IOHK | WHY WE ARE BUILDING CARDANO | 06/28/2017    Moving from the legacy world to distributed digital ledgers, interoperability becomes far simpler. Each ledger has a network protocol, standards of communication and security assumptions about its respective consensus algorithm. These in turn can be easily quantified. Movement of information is established by connecting to the foreign network and translating its messages. Movement of value can be done through a relay system , atomic cross chain trading or through a clever sidechains scheme . As there is not a centralized operator, one representation of entities restricts more to a metadiscussion of trust in developers, miners or some other powerbroker. For Cardano, we are integrating a new sidechain protocol developed by Kiayias, Miller and Zindros. It provides a non-interactive way of safely moving value between two chains that support the protocol. This mechanism will be the primary way value will flow between CSL and a CCL layer. For other cryptocurrencies, federated bridges should form as Cardano grows in value and user base. To help accelerate this growth, Cardano SL supports a restricted version of Plutus for interoperability scripts. New transactions will be added in the Shelley and later releases of CSL specifically to address these needs. The Maze of Daedalus The points on interoperability come from a global perspective. Specialized protocols, new transaction types, systems to assess credibility and the flow of information cannot be scoped to just a single gatekeeper or user. Rather they must be readily available to anyone without censorship or tolls. Yet what happens when Cardano does not support a protocol, transaction or application that a user cannot live without? Should we just be out of scope? The web faced a similar concern during the 1990s. Ironically, the web provides two different solutions that can be replicated with cryptocurrencies. The introduction of JavaScript provided programmability to any website to add arbitrary features. The introduction of browser plugins and extensions added custom capabilities for users willing to install them. Both approaches gave us the modern web alongside all its security horrors. WHY WE ARE BUILDING CARDANO  Creative Commons Attribution 4.0 International License Page 33 of 44