What it was all about was that you have Cardano assets and settlement. There we go, stroke width, all that stuff, and we'll zoom out just a little bit. There you go, assets and settlement. You have things like Cardano native assets, you have ADA, you have the extended UTXO model, you have Plutus, you have Ouroboros, and other artifacts that exist there. It's a real technological marvel when you look at what we've constructed...

...the thing is, this was built to be a tank. Uh, Ouroboros is absolutely extraordinary. Plutus is great, Extending UTXO is great. We're not going anywhere, and with Leios and other things, we're going to make it really fast. That input endorses an agenda, and there's a great roadmap here to make Cardano best in class. There's a whole bunch of great infrastructure here, but just because you...

...that'll surface from time to time where, you know, I had a different vision, or you know, wanted to go in a particular way. Um, you see Vitalic recently talking about the merits of extended UTxO and uh, plasma. Kind of sounds a bit like Hydra, doesn't it? Um, that's something that I don't really know. What are Steve's end goals or aims? Obviously, he's got an agenda and he's going to pursue it.

...the cryptocurrency industry, we recently saw Vitalik saying, "Maybe this B molded staking thing is a good idea." Yeah, we knew that. We told you six years ago that it's a good idea, and they're just now catching up. Eventually, people are going to catch up to the merits of extended UTXO when you talk about an asset and settlement layer, along with the ideas we have for side chains and where.

...improves the state of affairs there. There's been about a year's worth of work on that backbone protocol. Big improvements to Extended UTXO and Plutus, BLS support for Plutus is another thing that we've been working on. It should come in Plutus version 3. There's a lot of protocols that rely upon that, especially for cross-chain bridging. We've been doing a ton of R&D on Pluto Eris.

"Syntactic sugar" gives you new tools, new capabilities, new build-in features. You then, obviously, look at what people are trying to accomplish in the DApp ecosystem, and you gradually increase the expressiveness of the language within reason. You also strive to preserve and protect the extended UTXO model and the determinism of the system. At times, this can present a challenge because there's...

...there's always something you leave out, which a developer would like to have. If you look at the evolution of things today versus in 2021, when the Alonzo hard fork happened, it has been a day and night difference. Now, IELE is an entirely different animal. Back in the day, I wanted to combine the accounts-based model and the extended UTXO model into one system, because they both do different things.

...people really didn't relish the idea of putting both of these things in one system. They compromised a little bit and introduced pseudo account style features into the system for Stake Pools, rewards, and similar things. You'll see this in the alleged spe, but for the most part, it is an extended UTXO system. IELE and K, they were truly built as a next...

It is super fast, reliable, and very easy to configure, install, and work with. Thousands of people, who are not us, are doing that. Stack pool operators, amongst others, have a vibrant, rapidly evolving smart contract ecosystem on top of extended UTXO. You can just go, sit and watch UTXO for two hours, see every block, and observe all the stuff that's going on and how diverse it is.

...eventually vote for a budget getting funding to institutions that are going to be able to carry out a road app that's multi-year no other cryptocurrencies really has this holistic View and the other thing is we never stumbled in the things that matter. Network hasn't gone down and has to be manually reset by people, uh the extended utxo is future proofed and it's perfect...

...trivial thing it was a major accomplishment uh for cardano to do that uh with the UTXO model the Bitcoin people were trying to do this for now 14 years they're still working at it and don't let them lie to you look at Simplicity look at DJED look at the things blockstream is working on they are trying to increase the expressiveness because the Inconvenient Truth is it is...

You can see feature various things that they're focused on and what they're doing. You see at any given time. You can sculpt these protocols to maximize throughput, and I will remind everybody that throughput means something different in a UTXO system than it means in an account-based system. If that is lost on you, let's go ahead and share the screen again, and let's go...

