First, let’s clarify what it is. Atala is an enterprise blockchain framework which aims to provide financial services to millions of people living in developing countries like Ethiopia, Georgia, Mongolia,...

If you know Hyperledger Fabric, consider Atala nearly the same. Here are a few major differences:

In contrast with Hyperledger, IOHK is currently much more focused with Atala on governments in developing countries than on fortune 500 companies. This doesn’t mean that Atala itself can’t be used by enterprises. Atala has no smart contract framework, and a blockchain is not a must. While other “similar” frameworks are mostly focused on the blockchain side of things, Atala is also focused on cryptocurrency adoption. Atala products will leverage both permissioned and permissionless systems as required for the usecase. IOHK might also provide interoperability between systems if the usecase requires it, for example to support exchange of value between blockchain platforms.

Atala is providing interoperable DLT infrastructure to enable digital societies of the future. IOHK will help governments to be more agile and effective, empower citizens, enable digital economies, drive sustainable development etc…

The three initial components of Atala are:

Ledger Framework Data Framework Agreement Framework

It is important to note that these components are by no means the main components. The key pillars behind Atala are Identity, Payments and Supplychain.

The Ledger Framework allows the creation of ledgers. It has two built-in ledgers, one for assets and another one for identities.

The Data Framework is, like the Ledger Framework, simple to understand, because it simply allows the creation of data.

But what’s interesting in regards with the Data Framework, is that, the storage was not really the problem when creating it.

The problem was that you have to create data, without users participating in the creation of it, while still allowing these users to trust it.

Here is an example to simplify this:

I’m creating a bridge with ropes, you can’t see the creation of that bridge, so you don’t know how strong it is, how robust it is, but you still have to trust it.

If I was you, I wouldn’t trust it, and that’s what makes this problem so complicated.

The key thing in regards with the data framework is that not all data needs to sit on the blockchain. You only have consensus on the parts of data that need to have that while other elements remain private. That’s how the Atala team solved this problem.

Then there is the third component, the Agreement Framework. This framework enables workflows. This last component is also linked to the two other ones.

Second, let’s look at how Atala can be used. An example is the MoU signed with Ethiopia. IOHK is working with the government of Ethiopia to create a new payment system that will allow six million users to pay their power and electric bills with cryptocurrency. This will be done by using Atala.

Another use case is in Mongolia. Atala could be used there in the cashmere industry and for university accreditation. Half of the world’s cashmere is made in Mongolia and there are around 65 universities in Mongolia, with the majority of them being based in the capital, Ulaanbaatar.

Atala could be used to massively improve the logistics in the cashmere industry, and besides, it could be used to put university graduates’ diplomas on the blockchain, so that everyone can verify if they are qualified.

Now, we only talked here about the use of Atala by governments and local authorities, but this blockchain framework can also be used by enterprises.

One example, is an MoU which IOHK has signed with a shoemaker. The goal is to produce anti-counterfeiting solutions. This will allow consumers to, for example, scan a QR-code and be able to track the “history” of that specific pair of shoes. Another way of using Atala in this case, would be to create a kind of Atala-based certificate for each pair of shoes, which would certify the authenticity of it.

Third, now we can talk about the relationship between Cardano, and Atala. Many people have seen it as a competitor to Cardano, it actually isn’t. Atala is a gateway, leading to mass adoption of the Cardano platform.

If IOHK can get even only one solution in place, let’s take the cashmere industry, this will, thanks to interoperability, provide a gateway into the cryptocurrency ecosystem for hundreds of thousands of users.

Let me explain.

Interoperability is, simply put, compatibility between two different chains. By having an interoperable blockchain, you can, in a certain way, “connect” it to other chains.

Atala can be used for processing and aggregating the data, which can then be fed through to Cardano to handle ada payments — so keeping huge volumes of data off the Cardano blockchain. — Charles Hoskinson

Now, if Atala is used by thousands and thousands of users, through for example, the cashmere industry, all these users start becoming part of the network. Once you have achieved that, it’s fairly simple to introduce them to Cardano, or any other cryptocurrency, because it’s interoperable.

You can then create a product which uses ADA for example and reach all these people, because they are already in the network.

So the more Atala is used, the more potential users Cardano will have.

To conclude, instead of bashing Atala, the Cardano community should support it, embrace it, love it, because it will eventually lead to the exponential growth of this next generation smart contract platform.

If you want to learn even more about Atala, here is the introduction of it at the IOHK Summit 2019.