It was an absolute pleasure to welcome Professor Lawrence Ley in the studio last week. His CV is vast - programmer, educator, meet-up organiser, published author - and I had a blast picking his brain to uncover the less obvious, yet (in my opinion) much more compelling narratives that the crypto space has to offer. We covered Cardano extensively, and this podcast is unmissable if you’re even tangentially interested in network being set-up over there. Episode embedded at the end of the piece, as is my Linktree to listen on your preferred app.
But back to this blog - I’d like to expand the scope of the conversation we had, and scale up some of the implications discussed. If the goal is (still) self-sovereignty, censorship-proof money and reshaping how we see wide-scale representation and governance, Cardano has no peers. Bold claim, I know, but here are 5 things I learned from my conversation with Professor Lawrence Ley to pitch my case.
Blockchains are not a magic solution to fix (insert problem here). A blockchain is simply a ledger of transactions, managed by many participants instead of a central authority. They’re tools used to decentralise trust through transparency. Every wallet, transaction and block are available for anyone to see, at any time. This is the very feature that ensures the integrity of the ledger and validity of transactions.
Yes, some grand problems could be fixed by building solutions on top of these trustless rails. We need better, safer online spaces. However, we aren’t nearly ready to implement these ideas at scale just yet. Most importantly, this value proposition isn’t even desirable for most businesses and entities - they don’t want a bunch of strangers sifting through their data, all of which would published on-chain.
However, when the ‘great onboarding’ does finally come, and companies are migrating en-masse to the blockchain, Cardano should have a say in the conversation. Bitcoin and Ethereum get congested and notoriously expensive during times of intense attention. Many smaller L1s never even get tested in this way. Solana is possible the largest offender of them all (no, not the ad. That was bad, but this is worse) - it goes offline. Cardano? Well, Professor Ley has something to say about its track record.
"One of Cardano's strengths is the fact that it has…never gone down, never been hacked, it's extremely resilient. Those are the properties that when you're looking for an immutable ledger that's always accessible."
"Cardano is not a democracy, it's a plutocracy, meaning that the people that have the most ADA have the most power. And that's just the way it is.”
"There are large entities, large whale holdings on Cardano, like any blockchain. And so they're going to have an outsized influence on the votes... the reality is there's not much you can do, particularly if you want to be true to the principles of blockchain, where it's permissionless.”
I don’t often start with the quote but it really does encapsulate the criticisms people have in an increasingly-fractured political climate. Politicians spend an outsized amount of their time fundraising. When speaking to a populace that isn’t all that politically-engaged, you need money to pay for air-time that you hope will get your message across. Us participants all have a single vote, but whoever can pay for their message to be heard at the right time can capture the attention in the moment.
The lobbying system in the United States is a major case in point. Your company can support a candidate’s political campaign through donations. Lobbying is so prevalent in US politics that raising any significant sum through small donations is seen as a flex. And the state of big money in politics reached all new levels with the deafening entry of Elon Musk. The richest man in the world sided with a presidential candidate, using both his influence through owning a social media platform as well as his billions to buy the mindshare needed to get over the finish line.
The ones with the money, power and influence make the rules. At least in crypto, we can see everyone’s hand.
“One of the things they did here was this thing called liquid democracy. You can delegate your voting power to a DREP but then you can actually change your delegation if you really find the person's not doing what you want them to do.”
Yeah I’m not going to make a habit of putting the quote before my 2 sats, just an exception for this particular debate. For those who haven’t heard the podcast where we explain this system, I’ll speedrun you through it.
Holding Cardano’s ADA tokens grants you voting power to help govern the future of the network. Every holder can vote on motions and decisions. There’s a process to doing this, but the real challenge is staying informed about what’s happening. This has been around for a while.
Cardano has recently entered a new governance phase, and this enables representatives to vote on your behalf. This is great for those without the time nor inclination to be involved in the political angle of this network. Any individual can put themselves forward to represent the interests of the community. These people are called DREPs, or delegated representatives. They compete for your voting power just like any local politician would. They run on a platform of ideas and goals, if you like what they stand for, delegate your ADA.
What sets this system apart is the transparency and flexibility we may not have in national politics. Most tellingly, you can REVOKE your voting power if somebody isn’t doing what you want them to do. Voting history is public and on-chain, so nobody can lie about their actions or hide evidence.
I like this idea. It adds accountability, but it’s not perfect. 2 main reflections on this set-up.
Yes it’s on chain. Yes it’s public. But so much parliamentary voting history is there for public viewing too. Thanks to various rights-to-information acts in democracies around the world, we can check this stuff. Yes it takes some time to go through the ‘proper channels’ but it’s there. We can absolutely verify whether a politician has flip-flopped on a stance that they have campaigned on. This, to me, isn’t as much a tech or transparency problem as an issue of will.
