Exclusive Interview

Hoskinson: Cardano Can Beat Facebook in Emerging Markets

We caught up with the Cardano founder at a Tel Aviv workshop to discuss decentralisation, Shelley and Africa

On Monday, in the midst of the buttery air of the relentlessly humid city that is Tel Aviv, Finance Magnates headed over to one of Israel’s many workspaces. The occasion? A meeting with Cardano founder Charles Hoskinson.

The blockchain whizz has been on something of a world tour over the past couple of months. Alongside visits to the presidents of Mongolia and Georgia, Hoskinson has spoken at events in Tokyo and New York since the beginning of May.

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When we spoke to him, he was gearing up to address a group of developers, blockchain geeks, and cryptocurrency fanboys. He had also just come off a five day fast and was looking, perhaps paradoxically, both refreshed and tired.

Bring in the developers

“Israel is a good talent hub,” said Hoskinson as we began our interview. “There’s an amazing group of developers and scientists here. If you are doing anything in cryptography, technology or engineering, there’s probably an Israeli involved somewhere.”

The Cardano team was also in town to get some feedback on its products. A day before Hoskinson and I spoke, the company had launched a demo version of Shelley – the latest step in Cardano’s efforts to completely decentralize its blockchain system.

Running via a testnet website, the new stage in the blockchain system’s development will be given a trial-run by developers before the wider public is granted access to it. And Israelis, who are not known for their tactfulness, would be the perfect people to provide any pointers to Hoskinson and his team.

“The great part about Israel is Israelis are very good at being critical in a constructive way,” Hoskinson told me. “So it’s a great place to go and test products. These events are so important because they’re introducing the programming community for the first time ever to a completely new model of writing smart contracts that we spent three years researching.”

Getting the right people

Accustomed as I am to large-scale events, with speakers talking in vague terms about “adoption” and “decentralization,” it was interesting to be at the Cardano event. Though it was small in size – there were probably 30 or 40 people there – Hoskinson clearly believed that it’s groups of influential programmers, like those at the workspace, that are key to getting people to use Cardano’s products.

“It’s not our job to wake up and say, ‘how do we bring 10 million people or 100 million people into our system?’” the Cardano founder told me. “The first duty after you construct a platform like ours is to get the developers in and then show them what they can do with it and then ask them ‘what type of experiences would you like to create? What problems would you like to solve?’

“And by definition, we’d like those [developers] to be really bright and very competitive. We’d like them to be hungry. We’d like them to wake up every single day with a burning desire to solve big challenges and make a name for themselves because the more motivated they are, the better job they’re going to do and create a great experience. And if they do it on Cardona, they bring more people into Cardona. It’s that simple.”

“The community has been exceedingly unfair with their criticism”

Of course, the question that everyone wants an answer to is when Shelley will actually go live. And, being an annoying hack, I felt compelled to ask Hoskinson that very question.

“It’ll be this year,” he said. “But exactly when is hard to say. Delays happen. Unexpected things happen. There may be some things we can accelerate but creating software is hard. I also think the community has been exceedingly unfair with their criticism of our deadlines, our dates, and our timeframes.”

The “community” is, as almost all online communities are, replete with backstabbers, mudslingers, and trolls. As that’s the case, I asked Hoskinson if he could tell me what specific criticisms he has found to be unreasonable.

“There are people saying we’re incompetent, that we don’t know what we’re doing,” said Hoskinson. “And there’s a lot of people on Reddit and Twitter and other things who have said things that are just crazy. I mean we are number one in GitHub Commits [records of changes made to files] of all cryptocurrency projects in 2018. Number one.

“And those Commits are incredibly meaningful. They are reviewed multiple times, we have a solid checklist that you have to go through. So when you see these people [being critical], you have to say, ‘guys, these things take time. These are new protocols, there’s very sophisticated programming languages, and they have to be secure and work perfectly.’”

Heading to the Caucuses

Turning away from trolls, our discussion moved on to Cardano’s efforts at expansion in emerging markets. A bottle of Georgian brandy had been left between us, although sadly neither of us had any to drink, and Hoskinson described some of his company’s plans for the Caucuses.