...eutxo.org, okay. One of my favorite websites because it gets the point across again and again and again and again. This is a live view of the Cardano network from a transactional perspective, block by block. So, this block was empty and we're just going to wait a few seconds and a new block has arrived. Let's take a look at it, see what's in it. Okay, a few transactions in it, so this

In the Ethereum community: Today, there are still developers who honest to God believe that Cardano can only process one transaction per block for smart contract. They actually believe this. And, when you show them all these dapps, they say they can't exist, you can't do that in extended UTXO. They also say, "Well, here's the code. It's running live on mainnet. How are we doing this? It must be fake."

For where the entire industry is going, we have the single best paradigm for applying rollups long term. Why? Because rolling up these stateless outputs in a UTXO model is a lot easier than this global state system of accounts and all the complexity that exists there. Trying to manage that. Non-determinism is the enemy of distributed systems. We're on the deterministic side, so this has a real impact...

Advantage: liquid non-custodial staking with Ouroboros is the greatest example of that. Whereas Ethereum went down a very different road, which I personally believe is going to centralize their network and create unpleasant regulatory realities, especially in Europe. When you look at extended UTXO, it's very easy to graft on an accounts model. But at the core, with extended UTXO, you get all the...

System like that can get you don't change the underlying core of extended UTXO, and yes Hydra is another case study in this. Over time, as the years go by, it gets more sophisticated. A tail protocol is added in, provisions for high throughput are added in, and finally, when applications require that interhead communication, there are plenty of great protocols for that. It just becomes a...

Better, Mythril keeps improving. We continue to make advancements in the theory of Extended UTXO and the theory of Ouroboros. There have been various extensions documented and are currently under active development, such as finality gadgets and Genesis. Additionally, there is a promising plan for side chains, which I believe people will be very...

Now a lot of stuff had to be thought about for example turns out if you use technology like Mithril and also extended UTXO that this helps you figure out how to do this in a way that it resembles this type of system especially as you zoom out, but you get the throughput of this kind of system.

It's easier to draw it, it slows me down a little bit, and also it allows us to have no ambiguity, which is very important. Right now, we have the IO repos, and they're going to move over to the Intersect repos. At Input Output, we have this concept of tribes, and each tribe is connected to a different concept like smart contracts, for example, core technology. Smart Contracts covers things like Plutus, Marlowe, extended UTXO, core technology covers core node, network, consensus, we have tribes like identities, sidechains and so forth.

The basic idea is you establish a technical baseline showing you know how to read and actually work on the code, you establish a baseline for how everybody works together in the system, and then you establish a baseline for how Cardano works under the hood. Network protocol, extended UTXO, how Plutus works, how Ouroboros works, all the APIs etc etc. So, basically these type of things will get you up to speed as a core dev. So, if they are designed correctly, you should be in the position and demonstrate enough technical skill that you should deserve credentials.

And there's a lot more to love there extended UTXO, Sigma Protocols, they have. A pretty cool proof of work system. And it’s all in Scala, one of my favourite programming language.

Let's take a look. eutxo.org. OK, do it all from time to time, but I do so because it really does prove a point. This is a live view of the Cardano network right here. So, let's take a look kids together. So, it's loading data from the Cardano network.

So that's the model and when sidechains come in, you have completely different execution models. You can merge accounts and extend UTXO together, you have the EVM over there, but they're bulk headed. So if they fuck up the world and everything blows up, it's that thing over there. It doesn't cascade and destroy the main network. It doesn't bring the main network down. And so, they get better, faster, cheaper. And then rollups come.

So, when we look at other parts of Cardano, other parts of the system, you have UTXO HD, you have Genesis, you have the remaining work streams on peer-to-peer. So peer-to-peer is is done from the perspective of peer sharing and the actual peer-to-peer mechanics.

...and that's going to be running in parallel with the core team that does 1694. The same for UTXO HD, which is a different way of storing things so that you can utilize a persistent storage, a hard disk in addition to in memory storage. These were both critical path items for complete decentralization of the system, so they're kind of first-class citizens with CIP1690.

And so we're writing papers right now along those lines. And there's a beautiful combination of concepts from parallel chains and prior papers, the extended UTXO model and Mithril certificates and putting these things together, so watch for that throughout the summer.