Building worthwhile things take time. Think of Eglinton LRT/subway that’s been under construction in Toronto and delayed for years. Or the Ontario Line. And for my Mumbai fam, the Andheri Flyover. The multitude of moving parts involved frequently pushes plans past expected completion dates, and that almost always leads to budget overshoots. This occurred under centralised control, with experts in place to make decisions - and we still got delays and spiralling costs. We keep building because we've already poured funds into the initiative. In practice it would appear it's better to be overdue and functional than pouring money into a pit with nothing to show for it.
Now let’s think of how it would happen in a decentralised network, managed by DREPs. What if the selected contractor was simply the best communicator, and not the best builder? What if we, as a community, were flummoxed by fancy graphics instead of a grounded knowledge of building (digital) bridges? What if we got too liquid in our decision-making, and repeatedly second-guessed our choice to go with competent contractors? Some decisions are best left to experts, some decisions take time, and some moves (especially with economies & monetary policy) exert short-term pain for long-term gain. Ensuring stability over the long-term is why there are career government positions that do not change with each administration.
We are a fickle populace with an ever-dwindling attention span. My single friends tell me what the over-abundance of choice on dating apps is doing to society - lukewarm, sporadic participation leading to overwhelming decision paralysis. We simply cannot afford for this to happen on a network that we hope will one day host trillions of dollars in censorship-proof assets.
I had Matt Black on my podcast a few weeks ago, and he comes from the Bitcoin world. He brought up some of the ideological impasses in the network. In short, getting these changes to take effect would require consensus that many believe isn’t currently possible. But, what if I told you that De-Fi on Bitcoin is indeed possible, without mobilising Bitcoin developers and political manoeuvring? What if it was possible through Cardano?
It’s not wishful thinking, seeing how this works goes down to the DNA level in how both Bitcoin and Cardano use UTXO for their transactions. Professor Ley covers the details of how this works in the podcast, but here’s a quote that I hope will pique your curiosity.
"From a user perspective, it would be a seamless experience. You would just still be on Bitcoin. Your Bitcoin would go to an address. But that address would map to the smart contract on the Cardano side. And then so the Cardano is where then the DeFi would happen."
Foundational documents like constitutions are exhaustingly challenging to codify. Yet after all that work, time passes, and society demands that these documents be changed to reflect our current reality. African Americans were not seen as people deserving of rights when the ink on the United States constitution was drying. Women couldn't vote for several decades after the constitution was established. That’s why we have amendments, so that they can be altered to best meet the needs of the people a constitution governs.
And then on the other extreme, guardrails. In extreme cases, I call it idiot-proofing. There’s a reason why Pop Tart packages have to warm customers that the contents get hot after heating. Not everything needs to be enshrined at the constitutional level, but a hierarchy of rules, regulations and best practices can surely be of assistance in weathering storms. Setting up a handbook to navigate crises involves a thorough examination of a range of circumstances. This foresight is used to formulate protocols for emergencies, rather than scrambling to fix issues on the fly.
America is not perfect. It also has a very strongly-written constitution. There’s a legal framework of checks and balances, but it’s being tested right now like never before. It bodes well for the populace that America’s political tides are tethered to the real world and lived experience - people can protest and take direct action to challenge systemic attacks/shortcomings. In niche networks like Cardano however, this knowledge and capital inequality can concentrate in ways we don’t really see elsewhere. If this power goes unchecked, well I’d rather not think about how bad things can get. Anyways, we should be taking a lot of notes while we watch the news.
"The constitution provides guardrails into making sure the community as a whole, whether it's nefarious or accidental, doesn't do things that are detrimental to the network... (and) to the principles of Cardano."
There are plenty of interesting topics from my chat with Professor Ley that are beyond the scope of this article, so I recommend you listen to the episode. For those still skeptical about the influence crypto can have on the world, I hope this piece has connected some dots and addressed doubts. If you’ve got any questions, I’ll be glad to answer them. And, of course, if any of them are beyond my own expertise, I can pass them on to Professor Ley for you. If you're interested in learning more about the technical aspects of the Cardano blockchain, there's no better resource than {Professor Ley's book, link below!
Here are Prof. Ley’s links, do follow him across socials!
LinkedIn - www.linkedin.com/in/lawrenceley
YouTube - www.youtube.com/@lawrenceley8530
GitHub - github.com/lley154/
Ultimate Cardano Smart Contracts Book - https://a.co/d/2V8fzcc
George Brown University Blockchain Development Program - https://www.georgebrown.ca/programs/blockchain-development-program-postgraduate-t475
And as promised, here’s the embedded episode, alongside my all the other app links. Enjoy, and looking forward to seeing you on the next one! Take care.
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