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“Emerging markets are where cryptocurrencies matter,” he said. “When I look at the developed world, I don’t care. It’s highly regulated and, in many cases, a rigged system. If I decide to compete with a tech company, they can just push me out via regulation.

“Then I sit down with the prime minister of Georgia, and he says, ‘we’re open for business.’ We can rebuild parts of their education infrastructure, create a new payments system, or do a medical records system. The keys to the kingdom are right there. That’s 4 million people who in ten or twenty years will be very high-value users.”

A similar manner of thinking has gone into Cardano’s efforts to enter several countries in Africa. The company has made headway in Ethiopia, South Africa, and Uganda, with Hoskinson also receiving access to the highest levels of government in those countries.

Ethiopia has been a particular success story. Cardano is currently building a payments network for 6 million people in the country’s capital city, Addis Ababa. The company has even made headlines in social justice warrior circles by teaching a group of local women to code and work on its products.

Facebook – no competition for Cardano

But last week, led by its CEO Mark Zuckerberg, the giant data-eating behemoth that is Facebook, announced its plans to tackle emerging markets with its own cryptocurrency offering. Will that eat into Cardano’s plans? Hoskinson didn’t think so.

“I live this market,” said the Cardano founder. “And I can tell you, the US government, by definition the most powerful entity in the world, finds it difficult to make payments into Ethiopia. If they’re struggling, how is a private company going to do it?”

But if that’s the case, I asked Hoskinson, wouldn’t Cardano – which is smaller than Facebook and the US government – also find it hard to make things work in the continent?

“I am not entering a market and looking to extract value from people,” said Hoskinson. “Facebook has to come into countries it doesn’t know a lot about and convince them to enslave themselves to an economic monopoly and give nothing in return. And their only pitch is that you’ll pay less on fees.

“I’m going there and saying, ‘we’re going to rebuild all your systems, so you have fraud-free land registration, better voting systems and improved supply chains.’ We’re already doing this stuff but it took years. These are relationship-based markets – and Facebook doesn’t have those relationships.”

“We spent a year and a half in Ethiopia just training a small group of female developers. Most people assume that’s easy. No, we had to work extremely hard just to sign an MoU with the Ministry of Innovation and Technology. They didn’t really believe in us, so we had to earn [their trust]. Then after we did it, they said, ‘we like these guys’ and let us do what we do.”

“It’s not ‘don’t be evil,’ it’s ‘can’t be evil'”

Cryptocurrency and blockchain advocates enjoy hacking away at establishment bodies. Treasury departments are, understandably, often in their cross-hairs at events, in articles or interviews.

Facebook is not, however, a company and its founders’ utopian pronouncements – handing power to the people – often resemble cryptocurrency executives’ own comments online and at conferences. As that’s the case, how does a blockchain company stop itself from becoming an evil, monopolistic firm if it eventually enjoys the success that a social media giant like Facebook has?

“Because you put the integrity and the principles into the design of the system itself,” Hoskinson said. “It’s not ‘don’t be evil,’ it’s ‘can’t be evil.’ That’s always been the difference in our space versus Facebook and the rest of those guys.”

Working in Georgia, meeting the Mongolian president and teaching Ethiopian women to code is quite far removed from what most of the other CEOs in the cryptocurrency space are doing.

With that in mind, I finished off our interview by asking Hoskinson, rather cheesily, what it is that motivates him to do those things. Without trying to be unctuous, it may, given its honesty, have been my favorite answer to any interview question that I have posed as a reporter for Finance Magnates.

“What motivates me?” Hoskinson said. “Look, I’m rich, I can do whatever I want. I don’t have to work. And so I have to ask myself, how do I choose to spend my time? It’s not worth spending my time getting yelled at on the internet or being called horrible names every day by random people or seeing my competitors being shaded by Coindesk unless there’s a philosophical purpose to what I do.

“The point is, for the first time in human history we’ve had a chance to change the narrative, how the world works for everybody and change it in a way where we get rid of the kings, rid of the presidents, rid of the power structures. It’s a major step in human evolution. So either I watch it on the sidelines, going fishing and enjoying my wealth or I’m a front row participant and I have some say in it.”

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