So that's why a lot of the dapps and define Cardano are so novel, interesting and innovative, because they've actually had to redesign and rethink their protocols from the perspective of extended UTXO and for Plutus.

But it's still probably too quiet for everybody else, yep. Um, why don't I hop out real quick? I'm going to do an audio test. I'll join; I just want to try to resolve this. All right, fair enough. Be right back. All right, let's see what else we got going on here. Uh, what can be built, only built on extended UTXO versus account model? They're isomorphic, which means that...

...if you build one for one; you could build one for the other. There's no implicit advantage in that; you can only build on UTXO or account style. There are just different views, and one is really nice when you want to do multi-chain or off-chain, and the other one is not. Also, for parallelism and concurrency, which is where the entire industry is going, it makes a lot of sense to use extended UTXO.

Quantum Resistant Ledger, isn't that an F token? Quantum resistance is its own thing, man. It's a great topic, though. You can't even get the Daedalus wallet working correctly. Oh no, you guys are so mean. Will Midnight use the UTXO or account accounting model? Actually, it's both.

...components for input endorsers, and that extended UTXO, are on the other side. Things like recursive SNARKs, and especially stuff like pasta curves, if they can get integrated into Cardano, will have exponential returns and really leapfrog a lot of things that are happening in the industry. So, I think those are probably the most exciting pieces, beyond just the natural iterations of...

...statement discusses the historical evolution of the project. It is absolutely true that the original code base with Byron had to be rewritten, a process we called the Byron reboot. The original team that handled that task is no longer here, and that code is no longer present. However, the consequences of that rewrite set the project back by about 15 months. This delay was for implementing the extended UTXO or Ouroboros, Hydra, Mithril...

...the side chains model we've chosen, the governance model we're working on, the use of formal methods - all these different things were not wrong decisions. In fact, the industry time and again is validating that these are the right decisions, especially with the movement to layer twos and off-chain, which extended UTXO is much better for than the accounts-based model.

...who refuses to acknowledge your existence or give you the benefit of the doubt? There's no productive way to get anything out of that. Uh, you know, since we've accomplished nothing, I was like, Okay, instead of UTxO, we created Marlow. Through this, we created the Ouroboros consensus model. We created NiPoPows, which makes Bitcoin considerably better. Or, we created Mithril. We created, uh...

Kelsey would win that battle. That'd be a lot of fun. Yeah, why is the extended UTXO model better than the accounts model for blockchain? It comes down to parallelism, concurrency, and your ability to process off-chain transactions. So, when you're in the count style model, the whole system has to constantly update itself and keep track. It's almost like a global variable of what is going on...

...in the system states that, when you're in a UTXO style model, there is this notion of keeping track of the current UTXO. However, you as the user don't have to know it. You just have to know your shard of it, the things relevant to your particular wallet, and so, because of that, you start having this beautiful nature where things that happen on-chain and off-chain are isomorphic to each other.

...processors to multi-core processors, the way that you write code to take advantage of these capabilities, is fundamentally different. So, you can emulate an account style model in extended UTXO but if you do it in a very naive way, you get to that one transaction per block situation that we ran into right when Alonzo came out. Now, since that time, it's been resolved. People have figured out how to write...

...code properly, and they've really started to get a wonderful output. What's also really cool is you can do many things in one transaction. In an account, you do one thing per transaction. So with an account style model, you think in TPS. With an extended UTXO model, you think of TPT, transactions per transaction. To show you guys real quickly, this is an important distinction.

There's actually a lovely website. Let's make sure they're up. Oh yeah, they are. Okay, I'm still going to share my screen. You guys ready for this? Whoa, there we go, infinite. Alright, extendedutxo.org, I love that. Alright, and this is actually directly connected to the Cardano blockchain, huh? And, uh, it'll come online here in just a second. And so, basically, this shows real time.

