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Creator of Cardano reveals details about chip that will allow use of crypto as cash

  • Cardano’s creator, Charles Hoskinson, reveals new details of the development and use cases for the chip built by IOHK with the University of Wyoming.
  • Chip can be used to give 98% of African farmers access to financial services through a system of hierarchy. 

In a recent interview, Cardano’s creator and IOHK CEO Charles Hoskinson revealed new details about the project with the University of Wyoming. Born after IOHK donated $500,000 in ADA to the institution, the project consists of the development of a chip that would allow the expansion of the ADA token and Cardano blockchain cases in multiple sectors.

As reported by the Crypto News Flash, IOHK and the University of Wyoming are developing a specific purpose chip. The hardware, according to Hoskinson, will be a Secure Hardware Module capable of performing cryptographic operations. The secure circuits on the chip will be tamper-proof and isolated from the rest of the system, so they will be suitable for storing and using private keys. In addition, they will have antennas to allow communication with radio frequency identification (RFID) and Near Field Communication (NFC).

Cash and offline transactions with Cardano

Previously, Charles Hoskinson explained how the chip could be used to prevent counterfeiting and for product authentication in the supply chain. In the interview, Hoskinson talked about another possible use case for the chip. Envisioned as a long project that will take years to complete, Hoskinson said the chip could be used to fulfill one of Bitcoin’s purposes, to be cash:

You know, the whole point of Bitcoin was to go from cash to something that’s like cash online. But what if you want to go in the opposite direction? What if you wanted to go from a native cryptocurrency to something that has a cache like user experience? It’s very difficult to do without a hardware component.

In that sense, the chip will be useful in regions like Africa. There, 98% of farmers don’t have a smartphone, connection or internet or a way to use cryptocurrencies. Cardano’s creator further outlines:

So when you look at that, you say, well, OK, 98 percent are mostly offline and not banked or digital. So if I was building a money system for them, it would probably be a bad idea to say, ‘oh, you have to use an always online, purely digital currency.’ You need some other thing. And so how do I replicate the cash money experience but still have a blockchain backend? Well, what you do is you create a hierarchy where those two percent basically become like micro banks and then they can manage the issuance of these tokens to people and then their local phones or infrastructure can verify.

As mentioned, the chip can store private keys and the system proposed by Hoskinson will allow them to be transferred from one chip to another. Furthermore, with the proof of erasure it can be guaranteed that the keys only exist on one chip. That way, the use of the internet is not necessary for transfers:

So if you can do that, you can basically just tap phones locally with no Internet connection to each other and move value. Like you would a twenty dollar bill from one actor to another actor, and you’ve replicated the cash experience. Now, what’s nice about the solution is it’s infinitely scalable because these transactions actually don’t occur on the blockchain. So from the blockchain perspective, nothing has happened.

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Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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