Metadata in Cardano transactions

Cardano is to be a social and financial operating system. As such, it must be more than a transaction network on blockchain. It must be easy to extend the basic concept and add new functionalities. Transaction metadata will allow it.

Every transaction has a context

First-generation blockchains are able to store transactions. Every transaction basically says how many coins were transferred from address A to address B and when was it. There is no context that would say something more about transactions. Nobody knows who owns addresses, the reason why transactions were sent, and whether everything was fine regarding the interaction of counterparties. Only participants of a transaction know the context.

You probably would not expect more from a transaction network. PayPal does basically the same job. It just transfers money from bank account address to bank account address and does not care about the context. The difference is that third parties know participants but the principle is similar.

People are able to consume traditional financial services of third parties under the condition that they trust them. If they want to buy stuff on Amazon they just send money and they will receive ordered gadgets. If they want insurance they just send money to an insurance company and they will be insured. If they wish to…