Uh, so yeah, I think it's just a great model and it's built, handling a love for Hydra. It's built, hand and glove, for side chain transactions, Roll-Ups, off chain stuff, and it's very clear how you optimize the UTXO model over time. Ergo's done some great work and we continue to do great work. With every version of Plutus and update UTXO, it'll get more efficient so you can horizontally scale.

...going to create a specification for extended UTXO, and also for multi-asset accounting. That means that those are the asset issuances, our ERC20, and then there are a few other little things. The sidechain specification which will come as well is a prerequisite for Goguen, but we also want to get it out the door because the sidechain's model gives us super-efficient lilightte clients.

...recently, a paper was proposed called Vault. It's a very well-written paper and, in short, you don't have to possess the entire blockchain or UTXO to be able to use the system. You'd still be able to verify that what you're looking at is secure, as if you had the entire blockchain. There's also another proposal out of MIT called Utreexo.

Somewhat similar is the idea where they're pushing some of the work to the client, but you don't have to store or use the entire UTXO to maintain your security. We're also looking at taking our side chains paper, the proof-of-stake side chains paper, and saying, "Look, we can take the YouTube so we can take the merkel root of the YouTube." So, you put in every little leaf one of the entries.

Then it builds its way up to a Merkel root. You have that little thing, and then maybe every ten blocks or a hundred blocks, we put it in the header. Then, basically, what you would do is retrieve the most current UTXO. You would retrieve the nearest header block and get the chain back to that. Then, you would verify that the UTXO o matches the checkpoint. But then, how do you...

...you need to download only a few megabytes potentially, and then you would still be able to verify that the UTXO you received is correct. This means that you can instantly start working. You won't necessarily have your transaction history, but what it means is that I can create a light mode with Daedalus and make it the default mode. So, when you install Daedalus, you...

In short order, we will add the extended UTXO model to it, as well as the multi-asset model, the chimeric asset model that we have. This will allow us to basically have people issue their own assets in the system and support smart contracts. So, look for that in the next few weeks. Those specs will finally be publicly released, and we'll make a lot of fanfare. They technically are available but...

...implicit within the reference implementation, for example, if you're in the UTXO ecosystem, the notion that the amount going in the inputs has to match the stuff going into the outputs. If there's a mismatch, you're either creating new coins or giving mining fees. This is a notion that a ledger rule would cover; you can extract ledger rules from an implementation like...

...the ledger needs to work for Shelley, covering all the features that Shelley's going to have, like multi-asset accounting. So, when you issue assets, how can you track multiple assets at the same time? There are also extensions to UTXO models so that we can actually implement Plutus and Marlowe into the system, amongst a litany of other little features like, for example, the notion of preservation of value where...

We did it in a smaller group, internal to the wallet back-end team, with UTXO specification. But we've never done it on a company-wide scale for multiple teams including external vendors. We're really excited that we will bring everybody together. The conversations were incredibly deep, but what was really, really reassuring about them is that there were only minor changes that needed to be made...

Jared, the principal architect of these specifications, will be updating the ledgers based on the UTXO spec throughout this month and next. This update will reflect the reality that we're deviating from the normal UTXO to what's called extended UTXO. This revision is a requirement for Plutus and Marlowe to work in our system. Hence, we kind of have this beautiful team.

The Extended UTXO model has an advantage; the approach we've taken turns out to be a rather mild extension compared to delegation. Thus, it can be added quickly into Ledger post-Shelley, and it doesn't reach the same scale or complexity. Most of the scale and complexity are within the language design. Truly, it's a four-layer model consisting of Marlowe, Plutus, Haskell.

...style account model is used in this particular case, rather than the UTXO model, because of the chimeric Ledger's work. You can easily move between these two accounting models and guarantee that money is preserved; no money is lost. So that's our first instantiation. An extension of that would be user-issued assets for native assets. Over the next two months, that's what Jared is going to be working on.

You can look at a light client treating its own asset as a foreign client. In other words, it can verify that when it receives a transaction, it's actually part of the UTXO, even though it doesn't have the full blockchain. So, what we're likely going to be able to do is take these TMSs, use the stake pools to generate them and embed them in regular places within the chain.

