- Hoskinson’s foray into cryptocurrencies began in 2013 when he decided to leave his consulting job to immerse himself fully in the burgeoning field.
- After leaving Ethereum, Hoskinson continued to pursue his vision of a more robust and scalable blockchain platform. In 2015, he co-founded Input Output Hong Kong (IOHK), a research and development company focused on advancing blockchain technology.
OUR TAKE
Charles Hoskinson is a prominent figure in the cryptocurrency and blockchain industry, best known as a co-founder of Ethereum and the creator of Cardano. His journey from a mathematics enthusiast to a blockchain pioneer is marked by a blend of visionary thinking, technical expertise, and a passion for decentralised technologies.
–Jennifer Yu, BTW reporter
Charles Hoskinson’s work is characterised by a commitment to scientific research and peer-reviewed methodologies, aiming to create more scalable, secure, and decentralised systems.
Through his leadership in projects like Cardano and Input Output Hong Kong (IOHK), Hoskinson has been instrumental in advancing blockchain technology and promoting its potential to drive social and economic change.
Early life and education
Born on 5 November 1987, Charles Hoskinson’s interest in mathematics and computer science began at an early age. He attended the Metropolitan State University of Denver and the University of Colorado Boulder, where he studied mathematics.
Although he did not complete his formal education, Hoskinson’s academic background laid the foundation for his future endeavours in the blockchain space.
Entering the world of cryptocurrencies
“Because of its limited supply, which gave the currency the necessary quality of serving as a digital form of gold.”
Charles Hoskinson, creator of Cardano.
Hoskinson’s foray into cryptocurrencies began in 2013 when he decided to leave his consulting job to immerse himself fully in the burgeoning field. He founded the Bitcoin Education Project, a free online class aimed at lowering the knowledge barrier for individuals to enter the world of Bitcoin and emphasises the usefulness of bitcoin in mainstream activities.
When talking about his interest in bitcoin, Hoskinson said, “Bitcoin is a fascinating concept because it breaks the monopoly of the state on the creation and management of money.”
“Because of its limited supply, which gave the currency the necessary quality of serving as a digital form of gold,” he added. This belief in the transformative potential of cryptocurrencies would continue to shape his career.
Also read: 7 best ways to invest in blockchain technology
Co-founding Ethereum
In 2013, Hoskinson joined forces with Vitalik Buterin and several other developers to co-found Ethereum, a decentralised platform that enables developers to build smart contracts and decentralised applications (dApps). Hoskinson played a crucial role in the early development of Ethereum, contributing to its initial architecture and vision.
But just a year later, he was ousted from the team due to a controversy over whether Ether should take venture capital and become a for-profit organisation or continue to exist as a non-profit company. While Buterin and others envisioned Ethereum as a non-profit organisation, Hoskinson advocated for a for-profit model.
Hoskinson believed that Ethereum was a wild ride and an incredible learning experience. It showed him what was possible with blockchain but also highlighted the challenges we need to overcome.
The birth of Cardano
“Bitcoin as the first cryptocurrency was wildly successful, but the problem is it’s greatly limited in its capabilities: all you really can do is push around one type of instrument, bitcoin, and you can’t do cold payments, you can’t do contractual relationships, and so forth.”
Charles Hoskinson, creator of Cardano.
Undeterred by his departure from Ethereum, Hoskinson pursued his vision of a more robust and scalable blockchain platform. In 2015, he co-founded Input Output Hong Kong (IOHK), a research and development company focused on advancing blockchain technology.
Under IOHK, Hoskinson began working on Cardano, a third-generation blockchain platform designed to address the limitations of first and second-generation blockchains like Bitcoin and Ethereum.
According to an interview with Harvard International Review (HIR), Hoskinson believes that the first two generations of cryptocurrencies, while both successful, were more or less exposed to some shortcomings.
“Bitcoin as the first cryptocurrency was wildly successful, but the problem is it’s greatly limited in its capabilities: all you really can do is push around one type of instrument, bitcoin, and you can’t do cold payments, you can’t do contractual relationships, and so forth,” Hoskinson said.
“It’s kind of like the Internet when the web browser came out. You had all these static pages; you could have a pretty page with some flames on it or something and some nice beautiful text, but you couldn’t do Amazon, you couldn’t do Facebook, and all this,” he added.
For the second-generation protocol, Hoskinson sees a total of three problems.
Firstly, it is not scalable. So if you want to increase the number of users from 1,000 to 200 million, resources become more and more scarce, operating costs rise, and eventually, the whole system becomes overwhelmed and collapses.
Secondly, there are more than 8,000 cryptocurrencies, so there is an interoperability issue: in the cryptocurrency space, we don’t have WiFi moments. “Take for example your phone: no matter whether it’s a Samsung phone or an Apple phone or a Nokia phone, it can connect to a router. And as a consumer, it just works. Yet, in the cryptocurrency space, there has not been this WiFi moment with respect to interoperability,” Hoskinson said.
