Charles Hoskinson on "Marketing and Adoption" - 07/05/2020

Charles Hoskinson on “Marketing and Adoption” - 07/05/2020

(Written by @Eric_Czuleger)

On May 7th 2020 Charles Hoskinson sat down to give an update on the theory behind the marketing and adoption of Cardano.

Quick Summary:

  • Some supporters are interested in our marketing efforts because of price point and some want to know why our industry is important.

  • COVID-19 gives us a good example of collective action problems which resist being solved unilaterally.

  • There will be more of these problems in the future and decentralization is an ethical way of working through them.

  • Our goal is to push power and agency to the edges of society rather than siloing it at the center.

  • The developing world will be the focus of our efforts to solve problems using natural self-interest to solve problems of poverty.

Solving real problems

We would like to address what we are going to do in order to get people to use our protocol. The majority of people who care about marketing want the price point of ada to go up. The minority of people who care about marketing want to know specifically why these systems matter to the wider world.

In terms of the first group, there is very little that IOHK can do in terms of making the price of ada rise or fall. At the end of the day we are engineers and developers. Our job is to build things and solve difficult problems. However, in terms of the second group we have clearly defined answers as to why decentralized technologies are necessary.

Making our case

Some people wonder why a regular database is insufficient. Why do we need blockchains or open systems? The burden is on us as an industry to make the case that blockchains are necessary. This means that these things must be socially beneficial. These are things that add new capabilities to society. We must also make sure that this is not only a theoretical argument. Real world use cases must be in deployment.

In the end, when real world utility is achieved by these systems the price of ada will inevitably rise. This will happen as these technologies become more valuable to society. Supply and demand will raise the price. It is not the intended goal, it is a secondary side effect of solving problems with good technology. It is an economic consequence.

Decentralizing the answer

So, what can decentralization do that is fundamentally different than legacy solutions? The philosophical core of our industry is brokering trust among people who intrinsically do not trust one another. The greatest example at the moment is the COVID crisis. This is the most blatant example of a problem where the human race must trust and work with one another or people will die. In the aftermath of this there will be a great deal of clean up if we do not behave for the greater good.

Here we see major divides, experts vs. laymen, states vs. federal power, China vs. the world. The European Union is now fracturing. The global flow of trade, commerce, and travel are all in rough shape. We need to work together to establish supply chains of PPE, medicine, and research. Trust in the numbers and models need to be established. This is a perfect example of a collective problem.

Acting collectively

There will be more collective problems that arise in the future which need regulation. These include AI, biological weapons, and so forth. How are standards set? Previously, they were set by building an empire and killing those that disagreed. The standards would then be set by the victors. Otherwise a global bureaucracy could be formed, but this leads to social credit and other unintended consequences.

In the US we have the question of when we open. Governors must now wrestle with the choice of opening their state economy. But this could mean that blood is on their hands. At times like this a direct referendum could give us our answer. Most established democracies do not have this capability.

This is a circumstance where we could look to a blockchain based system. The reason that blockchain would work in this case is because of our lack of faith in governing systems and our need to establish trust for collective action. We must also build trust in how voting happens. Paper ballots and voting machines are often looked at as illegitimate by some.

Blockchains are transnational and they are immutable. The government has had an enormous amount of difficulty simply sending money to citizens. They wanted to send $1200 to every citizen. As it turns out this was significantly difficult. In one of the bills proposed there was a ‘digital dollar.’ Blockchains became an idea in the face of the crisis.

Acting collectively

So we have options in the case of trying to establish collective action. Power can be given to a central entity which then becomes an oligarchy or the native technology of our industry could be used. But in the end adoption must occur. Year on year we are seeing large corporations building federated and permissioned blockchain systems for the most part. Some are permissionless.We are also seeing supply chain systems deployed by Walmart. RFPs from many governments are requesting both permissioned and permissionless systems.

There are hundreds of pilots with real life use cases being asked for by the Fortune 1000, 500, and governmental agencies. We are excited about this, but we are also excited about applications in the agricultural industry. This is because it touches the poorest among us. Also, it is important that we don’t repeat mistakes of the past. Disruptions cause death in terms of agriculture.