Within the Epoch, and then take that and the entire UTXO of the system, and take the Merkle root of the UTXO. So, put that in a block header. Basically, what you'll be able to do to bootstrap is download the UTXO, check it against the hash of the header, and then verify that that's actually the correct UTXO through the TMS. Just have the Genesis block, not the full chain. That's a super fast way of...

Have a high trust threshold; it's also important to point out that this is a network-level phenomenon. So, it doesn't matter where you get served that UTXO. It doesn't matter where you could serve these artifacts; thanks to the magic of cryptography, you'll be able to verify that they're correct with a high degree of certainty. Meaning, you get basically full node security around that.

...like the concept of having a scripting language with very careful thought behind it so that its capabilities don't introduce security flaws. Then, there is the concept of UTXO counting and support. But, moving into the next dimension, you know, if we are going to have these pools of effort, let's make those pools fair and ensure that there can't be one pool that...

...as opposed to one, the nice part about the way we designed Plutus and Marlow is that, because of these things and the use of extended UTXO models, it's much easier to shard them. Moreover, it's much easier to actually understand how to load balance these types of things. So, that's less of an issue for us. But, there's a natural avenue that the entire industry is starting to move towards with ventures.

...the space is for the people's science, and all those 40 papers, you guys can take and use. In fact, I had dinner today with a Bitcoin maximalist, Bob. He thinks all these cryptocurrencies are scams, but he's a big Bitcoin guy. We were talking about a wallet he's constructing for one of his clients, and I was mentioning that he should use our UTXO spec, and also that he should use our...

Second, we're going to really double down on this whole concept of having an advanced user mode for the Cardano wallet. So, we're going to have a terminal and that terminal is going to allow you to do things like manually construct a transaction, manually do UTXO selection, run scripts that you can write kind of like a shell script within the wallet.

And because it's been built in a very particular way, it may be abstracted to a point where you can use it for any UTXO wallet, if you load a certain parameterization into It, meaning that you could conceivably, in the long arc, use this as a Bitcoin wallet system or a Litecoin wallet system. In addition to being useful for Cardano and so forth.

So basically, what would happen is it would download a small amount of data, get the UTXO and then you'd instantly be able to use Daedalus as opposed to having to wait for Daedalus to download the entire blockchain.

So, you can run a script you can, check the blockchain, make sure that your database is not corrupted. UTXO defragmenter, so if you have some fragmentation or you need to consolidate down so you don't have all these dust inputs, there are ways to do that and there's scripts you can run to do that.

And one of the things we wanted to do before we got there was first have a really deep understanding of how expressive our UTXO model was going to be. So, we needed to create Plutus and Marlowe for that, second, we need to have a really good understanding of how we wanted to handle both delegation and voting. These are the ingredients that go into address complexity.

It's just a situation where you need to have a lot of engineering and a lot of progress in place before you get there. So, we needed to create the extended UTXO model. We also needed to create a variety of of of things related to delegation and so forth to functionally get there. But it's on the way.

First off, we're going to see a terminal work its way into Daedalus, and that terminal is going to be very verbose. It's going to let you do lots of amazing things directly. Talk to the cardano wallet backend, manually construct transactions, do your UTXO all of these great things. Just beautiful thing. People going to be really happy with it. It's going to be insanely great. Best terminal we've ever done.

So, the core of the system is an implementation agnostic collection of mathematical representation, and any developer should be able to take that, read it, understand it and say ah, I understand what you're talking about when you say this is a valid transaction versus not. I can reason with this fact to understand one versus the other. From the UTXO set to the Ledger rules to how consensus will work and how the network will work - that is the soul of our protocol.

So if you look at the Rust client one of the cool things you can do with the rest client is that you can manually construct transactions, eventually can sign offline transactions, manual UTXO selection and this idea of a wallet scriptlet...

Allow you through that terminal to interact with wallet layer and giving you the ability to have an advanced user mode where you can manually construct transactions, do offline signing, do UTXO selection these types of things in addition to running your own scripts inside the system and eventually coming up with a clever way of packaging them and deploying them so we can talk about automated wallets...

