You could do pre processing to actually take some of that processing. That would be done with off chain infrastructure for ordering and batching, and you actually put something like that into the spos. Okay, so theres a feedback loop that now exists with the thousands of plutus pioneers and the companies that are actually building on cardano, where we can add them – and you know these two things this one and this one its about six to 12 months. So about two to four hfc events, because we average an hfc event every quarter. I think theres going to be three this year, but wed like to get and to have it about four, so theres, you know six to 12 months of taking it for a spin, and what will happen is you have all these people are just so dishonest and Just toxic who say well what charles is saying is cardano wont, be useful for 6 to 12 months now, im not going to say that at all at this juncture right here, you guys can do pretty much anything. A turing complete, smart contract can do were going to have stable coins. Materializing were going to have interoperability materializing. You can do all kinds of locking mechanisms for multisig. You can start connecting centralized off chain infrastructure. In fact, dc spark is planning on doing that. You can run complex financial contracts and were actually a pretty efficient system and all of our benchmarking shows about two orders of magnitude cheaper than ethereum right now and this month those things will be solidified and absolutely theres going to be some creative decisions that have to Be made with oracles indexes and partners have already started making some of those creative decisions, and those things will work their way into production this year and next year, and are they super efficient? Of course not? Why? Because its a new model, no one has ever done extended utxo before uh in plutos, before outside of ergo and at the scale were doing it.

No ones ever done that before the point is that you want to establish a stable route of trust thats. What weve done here and have enough programmability at the settlement layer where you can get people connected to the domains that they want to be and also move large amounts of value efficiently? You can represent and move value efficiently. Okay, thats! Why we created marlow, you see, cardano is going to be, in our view, a dominant platform for lending for insurance for bond issuance for all kinds of financial products. Now, when you talk about rich interactive experiences involving millions of concurrent users, blockchains are not built for that. Ethereum isnt built for that cardanos not built for thats, not the point of these types of systems. You need bespoke domains for those types of systems and those bespoke domains all have their trade offs and their assumptions about how they run. If youre really clever about your design and your model, then what you can do is you can use the fact that youve created a very strong root of trust to instantiate those bespoke domains with different economics and different ideas, and then suddenly you can utilize them, but Whats really nice about that is this concept of encapsulation. So not every one of these bespoke domains will be successful and lets say one of them collapses or has a problem or a flaw that doesnt cascade back to the main chain, so the billions of dollars of value thats on the main chain in the settlement layer Is never really disruptive, you say, but charles what? What about the fuel source and things like? Well, guess what you can do you can say: okay, well, the same mechanism that allows token locking the same mechanism that allows staking the same mechanism that allows voting.

You can use this to generate an alternative fuel with different economics on the side chain. Okay, so sky is the limit you can put in demirage you can put in uh. You know is that, where the tokens expire uh, you can put an infinite inflation. You can do all kinds of crazy that you want on that new chain. Well, ada will never leave the main chain, but yet it generates new fuel on the side chain. So lets say that that side chain has a tragic economic flaw and that thing collapses. Is your ada harmed? No, your aid is a okay. You see and thats the beauty and thats the magic of what weve constructed here. You, when you want to do mass acceleration of smart contracts, youre going to need off chain processing like hydra youre, going to need things like optimistic roll ups and state channels. These are just facts of life, which is why ethereum is investing so many millions of dollars into them and thinking about these things, this is not something that makes sense on the main chain. You just cant build these systems in a way where they scale at billions of transactions per second. On one system, you have to divide and conquer you have to batch. You have to pre process, you have to move things into different domains. Some things arent going to live there forever and also, if you just use common sense, what does it mean if your average transaction size is half a kilobyte lets? Do some simple math here: okay, so every two transactions you have a kilobyte okay, so lets scale it out.

Lets go to a thousand two thousand transactions. Well now were at one megabyte uh. Oh you see, whats going on here. Lets go to two million transactions. Now were at one gigabyte, so if youre processing millions of tps youre actually saying that your blocks are in the gigabyte size every second, where does that go in one month? Where does that go in one year? Where did that go in ten years? What is the weight of the blockchain if all of these things are immutable and never go away and they stay there forever? You say: oh well, no thats, not completely accurate because were were going to batch them and were going to put compressed representations like hashes or use zero knowledge proofs or were going to do off chain processing. Well, then, guess what youre in my model, youre in my model, youre here youre here with the computation layers youre here with the settlement layer, right youre here with hydra, and what we did is we thought about this very carefully? It took six years of careful thought of saying how do we pull in 35 years of knowledge from the functional programming space, because we want to do things like high assurance development? You know we want to do things like resource determinism. We want to do things like local processing, as opposed to having to know the global state of the system and introducing non determinism. These types of things we wanted to account for a rich metadata standard.

