with a proof in the cardinal you can mint a wrapped like coin that seed like coin could then be used to power things within card ATO itself those transaction fees would then go to the delegator the end state pull operators and so they get both Ada and like coin for that and that's see like when you have you'll be able to burn it to redeem it a lot coin network itself and you could sell it if you wanted to or do whatever you want to deal with that okay so what's the value proposition to like coin my proposition litecoin is they do not have to do a hard fork to do the things that we do on cart Donnell they're partnering in a sense with the Cardinal blockchain okay and using it as a service layer so everything card Auto can do like Lincoln starting field to do the value to 8a holders is they now diversify and they have access to more than just one token and they can use that token any way they see fit and they get basically compensated for that tokens use in the network and in this case the token itself okay so more broadly this brings up this concept of blockchain partnership versus competition okay so there's this question of we have 5000 plus block chains floating around their Bitcoin on down you know the coin Max Keiser seems to really like that now these days all the way on down to whatever it is in the 5,000th place and we tend to look at these things in some zero terms or we say oh well only one is necessary and that's called maximalism so we'll put max for maximalism because max keiser is max okay and then other people say well maybe we're gonna have I'll be an Internet of blockchains all kinds of block chains floating around they all do their different things like card otto has a bunch of things that we do that light coin for example does not do and maybe it's much more important for the IOB concept to say that it's just really important that we can send value in information between these systems and that these systems can start transacting with each other so if chain a consumes services from chain be a pays stakeholders and b a's token and without loss of generality vice versa okay so this is a the model that we are starting to move towards with the cardinal community the Bitcoin maximalist or the opposite who say that all chains are irrelevant except for Bitcoin only Bitcoin is the truth if Bitcoin can't do it it's not necessary and if Bitcoin can do it it can do it better than everybody else even when objective reality gets in the way and if you are part of any other chain you are a scam horrible human being in should be in jail and you're a security and they're not that's maximalism as best as I can understand it right now and that philosophy seems to be fairly regressive but the IOB philosophy there and a blockchain philosophy I'm saying there's going to be hundreds if not thousands of these systems and what matters is the cross chain communication of the standards the move value opens up this concept of partnership basically we can do things for other systems and those other systems can pay us and by us I mean the holders of Ada and the maintainer of the Cardinal ecosystem so the stateful operators who are small businesses they can be bridges they can be Oracles that can be smart contract processors and they charge a fee for services ok so we would love to explore this model which is why I reached out to the litecoin community and I'll reach out to the Bitcoin cash community as well and other proof crypto currencies and what we're going to do is write a lip like coin improvement proposal and what I'd like to do is take the stack that runs the instead of ice test then which is actually still running right now and we can spin it up as an opiate tea cluster or deploy it on the existing network and see if we can implement the native asset standard some form of it a little early and have experiment with native transaction fees there and then basically if like one wanted to they could send wrapped light coin into the ITN and then that wrap light coin would be able to operate as if it was a native asset and it would be able to pay in its own fee so it's as if it was on the light coin Network and it would get all those capabilities that the ITN happens to get and the operators of that network would get those transaction fees as an example experiment so this would be a potential experiment that we could conduct and this is this idea of blockchain partnership where litecoin adds a capability giving the holders of that system the ability to transact into Cardinal in this case a subset the set of card out on the ITN and then that's a safe sandbox for them to go and experiment and do things and play around on things and when they're done they can send the wrap like going back into like coin and voila - what other transaction fees they paid for the experimentation that they're conducting should this model work then eventually we can have hundreds of chains that are regularly transacting back and forth into the Cardinal network through bridges and proofs okay Carano here and you have all these different chains that are transacting into it back and forth and they're paying lots of fees and if we're following that native assets standard it means that the stateful operators are collecting transaction fees in more of assets you get an etf of an industry now this is not the only model that can exist you can have an a maximalist model and if they ever actually implemented this technology it actually would be competitive that they've had since 2014 to do it but they haven't done it and this is this concept of primary secondary chains you called master slave but that language is rapidly falling out of use even in different context but basically we did this in our original white paper we said SL and the CL concept so the idea is that there's one primary chain and that's where the token lives ADA and then that token ADA can be used to power different chains that have different network logic it has different consensus rules it has different legend rules a different computational model and somehow that these chains don't have their own native token rather they are at the service of the primary chain so let's look at this in the context of the ITN so let's say that we modify or Boras and/or Boris now when you're a stateful operator instead of just getting one block you get block card ah no but then you'd also get block CL one block CL to have done block CL n so if your a stapl operator when your job comes up to expand the state of the chain you'll actually do that for each of these networks in addition to SL so you'll generate the normal Cardinal