IOHK | WHY WE ARE BUILDING CARDANO | 06/28/2017    The primary advantage is that security and execution can be extremely well understood. Proofs can be written to show correctness of templates and exhaust the execution space of problematic transaction events, such as the creation of new money out of thin air or transaction malleability . Second, one can leave in extensions to add more elements by way of soft forks if new functionality is required. That said, there will always be a need to connect CSL to overlay protocols, legacy financial systems, and special purpose servers. Thus we have developed Plutus as both a general purpose smart contract language and also a special purpose DSL for interoperability. Plutus is a typed functional language based on concepts from Haskell, which can be used to write custom transaction scripts. For CSL, it will be used for complex transactions required to add support for other layers we need to connect, such as our sidechains scheme. Sidechains With respect to sidechains, Cardano will support a new protocol developed by Kiayias, Miller and Zindros (KMZ sidechains) based upon prior results from proofs of proofs of work . The particular design is beyond the scope of this paper; however, the concept allows for the secure and non-interactive movement of funds from CSL to any Cardano Computation Layer or other blockchain supporting the protocol. KMZ sidechains are the key to encapsulating complexity. Ledgers with regulatory requirements, private operations, robust scripting languages and other special concerns are effectively black boxes to CSL, yet the CSL user will gain certain guarantees about accounting and the ability to recall funds once computation is complete. Signatures In order to securely move value from Alice to Bob, Alice needs to prove she has the right to move the funds. The most direct and reliable way of accomplishing this task is to use a public key signature scheme where funds are connected to a public key and Alice controls an associated private key. There are hundreds of possible schemes with different security parameters and assumptions. Some rely upon mathematical problems connected to elliptic curves , whereas others are connected to exotic concepts using lattices . WHY WE ARE BUILDING CARDANO  Creative Commons Attribution 4.0 International License Page 10 of 44