IOHK | WHY WE ARE BUILDING CARDANO | 06/28/2017    ● A long-term view on improving the design of cryptocurrencies so they can work on mobile devices with a reasonable and secure user experience ● Bringing stakeholders closer to the operations and maintenance of their cryptocurrency ● Acknowledging the need to account for multiple assets in the same ledger ● Abstracting transactions to include optional metadata in order to better conform to the needs of legacy systems ● Learning from the nearly 1,000 altcoins by embracing features that make sense ● Adopt a standards-driven process inspired by the Internet Engineering Task Force using a dedicated foundation to lock down the final protocol design ● Explore the social elements of commerce ● Find a healthy middle ground for regulators to interact with commerce without compromising some core principles inherited from Bitcoin From this unstructured set of ideas, the principals working on Cardano began both to explore cryptocurrency literature and to build a toolset of abstractions. The output of this research is IOHK’s extensive library of papers , numerous survey results such as this recent scripting language overview as well as an Ontology of Smart Contracts , and the Scorex project . Lessons yielded an appreciation for the cryptocurrency industry’s unusual and at times counterproductive growth. First, unlike successful protocols such as TCP/IP, there is little layering in the design of cryptocurrencies. There has been a desire to preserve a single notion of consensus around facts and events recorded in a single ledger, regardless of whether it makes sense. For example, Ethereum has encumbered enormous complexity attempting to become a universal world computer, but suffers from trivial concerns potentially destroying the system’s ability to operate as a store of value. Should everyone’s program be a first class citizen regardless of its economic value, cost to maintain, or regulatory consequences? Second, there is little appreciation for prior results in mainstream cryptographic research. For example, Bitshares’ delegated Proof of Stake could have easily and reliably generated random numbers using coin tossing with guaranteed output delivery, which is a technique known since the 1980s (see the seminal paper by Rabin and Ben-Or ). Third, most altcoins (with a few notable exceptions such as Tezos ) have not made any accommodation for future updates. The ability to successfully push a soft or hard fork is pivotal to the long-term success of any cryptocurrency. As a corollary, enterprise users cannot commit millions of dollars worth of resources to protocols where the roadmap and actors behind them are ephemeral, petty or radicalized. There WHY WE ARE BUILDING CARDANO  Creative Commons Attribution 4.0 International License Page 3 of 44