block like all the stateful operators do but then you'll make the block for the next network the block for the next network watch for next network and you'll look up that Network logic and those consensus rules and the ledger logic and you'll follow the computational model and these will all be different okay so Cardno has one flavor but then there's a different flavor for CL 1 CL 2 for example one of these can be an ITN running the evm another one can be in ITN running yella and they don't have a native asset so what happens is that wrapped ADA would be basically used to power transactions in these types of systems okay so in practice you'd have SL that's the main chain that's where everybody lives right now that's what we're doing the hard for gone and that on the 29th and so forth and then you would transact from SL to one of the CLS buy a side chain transaction exactly like or spiritually similar like what I was saying to light coin into Cardinal and then once it's there you have wrapped ADA in CL we'll call this X and then you can use that to run things so maybe you have an aetherium smart contract and we run that in a safety sandbox and or Boris has been built in a way that a modification the protocol would allow stateful operator to basically make blocks in all of these systems so instead of running the state of one system they can run the state of n systems they get inflation for being the SPO for Cardinal so this is where ADA inflation would come from so the state rewards that you have six percent right now and then the rest of these would be TX fees that they would collect for proof of stake actually makes this quite easy to do it's not an overwhelming engineering or scientific challenge there are certain things to think about especially about how you synchronize all these systems and bla bla bla there are a lot of little details that need to be resolved but this is a model that you could have and this was kind of an envision model that came out of block stream when they were talking about side chains they said Bitcoin can be that version of SL and it could be very simple and safe and secure and then you could have a theory of as a side chain of Bitcoin send your Bitcoin into that side chain operate and then send your Bitcoin back when you're done so we have a whole team at i/o global that does nothing but think about cross chain communication and think about side chains and think about proof of burn and all kinds of different mechanisms that move things around and now what we are starting to do is communicate with other projects smaller cap crypto currencies and larger cap and older crypto currencies respectively like light coin for example it's been around since 2011 a lot longer than Cardinal and see if we can convince them to start adopting some of the science that we come up with which will benefit their community the existence of NEPA pals in litecoin will not only give them the ability to transact side-chain transactions to us but give them a better light client experience potentially to the ability to embrace things like chain was mining so you can mind without having the full block chain and a litany of other USPS that come from that and because that standard exists they can start saying such a transactions into aetherium and all kinds of other things so it basically makes your chain much more interoperable and there's no cryptographic downside they don't actually have to worry too much that somehow this can be hacked or something because the NEPA piles have been around for many years for about five years now a lot of science behind a lot of great projects based on and several chains have already implemented it and more more continued to do so and for us on the cardio side it opens up promising new business models we can experiment with those models with the ITN infrastructure and we can talk about native transaction fees with wrapped we can as we move to a multi asset ledger really get specific about what does that mean to us and when we go into different versions of the system what is that going to do and then it opens up the possibility of discussing partnerships where and when this makes sense for example or perhaps we integrate backs or hi for something and we come up with some sort of sharing agreement there and all these things because of Voltaire as we move into 20 21 22 22 it can also be decided with Democratic consent so all kinds of cool things can be done so this is a brief video on interoperability but I think it's a really important one to spark a conversation and get people thinking a little bit about how the world is going to look in 2025 yeah as we kind of get a little bit more evolved in the cryptocurrency space are we going to consolidate to the Bitcoin as king and everything else is evil and wrong and all of our chains are just scams and we're bad people or are we going to move to something a bit more meaningful into an Internet of blockchains in which case when we communicate with other communities it's not saying you should transfer to us sell your coins and come over to our sigh but rather maybe our two systems can coexist and do things for each other for example we have a very sophisticated governance system that we're building for Cardno and this means that Cardno could become a gas of governance as a service platform so if Bitcoin or let's say litecoin for example supports nipa pals they could send in wrapped light coin into Cardinal and we could actually hold votes for ballots and other ideas like point improvement proposals and so forth on the card on a blockchain and then you could actually get a representative sample of the litecoin community because you can look at how much light coins been sent over for that vote and we could even create things where you can create phantom light point where you signal on the light point blockchain to create phantom light coin there but you're not actually moving it so what about voter registration step or something and then you can use the governance service of Cardno to vote on things in the light coin chain for fees in light coin which then get paid to the ADA holders in the sequel operators and you could do this for any change you could do this for all cryptocurrencies Bitcoin cash Bitcoin and so forth and they don't actually need to implement a very sophisticated governance system for that just the bridging mechanisms so this is the example of what happens when you think about partnership is that you say we can do a lot of things not just for our own ecosystem but for all other ecosystems and all they have to do is just enable the chains ability