We wanted to account for native assets, and the point of the 12th is now to turn on the single most important feature, which is the on chain smart contract component. And then you have things like the plutus application back end, which is off chain infrastructure. And you have things like off chain processing. You have canonical design patterns that come in those are built over time with the community to accommodate that finite scarce resource that heartbeat that you have just like it was with ethereum and just like it shall be with us. The difference is, we have built in the keys to the holy grail, which is we have a strong route of trust, which means we can instantiate many solutions and encapsulate them, and if those new solutions fail, they dont blow back and destroy the main chain. It protects. The users in a certain respect. Furthermore, there already are people building, occams building dozens of others are building well financed projects and over the next three to six months, those developers will bring those 1.0 uh turn them on into cardano. Now we could have done all of that on the testnet had a rich, long term test net time period, but that means then were delaying stable coins were delaying interoperability were delaying connecting side chains on were delaying spending. Policies for your tokens were delaying your ability to do bonds and security, tokens and all kinds of things by waiting for those applications to build some of this canonical infrastructure.

Theres, no safety concern for doing a hard fork. Combinator event. Pollutus is a safe thing. We have a very good understanding of it and weve gotten to a point where we feel pretty good about it, so we actually can move quickly here, but what that does mean is it takes a little bit more time for canonical approaches to solidify, and then you End up having what always happens, you have abstraction where tough implementation details you no longer have to worry about. You have templates, okay, where other people solve the problem for you and you borrow those particular solutions. You have services, okay, theres tons of off chain services like infera and fire blocks, and all these other things that exist in the ethereum ecosystem. Why? Because they need to do this off chain stuff. They need to have a management layer for these types of things, especially if youre in a light, client, environment. Okay, you have standards and apis. Okay, you have all kinds of these types of things, develop design patterns and that will be built by the pollutus pioneers the plutus core team and built by the application developers in the cardano ecosystem. Now each of these start handling problems like concurrency and access control and all kinds of things like that. Already theres several people using nfts for access control to create unique identifiers for the contract and unique identifiers for uh the uh, the different parts of the uh, the different users of the system and the you know.

Nfts are ephemeral. They can be destroyed easily created easily because of the native asset standard, its a very novel way of using that for extended utxo and, of course, every step of the way. Optimization occurs, your operating cost gets reduced and the other thing is this model is super amenable to security and predictability. So at the conference i think we have four vendors that are going to be talking about formal verification of smart contracts. Okay, so for the first time in a while, people are starting to take this seriously and this model is amenable to that and you have an upgrade cycle. You see therell be probably one more hfc event before the end of the year and then thats going to be adding a lot of capabilities and functionality and emergent things that weve learned and at some point next year the ccls are going to turn on and you Have decentralized side chains that add in programmability, from the account based model and from the yellow, based model and also catalyst for bespoke computation. So, all of a sudden, you can take really complex governance and put it there by the way. You also can do a super complicated, dex uh as a side chain, and you can put in all kinds of bespoke features for that, just like we did for catalyst, its just a sensible model and if theres enough commercial demand enough commercial activity, it makes sense to Do that and you just keep living on the spiral? What makes cardano fun and unique is this: is an interactive process, its a participatory process by you, the community and its a friction free process? We know come september 12th, its going to be a pretty easy upgrade.

All things considered certainly could be an issue, but its probably going to be an easy upgrade, and we know the use of this system is not going to break or regress cardano in ways where you wake up and the system is suddenly unusable. The existence of it creates new challenges like the shipping of shelley, created the demand for proxy keys and counts, and partial delegation and theres a lot of work at the legend rule level. That has to be done to accommodate that and so thats being rolled out. But once that gets done will be best in class in that respect and similarly theres a lot of little things that have to be resolved with the launch of plutus. That will enable more and more things the problem our industry has. Is they basically say? Well, if you dont support my thing or i cant see a way to make my thing work. What you have constructed is absolutely useless forever useless and its just a toy, and then they use vanity metrics, not even understanding what theyre saying uh youre. Only at this performance level, you only do well increase the block side. Oh well, okay, they dont really understand how all these components are interconnected to each other and or operate with each other. What they really dont understand is the single hardest thing to do, and this is what bitcoin solved and its, why its worth a trillion dollars is the establishment of a root of trust.