Blockchains are decentralised, so there’s no Microsoft to Windows or Apple to the iPhone or Google to Android. You have to figure out a way to govern these cryptocurrencies and pay for their maintenance, upgrades, and innovation so that they stay relevant and useful. But this has to be done in a decentralised way.
Charles Hoskinson, creator of Cardano.
Thirdly, there is the question of sustainability. Who pays for the development of these systems and who decides how to upgrade them?
As mentioned by Hoskinson, “Blockchains are decentralised, so there’s no Microsoft to Windows or Apple to the iPhone or Google to Android. You have to figure out a way to govern these cryptocurrencies and pay for their maintenance, upgrades, and innovation so that they stay relevant and useful. But this has to be done in a decentralised way.”
This leads us to the third generation: Cardano seeks to build a scalable, interoperable and sustainable system that also has smart contracts and decentralisation, just like the first two generations.
Cardano’s development is guided by a multi-layered architecture, with the Cardano Settlement Layer (CSL) handling the ADA cryptocurrency transactions and the Cardano Computation Layer (CCL) supporting smart contracts and dApps.
Hoskinson has emphasised the importance of this approach, saying, “We chose to do this in a very rigorous way, using the peer review process, where we went out and wrote 117 scientific papers so far.”
“You have to be much more rigorous in the way that you write code. Ultimately this code is going to be used at a scale of millions to billions of people and control a lot more of people’s lives than just their money,” he added.
Pop quiz:
Which of the following is the correct description?
a. Hoskinson left Ethereum because he wanted Ethereum to be a non-profit organisation
b. Hoskinson believes Cardano is the third-generation blockchain platform
c. Hoskinson believes bitcoin is the second stage of cryptocurrency
d. Cardano is not decentralised
The correct answer is at the bottom of the article.
Vision and philosophy in developing countries
Charles Hoskinson’s vision for Cardano extends beyond just creating a powerful blockchain platform. He envisions Cardano as a tool for social and economic change, particularly in developing countries.
Through partnerships and initiatives, Hoskinson aims to provide financial services to the unbanked and underbanked populations, leveraging blockchain technology to promote transparency, security, and inclusivity.
One notable initiative is Cardano’s partnership with the Ethiopian government to implement a blockchain-based system for tracking student and teacher performance in local schools. This project exemplifies Hoskinson’s belief in the transformative potential of blockchain technology in addressing real-world challenges.
“Blockchain is not a superfluous spend or a nice to have. It’s a foundational way of viewing the government’s relationship with its citizens, and how commercial interactions are going to happen,” Hoskinson stated. “By providing secure, transparent, and decentralised systems, we can empower people and create more equitable societies.”
Also read: Cryptocurrency hacking thefts double to $1.4 billion in first half of 2024
Governance and decentralisation
A core tenet of Hoskinson’s vision for Cardano is its emphasis on governance and decentralisation. He believes that true decentralisation requires a robust governance system that allows the community to participate in decision-making processes. To this end, Cardano has implemented a governance model called Voltaire.
The development phases of Cardano referred to as “eras,” are named after prominent figures in poetry and computer science: Lord Byron, Percy Bysshe Shelley, Joseph Goguen, Matsuo Bashō, and Voltaire.
The initial three stages established a basic blockchain, achieved decentralisation, and introduced smart contracts. The Basho era concentrates on scaling the blockchain, while the final era, Voltaire, incorporates governance, voting, and treasury management functionalities into the Cardano blockchain, which aims to create a self-sustaining ecosystem where stakeholders have a say in the development and direction of the network.
“Decentralisation is not just about technology; it is about empowering people,” Hoskinson explained. “With Voltaire, we are giving the community the tools they need to govern the system and make decisions that will shape the future of Cardano.”
Voltaire includes a treasury system funded by a portion of transaction fees, which can be used to finance proposals and improvements to the network. This model ensures that Cardano can continue to evolve and adapt over time, driven by the needs and desires of its community.
“This industry is here to stay, it’s too big, too prominent, and the youth are on the side of the industry. A very telling thing is if you look at somebody under the age of 30, they’re significantly more likely to own a cryptocurrency than a stock or a bond.”
Charles Hoskinson, creator of Cardano.
Prospects for cryptocurrency
Charles Hoskinson keeps focusing on realising the full potential of Cardano and blockchain technology. He envisions a world where decentralised systems are the norm, providing greater security, transparency, and inclusivity for all.
“This industry is here to stay, it’s too big, too prominent, and the youth are on the side of the industry. A very telling thing is if you look at somebody under the age of 30, they’re significantly more likely to own a cryptocurrency than a stock or a bond,” Hoskinson said.
“And that trend is not going to change and those people grow up, they get bigger jobs, and they have more economic influence. A lot of those people will run for office. So, the next wave of politicians, the next wave of business leaders, the next wave of people working in the US bureaucracy, are growing up with a belief and impression is positive.
The correct answer is B, Hoskinson believes Cardano is the third-generation blockchain platform.