to talk to each other we've gone a really long way since when I first entered the space in 2011 you know back then when we saw all coins they were all just Forks of Bitcoin and they had different consensus algorithms and monetary policy but basically they were just the same code with some cosmetic differences like like coin has script instead of the normal proof of work with sha-256 and the white coin has 84 million coins and it's emission schedule instead of 21 million and there are a few differences here and there but to be honest it's not significant whereas aetherium and NXT and these other second generations just completely new code a completely new way of looking at things totally different algorithms and so forth so there's just been an enormous amount of evolution but one area where we are still failing is there's a tendency to look at things as a sum zero away there's a tendency to look things like maximalists and it's just so counterproductive and it turns people against each other and it causes lots of problems and we as a company I'll global I've invest a lot of time effort money to trying to look at the world a little differently and saying can't we all just get along and do things with each other partner with each other at least on the technology side CEO of iog sometimes there's a bit competitive all CEOs are and not quite quite known for humility but that's okay too you have to be a little crazy and a little arrogant to think that you can go and change the world and build special things but any event this the purpose of this video was just to kind of go over a lot of these concepts and get people discussing and thinking the native asset standards are being solidified a little bit and we'll have an update the end of July on them hopefully we should have a test net with them running sooner than you think and see you guys for a command line we'll be able to start issuing your own assets with test data but it would be really nice to update those standards to start paying in native assets and I think the ITN would be the first reflection for that on our side we'll write a like point improvement proposal at some point and propose it to like point community and see if they want to do something with Nita pals be super cool to do that and if they do that then we could actually begin experimenting with raft like point on the ITN and all kinds of cool stuff there and the more the merrier the more people that can contract with us eventually in 2025 2030 we can converge this idea of Internet of blockchains now in the next generation of the contract which will come after we finish up all the work in the first five years one of our proposals will be to explore this captive sidechain model so you can call like that the cap sure sidechain model or primary secondary or whatever we're going to end up calling it AI and we would like to react or tempura Boris where it's self-evident on how to do this and also generalize the expression of legend rules computational models consensus models and Network logic so that it's easy to be expressed block chains I even radically different systems in a much more generic way explore this with the score X project with Alex chirp annoying which now created ago but that work leaves a lot more to be done and that'll be part of the proposal that we have and it'd be really cool to say hey we could adopt our retired computational models what's really exciting about this concept is if we find that developers really do prefer one model or the other it would be very low cost and easy like a matter of months for us to begin supporting that but then because it's under the umbrella of all the or horse infrastructure and the existing state goals we have we would still preserve all the benefits of our system the speed the scalability the reliability the settlement time etc etc so it's gonna be very easy for us to dynamically adopt things as we go in the captive sidechain model if we want to but you know network effects our network effects litecoins been around for nine years it's gonna be around for another nine years that's a strong community so it does make sense to also explore the partnership model it makes sense to offer new capabilities to things and you know it makes sense to try to help other people along and innovate and it's also really exciting to evolve our multi-asset ledger standards you know above and beyond where they're at ok so that's the video of the day I promised a whiteboard video on some of these topics and concepts I hope this is helpful for everybody in the show notes I will put a link to the NEPA pals website that we have as well as the two papers for proof of stake side-chains and for our cross-chain communication s ok paper that we did and also put a link for the current multi-asset paper that we've written I think we have two of them floating around so if you guys are curious about that you can read about it and we'll keep people informed about the like point improvement proposal process and all these other things Charlie Lee I think is reviewing some of the ideas that we have right now we sent some emails with their foundation and we'll see if they're interested in it and if they are then we'll go and actually write one and then it's up to litecoin community decide if this is of interest to them or not wrapped assets are super important we're already exploring those for stable coins because you can take pre-existing stable coins wrap them and move them from the change that they live on into our chain and then you can operate on them and remember stateful operators or businesses and their whole job is to provide lots of services to people and it would be nice to diversify their payments so that they get more than just one income stream but multiple income streams so it's very important to me over the next five or ten years that that model develop out so it becomes more and more attractive so that we get more competition and thus ultimately we can afford to have more staples and also this captive model allows us to explore certain experiments that may be a little dangerous for the main chain or potentially to data-intensive or whatever intensive for the main chain or hybrid models for example these CL clusters could be permissioned for example they could be fabric hyper let your fabric or atala or anything else and you can still move data and information and assets between these different systems if you want to hope you guys enjoyed the fire hose thank you so much for listening as always this is a lot of fun when I shoot these videos with you guys and until next time have a nice day