What cardano has done is be the largest proof of stake system in the world, with a an efficient route of trust, with a beautiful model that will make it easy to roll out computation layers. This was the goal that we wrote down. I actually wrote the paper, but you know this right here. Why cardano back in 2016., i said we want to have this idea of a computation layer. We want to design in layers. This is the notion we need. We need to somehow figure this out and it was a humongous technical challenge and there were a lot of moving pieces to it and what weve done is weve basically figured that out and now its just a matter of deciding the most efficient connection protocols implementing things Like mithril and well have an update on mithril, for example, thats another one of those concurrent projects we have here that will assist in this entire process, and now because we have stable foundation, we can work in parallel. Different teams can do things. Competing teams can do things and, by the way, competing teams was one of the design principles that we have. You know a heavy use of interdisciplinary team and infosec fast iteration competing teams. These were some of the design goals that we had uh inside uh inside this uh, the uh the setup for cardano and were achieving that now because of the architecture. But you know, reddit wont, agree, telegram, wont, agree.

Twitter wont agree, guys its noise and its fud. It is one of the hardest things in the world to build a truly scalable distributed system that is decentralized and admits byzantine actors, and to make that system programmable its so hard that the bitcoin community for over 12 years has been trying to figure out how to Do that, in a way that they consider to be safe? We as a project took an enormous amount of inspiration from the successes of bitcoin and the successes of ethereum and a lot of the ideas that have come out of the third generation. And what we tried to do is put together a representative sample of the best things that we think, for example, most of the flaws that we see in d5 and historically, the ethereum smart contracts come in trying to deal with complicated financial arrangements. Thats. Why we created a dsl to make those simple and safe? You need to admit that theres a world outside of your system, so you need the ability to batch and match and process off chain. So we built that right into the system and into the language and were showing people how to do that with the plutus pioneers program and all these applications are coming up with that. We wanted to connect to the formal methods and high assurance world. So we chose a functional language as the entry point, so that thered be a significantly easier and lower cost path to do that level of verification, because theres so many hacks and flaws and other such things, concurrency comes.

Naturally, it comes either with off chain interactions, state channels. It comes with concurrent state machines and theres ways to do that they can be brought in. It comes with clever load, balancing of different utxos. You know linking them together with nfts theres, all kinds of design patterns that you can do and we spent the money to bring in different independent development firms to build things, because those firms are going to solve things a different way and they make that code available To all of you, not in six years, but this month and next month and the month after and theres a stack exchange, cardano stack exchange people can ask questions and if you still dont like the model. Well then, just take the other model that you guys like there. You go and just live in that model and all that tooling is reusable, but the difference is they run on proof of work right now and theyre super expensive and were going to run on old, bft right now, thats kind of like what binance smart chain is Doing its a lot cheaper, okay, everybody gets a cow. Everybody gets a chicken chicken in every pot thats. The way we built the damn thing: okay, and what were shipping on? The 12th is a massive massive upgrade, because you can now have full programmability. You now have spending policy. You now have interoperability, we can do stable coins, you can do marlow. These things all will come naturally, and yes, dexes will be here.

Yes, oracles will be here and theyll certainly have all kinds of cool features and functionality. There now itll. Take time for those things to mature, become more cost effective and efficient and thats just a natural evolution of the system and our users have confidence. Thatll come because they see the spiral and they understand each part of the spiral is a new update, a new upgrade. These types of things and theyve seen it happen before and whats nice is parallelism comes as you get deeper in the spiral you can now do more things at the same time, and we already see in practice the application of intensive high computation, high expense stuff being Done at bespoke domains and those domains will get connected on the cardano. None of this was possible before plutus existed, and now that it does, all of these things are possible. Okay, you dont throw out all the innovations of the last 12 years. You dont throw out the concept of a blockchain and what bitcoin has accomplished in that methodical pace. You dont throw out the all the security models that have been painstakingly figured out. You dont throw out all kinds of stuff just because some junior developer cant figure out how to do something. What you have to do is you have to teach them and you have to show them and you have to build the infrastructure. You have to build the tools you have to build the abstractions, you have to build the services.

Okay, and these are economic opportunities, especially on the services side. Uspos, you keep saying we need more money, we want to make more money.

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