The United Nations is predicting that a large quantity of people will fall into starvation due to COVID-19. This death will be caused by inefficiencies. The world produces more food than it needs. Because of how things are structured we cannot get it to people. This is why we want to get this technology into the world.

Helping farmers

One possible use case could be fertilizer subsidies to farmers. By giving basic tools to farmers alongside education we can increase their output. This moves them from sustenance farming to market farming. How do we make sure this is sustainable? The tools and techniques that we use to do this in a federated system can be used to deploy an identity system. From this we can make micro market places, collective decision making, and voting. This can be done without government participation.

This also allows us to create new financial products. Fertilizer vouchers have a high return rate on investment. We can then roll these into financial instruments and then sell them. The out of pocket for this risk mitigation would be quite low given the fact that the repayment rate is quite high. This would also allow microcredit at high returns. Greed would mean that investors would rush into developing markets, building up infrastructure. This would not be charity, it would be investment.

Globalization solutions

These are only some examples of things which can be done with the technology that we have. The writing is on the wall. This is coming. Policy makers don’t have an option. Globalization is forcing everyone to change. When Starbucks says that we will only buy fair trade sustainable farming sources, then small scale farms must have a way of proving this to large companies.

As a consequence they get less money.

Policy makers in these countries have to upgrade millions of people. Only 2 percent of farmers in Ethiopia have cell phone penetration. The poorest among us must upgrade themselves in the face of globalization, but they are the least equipped. So how do we upgrade them? This is an enormous opportunity for us as a company.

Our project is about pushing power to the edges of the world rather than siloing it at the center. We are building a new financial and social operating system within the world of the have-nots. We want to build a new system for everyone that allows others to be lifted out of poverty by way of its operation. We are looking for the 3 billion unbanked customers. We have put our money where our mouth is.

Banking Africa

Currently, we have many people working in African countries. We have trained African developers. We love doing business in Africa because we have some of the youngest and most excited populations. This is where the opportunities lie. These are places begging for new systems. We don’t have to beat our competitors on CoinMarketCap. We have to inspire people in the developing world to solve local problems.

We will do this by leading through example. We can also do it through grants and through our voting system. The lifetime value of these customers is not high at the beginning but this is akin to the early markets of the United States. The United States economy was one of the most powerful in only 50 years. When we look to the future we must plan for the things that come after us not for what is before us today.

There will be a pan-African currency like the Euro in the next 30 years. We believe that this will be the first pan-currency that is a cryptocurrency. It is possible that this will be in the Cardano ecosystem. This depends on how we lay our roots and how we do our business today. We must ask ourselves what the value of the network effect would be for billions of people on a continent. New types of stocks and insurance will arise out of this. It is the final frontier and it is the work of a lifetime.

Developing self-interest

This is not simple. There will be regression and economic collapse. All of these setbacks must be tolerated and worked with. We see this when we look to the future. Our path to adoption will not be achieved by a video or a marketing firm or a great press release. It will be achieved on the backs of millions of people working hard towards a principled, better future. As long as our principles are strong and we have a sustainable growth model, then it is inevitable. Incentives will drive people into our system, because they want to get rich.

The greatest systems ever constructed produce good for all of us by relying on our own self-interest. This is how we will achieve broadscale adoption. We will do it by living in the academy, replenishing the resources of our treasury, focusing on real world use cases in the developing world, and using these opportunities to produce great network effects.

Principles first

At the end of the day, this system has nothing to do with money. It is about making the society that we want to live in in the future. Sometimes you need to go outside of the system to make something far better. Blockchain gives us sound money, it gives us the ability to regulate our society in healthy ways, it also gives us the ability to endow liberty to everybody. This is why we believe that our success as an industry is inevitable. Bitcoin is still king, this is because of a dogged insistence on remaining true to principles.

There are tactical things that go alongside this. This includes new assets like websites and media. It is important that our supporters understand that this is underwritten by an adherence to our principles. This is why we believe that our best days are ahead of us.

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