In this Cardano update, we’re going to look at some really important questions about what Cardano is doing to build out the use cases for the Cardano blockchain. I have an AMA from Charles Hoskinson that I’m going to go through. We also have some interviews about what he’s doing in Mongolia and countries across Africa trying to actually gain users and build out actual business use cases on top of this infrastructure. I’m going to very quickly look at the price of Cardano as well. Right here:
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The one major question for all blockchains that aren’t bitcoin is how they’re going to be regulated. We’ve seen that bitcoin has been said by the SEC that’s a commodity. But for everything else, they’ve left the door open and just heard this question: what are your thoughts on Saylor claiming Cardano as a security measure?
Is Cardano a security?
‘Mike Saylor is the Tone Vase of this cycle of, you know, him and Jimmy’s song of this cycle of crypto trading, so back in the day we had Tone and Tone was this podcast. He’s still around and I like Tone, but he had this thing like, “Everything’s a scam, it’s a scam.” It’s a scam. Oh, it’s a scam. Oh my God, you just scared me. Everybody’s scamming.” You even had this thing called the scammies. It was his awards ceremony. The scammies. So we now have Mike’s salary in bitcoin. Again, it doesn’t do anything for real. I can’t build a decentralized power grid. I can’t build a centralized telecommunications company. I can’t build a centralized computer. I have no identity solution. It’s not programmable, so I don’t have dAaps and DeFi. I can’t even issue an asset, so I have no NFTs. It’s all outside of that, but don’t worry, Layer 2 protocols that are highly centralized will somehow solve all of this.
Everything else is a scam, and nobody has any control over it. It’s completely decentralized, far more than bitcoin, and has more utility. People buy the token not to speculate, which is the only thing they can do with bitcoin. They buy the token to use it for stuff like, I don’t know, medical records and whatever the hell else they’re doing because it is a real life utility, but that’s a security, but the thing that you only think you can do is speculate on is not. I think Mike’s head is all messed up.’ – Charles Hoskinson.
I personally don’t think that Layer 1 chains are secure. When you look at them, if a security is to be regulated, it must have a c-suite, just like a CEO. That’s just not going to happen for a decentralized company. A digital commodity asset that’s used to pay fees on a decentralized blockchain, so I don’t think they’re going to be regulated as securities. There may actually be a new type of regulation that gets put up for those Layer 1 chains.
When you are coming down to applications, I believe these could well be seen in security like Uniswap. That is an exchange. That is security. Is the token a real security or not? I just don’t see it either way. If you do call it a security, there is no CEO of Cadano. There is none. So even if you regulate it, what’s going to happen? You can’t sue Cadano. It is a decentralized protocol, so that’s how I see it.
Cardano in Mongolia
We can read to what Charles has to say about what they’re doing right now in Mongolia:
‘Charles, can you discuss the relationship between IOG/Cardano and Mongolia and what are some of the ongoing projects and how is adoption in Mongolia going?
As I mentioned earlier in the AMA, 140 000 uncles are using Cardano in some way, which is an impressive level of growth and adoption. It would be nice to have a digital identity and a supply chain system because, if you look at the needs of Mongolia in the agricultural sector, there are 5 animal types that are primarily important. So the goats are the most important part of Mongolia’s agriculture because that’s where the cashmere comes from and the Gobi group is a gargantuan company and they export most of that.
When you look at the supply chains, there’s something called the third neighbor policy, and there’s this attempt to be able to try to export a lot of agricultural goods to the United States and other places without tariffs. The problem is that they have to adhere to certain quality standards or else. The USDA is just not going to let that happen. So how do you prove that there needs to be a blockchain-based system that enables people to basically make statements about the life cycle of animals? What they’ve gone through.
We talked to Obuna, the minister of digital transformation, and a few others in the government, and you know, at some point, I think we’re ready to go. We were scaling up to do something, then came hit, and if I have to send a lot of people, it just doesn’t work. So I said, all right, well you know, Mongolia is not going anywhere. Let’s calm down a little bit and, you know, we’ll circle back to it. Hopefully, in 2023, we’ll be able to do something pretty cool.’
So 140 000 people are already using Cardano as an infrastructure to build NFTs, possibly supply chains and digital identities, and keep track of, you know, records of livestock. So, business use cases for Cardano.
Is IOG healthy?
‘Hi Charles, how is IOHK prepared for a potential recession?
We have a strong economic moat and our business lines are strong. The nice part about government tech is that you have long-arc relationships like the Ethiopia relationships, multi-year relationships, so we have plenty of things we do and, uh, those things are stable. We’re doing okay. Obviously, a recession forever would not be good for anybody, but we’re doing okay. We’re not doing any mass layoffs or anything like that. We’re continuing to hire.’
IOG, that’s the company that leverages the Cardano infrastructure to essentially sell these services to developing nations, is doing quite well, but these are huge infrastructure projects that take years to play out. If you’re investing in Cardano, you kind of have to keep that in mind. Yes, Cardano is an open blockchain. Anyone can develop on it, but IOG specifically, which is still the main company to actually reflect on the value being built on Cardano, is going out in these developing markets where these infrastructure projects take years to play out. It can be frustratingly slow at times for sure. Cardano is an investment and you can choose whether you hold some as a diversification away from other use cases on other chains.
I think it’s really important to put a portfolio together to try and diversify the potential use cases over the long term.
Charles has to say about some really important questions about what they’re doing in these developing countries, because this is not easy work. It’s really clear to me that Cardano builds infrastructure for people and potentially just tries to build things that benefit people, no matter if they’re allowed or not.
‘Since striking the deal with Ethiopia, the reputation of the country’s Nobel peace prize and winning prime minister has sort of nose-dived, you know, with some people calling his efforts to combat rebels a genocide. Technology in and of itself is neither good nor bad, and we are all excited about the potential of blockchain as a force for good. A state agency in India recently announced it was using blockchain to document an individual’s cast, which is cringy to say the least, but someone accused of genocide could use it for much worse.
So you work with Saudi Arabia or not do you work with china or not these types of things so you look at things on a case-by-case facts and circumstances basis. So in the case of this Ethiopia deal, the relationship is with the ministry of education. Let’s really understand what’s going on. The government already has the academic records. They’re there. The problem is not who has them. The problems are accessibility, portability, and verification.
So if you take young kids, you put them into a system where the thing the government already knows is now in their possession. What you’ve actually done is you’ve actually transferred the burden of showing things from the government to the student. So even if the whole country falls apart and shuts down, a young student who just graduated could go to Oxford and say, “Here are my transcripts,” and Oxford can independently verify that without the ministry. You bring up a very interesting question of what happens when technology like that goes beyond a simple use case and goes into national identity, and there you have to say, “What are the ethics of it?” You know, what are the checks and balances and controls? “
What I like about self-sovereign identity is that it really, that doesn’t say well identity is commanded and controlled by the government, rather the individual creates their own credential. That’s the concept of self-sovereign identity, and then the individual has a choice of what they choose to share with whom they choose to share it. I think it’s the only way you can actually combat totalitarianism. You don’t try to say evil means government, you go be better and then we’ll do business with you because the people running the show are comfortable in power. You have to give the people a tool to resist what’s happening in that circumstance.’
Of course, we have the Vasil hard fork coming up in August, which is going to enable a lot of lending applications and other types of apps to actually launch as well and kind of fulfill what their goals are with a lot of these projects.
[This article is a transcription of a video made by MoneyZG]
[Original video: https://youtu.be/ZuZpfDrGybQ]