We've seen a massive improvement in UTXO selection and now we have a system that will not fragment.

This includes things like multisig. This includes things like manual selection of the UTXO, manual transaction creation, offline transactions.

So, there's still a lot more to do. There's still a lot more testing to do, but the concepts like extended UTXO, how Plutus works, how to integrate Plutus, how to integrate sidechains. How to run a sidechain with the Mantis network and roll that over into production code...

And then choosing your own UTXO and some other things that exchanges have requested.

And that's that's mostly meant for the PHD's and people who care about that stuff and then the other track is going to be for developers. People who are interested in writing Plutus smart contracts and people interested in this extended UTXO model, as well as how does Pascal, Plutus, and Marlowe, How do they all fit together and what does that development experience look like.

The advantage of that is we could take the Haskell wallet backend that's built on verified formal code. Really, really good Haskell code and connect it to the rest client and then the rest client could have API compatibility or you could actually take that with some modification and potentially connect it to a Bitcoin wallet or you know, a Monero wallet or whatever that has UTXO accounting system, that's parametrizable and also it means that the lower back end can then have an independent release cycle to everything else.

Building manual transactions and offline transactions and extending that API for other parameters like delegation and so forth. We can do that without being on the normal release cycle for for Cardano. So those are going to be near term goals. That we're working towards me and meantime we have three parallel teams working full time on all of the Shelley related stuff, some on delegation, some on Ouroboros Genesis. Other dimensions of that stuff and some on the new Ledger rules You know some on how we're going to extend the UTXO set to include Plutus and Marlowe. It's a humongous amount of work.

The next versions will be on Ouroboros BFT and decoupling of components in preparation for Shelley. And then Shelley testnet next. And then after that, it's basically Shelley. Decentralization. Then very short leader after tackle on the side chains, extended UTXO and yeah, Plutus, Marlowe and then K-EVM and IELE. So lot of stuff is coming soon and long long overdo.

We built the the first formal spec for UTXO wallet.

SL to B we have this notion of taking the UTXO model and extending the UTXO model, so we can support Pluto styles from our.

And kind of the utility side of allowing smart contracts in some form in a functional form at the base layer with Monroe and Plutus and the extended UTXO model or if it really ought to be outsourced to a different Ledger that's meant specifically for safe contracts.

Bitcoin only covers a small sliver of it, and that's one of the original biggest frustrations that I had and others had with Bitcoin was It only covered a sliver of this beautiful, rich financial ecosystem. So what we decided to do is say, all right, why don't we build an accounting ledger that allows you to represent the types of assets and those types of transactions in the most efficient and parallelizable way possible? 00:20:29 So, you can get these to scale long-term performance, but then you can also do everything that Wall Street is used to doing. So, we created a domain-specific language called Marlowe. We also created a general-purpose programming language that was functional that Marlowe embeds in called Plutus, and we really rigorously thought about the UTXO accounting model. We also came up with a method to issue assets within that model that's interoperable with the Ethereum-style account.

And we're glad to see that there is still some innovation there. We still do learn from ideas that Blockstream has presented. Russell O'Connor's work on simplicity, for example, was very elegant and really helped us think through some ideas about Plutus. We would hope that the Bitcoin core developers take some of our work more seriously, in particular, work on sidechains, and in particular our work on UTXO wallet design.

Some of these can be done in parallel. Some of them require some sequential work, some is incredibly difficult research, other is just an engineering problem where we have to think carefully, like with the UTXO wallet about how we want to do it and why we're doing that and so forth. So that's what's going to happen. We're still going to be around and we're going to be asking for additional funding, but you get to decide whether. Let's see here. A lot of good and interesting questions.

Second, did he even bother to take a look at the other things that we've done, like, for example, does he know how to build a UTXO wallet? Well, he forked Bitcoin. Satoshi came up with that. Did he? Well, we didn't know how to build one. So we figured it out. And we wrote a formal specification for those things.