Cardano Nearing Smart Contract Implementation with New Paper

On January 27, Cardano revealed a new paper. In that new paper, the firm details how several smart contracts will get implemented in the forthcoming Goguen update. Although this system is unique, its release date is not yet determined taking into context the many delays in Cardano’s history.

How Does EUTXO Work?

Interestingly, the Extended UTXO model was made as an enhancement on the Bitcoin pure UTXO architecture. In the case of Bitcoin, every transaction is solely base on the concept of inputs and outputs which are representations of specific amounts of BTC. Any given tramsaction takes some Bitcoin in the form of inputs and then reshapes them into a variety of outputs.

Resembling the process of changing bills into lower denominations, the total number of resulting outputs or their particular amounts is not important. That is the case as long as their total value is the same as that of the inputs. The correctness and preciseness of these transactions is guaranteed by cryptographic validators that, in the case of bitcoin, leverage the user’s private key to come up with a verifiable signature.

According to researchers, this model presents multiple limitations to programmability although it plays well with the simultaneous and distributed nature of blockchains. Thus, it is quite impractical for most of the existing smart contracts.

On the contrary, Ethereum’s account-based ledger enables and supports complex computations. However, it has to introduce a shared state which is the collective memory of all contracts and transactions. The Cardano researchers are convinced that this model is significantly difficult to secure efficiently as a result of many complicated code semantics. These complications are to blame for undesirable incidents like the DAO hack.

Mechanisms

To support more powerful smart contracts in the UTXO model, researchers have now introduced mechanisms that can effectively split the execution of a smart contract into many transactions. In the case of the Cardano model, every transaction output will also be designed with a data field. The data field may contain arbitrary information that is connected to a particular smart contract.

Additionally, this system guarantees that a particular chain of outputs implements the same contract code in a concept that is known as contract continuity. The end result is a state machine that resembles Ethereum’s where every state change is divided precisely into specific transactions.

Lengthy Development Cycles

Notably, Cardano’s development is divided into a group of ‘eras’ that are named after famous artists and philosophers. Each of these eras has its own specific focus. Currently, the Shelley era focuses majorly on staking after it launched the feature on Cardano’s testnet in December.

The upcoming era is known as Goguen. This era will focus on smart contracts. While these two eras are largely simultaneous in their functioning, Cardano’s official roadmap puts the latter’s completion in Q1 2020. Evidently, all the remaining phases are scheduled for completion by the end of 2020.

However, Cardano is not new to delays. Charles Hoskinson, IOHK CEO, said in an April 2019 interview that Shelley and Goguen would be released by the end of the year on the mainnet. There was a testing platform for Plutus, which is Cardano’s smart contract language, which uses EUTXO launched in December 2018.

This January 2020 paper is just a formalization of the model that powers and underpins Plutus. But, the release dates set for both Goguen and Shelley remain unclear. Hoskinson announced that the team is still working relentlessly on enhancing the Shelley testnet. He was speaking in a community update on January 27. A mainnet release is planned no sooner than February.

He also confirmed that IOHK is taking all the necessary measures to enhance the accuracy of all its timeline estimates.