This article was originally published in the Autumn 2019 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox.
Thanks to the internet, today we live in a world where information flows freely almost anywhere. However, money and, more broadly, most financial transactions, do not. The current system carries a tremendous amount of friction and wasteful transaction costs represent 6% of global GDP annually. Additionally, these services repeatedly have failed to keep our data safe and we have little or no visibility into how that data is handled. These trends have led to a massive erosion of trust.
Today’s centralised economies aren’t working the way they should. The same level of innovation and change the internet brought to communications, collaboration, media and shopping needs to happen to the world’s transactional systems. Decentralised technology creates the building blocks for next-generation applications that are secure, censorship resistant and transparent, all while being dramatically more efficient.
While blockchain has been around for nearly a decade, first-generation technology has been both very innovative, but also technically challenged. Blockchain’s potential has been limited by the blockchain trilemma, a term coined by Ethereum founder Vitalik Buterin to describe the set of seemingly intractable technical barriers that make designing systems that are simultaneously scalable, secure and decentralised incredibly difficult because of the underlying computer science challenges needing to be tackled.
Algorand is a next-generation blockchain that solves these fundamental problems from the ground up. Algorand was designed by MIT professor and Turing Award winner Silvio Micali from first principles and launched earlier this summer. The first-of-its-kind, public blockchain is ushering in the next generation of blockchain with a series of technological breakthroughs.
Like the cloud infrastructure that we have become comfortable with today, public blockchains help deliver critical tools without the need to maintain internal systems. In addition, owing to their decentralised nature, there is no central operator of these systems: they are ‘trustless’ systems that use cryptography to secure the underlying network.
Here at Algorand, we believe in a public infrastructure where transactions flow freely, everyone has control of their own data, and anyone has the opportunity to participate in modern financial services, no matter where they are. Algorand provides the scalability, decentralisation and security needed to support billions of users and businesses. The protocol is decentralised by design, and it has the ability to reach over 1,000 transactions per second with less than five-second latency.
Additionally, Algorand provides immediate transaction finality, opening exciting new possibilities and applications for businesses. With early blockchain networks, it could take up to 10 minutes for a transaction to appear in a block and another 50 minutes for the transaction to be considered final. At a rate of an hour for a transaction to be final, this wasn’t consistent with the performance speed cloud applications require today. With Algorand’s rapid confirmations, participants don’t have to wait to know that their transaction is complete.
Algorand is redefining the standard for blockchain technology and making possible a new borderless economy where the opportunity to create more efficient, transparent and engaging end-user experiences is exciting.
A number of organisations have started engaging with the Algorand platform, realising the potential of what’s made possible with its technological advancements. Securitise, a provider of solutions for creating compliant digital securities, is using blockchain to issue and manage digital securities. OTOY, the cloud graphics company, is using blockchain to create a more efficient, powerful and scalable GPU cloud rendering network. IDEX, a decentralised exchange, is harnessing the power of blockchain to provide a convenient platform for buying and selling digital assets. TOP Network, the world’s first blockchain-powered cloud communications network, offers a wide range of communications services, all powered by Algorand’s blockchain technology. And AssetBlock is democratising commercial real estate, by tokenising assets and bringing them to a global audience.
The blockchain world has moved beyond the hype of the past. Industry speculators have moved on, and now only the serious, mature, technologically advanced projects are here to stay. We’re just getting started, as we look to further blockchain innovation and grow the borderless economy.
Steve Kokinos is CEO of Algorand
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