Algorand uses a unique architecture developed by MIT professor Silvio Micali to provide a decentralized, secure and scalable blockchain.
The Republic of the Marshall Islands is a country of about 50,000 people spread over more than 1,000 islands in remote areas of the Pacific Ocean. Countries rely heavily on cross-border finance and trade, and the complexity of their systems can make it difficult for citizens to efficiently obtain certain goods and services.
Currently, the federal government aims to be the first company to issue national digital currencies using blockchain technology. Authorities hope that this move will help citizens avoid high transaction fees, simplify compliance with international partners and protect against inflation (currencies will have a fixed supply rate).
The new currency is based on blockchain technology developed by Sylbio Mikari, a professor of Ford Engineering at the MIT Computer Science and Artificial Intelligence Laboratory (CSAIL), and commercialized by Mikari startup Argoland.
There was considerable hype about the potential of blockchain technology and its associated cryptocurrencies to disrupt the way money and other assets move around the world. Skeptics of that vision say blockchain technology is not sustainable or efficient for mass adoption.
Algorand believes it has solved these problems with a unique, scalable architecture that does not sacrifice the traditional benefits of blockchain technology such as decentralization and security.
More and more people are using Algorithm for a wide range of applications, from creating carbon credit marketplaces to facilitating real estate transactions and, in the case of the Marshall Islands, creating new fiat currencies.
“The advent of blockchain technology has opened up a world of opportunity for small countries like us,” said White House Chief of Staff David Paul of the Marshall Islands when the country announced its plans. “By issuing a currency that is not physically embodied in cash, can move around the world instantly, is tamper-proof and completely secure, the Marshall Islands will eventually connect to the global financial system on its own terms. Will be. “
Start from scratch
Mikari has long been recognized in the areas of encryption and security. He has been a MIT faculty member since 1983 and was awarded the Turing Award in 2012 with his collaborator and fellow MIT professor Shafi Goldwasser.
Mikari’s performance includes a new way for decentralized parties to agree on values or strategies (to reach a so-called Byzantine agreement) in the event that some parties are corrupted, in collaboration with others, and the parties are mutually safe. Includes how to send information to. A method that can be verified by the general public later (called a verifiable random function).
Much of Micali’s work was done long before the advent of modern cryptocurrencies and the hype around blockchain. For verifiable random functions, Micali said they knew they would be useful in some way, but couldn’t understand the application.
Still, Mikari has postponed learning about blockchain for years after creating Bitcoin, the first blockchain-linked cryptocurrency in 2008. One day he finally entered his lab and asked some of his graduate students to explain it.
“I had two main reactions,” recalls Mikari. “One was that it was a beautiful idea. Two was that it was a very non-elegant solution.”
Of particular interest to Mikari was the issue raised by another blockchain founder, Ethereum. The founder said blockchain can guarantee up to two things: decentralization, security, and scalability.
“Cryptography, more generally at MIT, the idea that something is impossible really caught my attention because it is our business to prove the impossible,” Micali said. Mr. says.
Mikari also acknowledges that the MIT ecosystem has helped launch Argoland. Of his first 10 hires, 8 were from MIT.
“It’s not just technology, it’s MIT’s entrepreneurial spirit, and it’s the fact that we don’t hesitate to take on challenges,” says Mikari. “But the most important source of information for me and Argoland is also the people who are MIT’s most important resources.”
In 2017, Mikari started from scratch to build a better blockchain.
The term blockchain refers to a record of information stored in a block that users can add to form a chain. Each block contains a shortened version of the previous block and time-stamped information such as transaction data. When a block is added, it becomes difficult to modify the previous block and provides a secure ledger for transactions and other information. Many public blockchains have cryptocurrency or digital assets associated with them, and information about cryptocurrency transactions is stored in the blockchain ledger.
“The challenge is who can add the next block of transactions to the blockchain,” says Micali. “If I have the ability to declare some common sense, I have great power. Who should have that power?”
Some blockchains choose users to add and validate the next block by spending their computing power to solve the cryptocurrency mystery. The approach has been criticized for being inefficient and energy-intensive. Other blockchains empower users who hold the power of the associated cryptocurrency to validate new blocks on behalf of everyone else. The approach has been criticized for being over-centralized, as a relatively small number of people hold most of the many cryptocurrencies.
Algorand also relies on the associated cryptocurrency to validate new blocks. The company calls the currency Argocoin. However, instead of empowering the person with the most coins to verify a new block, the owner of 1,000 tokens out of 10 billion in circulation will verify the next block. Randomly select for.
Tokens are selected in microsecond-length processes that require relatively low computational power. Random choices also make the blockchain safer by not giving hackers a clear target, and to solve the “trilemma” raised by the founders of Ethereum with a scalable and secure decentralized blockchain. Useful.
In addition to its architecture, the Algorithm community has developed additional features tailored to specific features, such as smart contracts that can self-execute based on predefined conditions in the code. In some cases, you don’t need an intermediary such as a central authority or a lawyer.
To enable smart contracts to run more efficiently on the blockchain, Algorithm has created a programming language called the Transaction Execution Approval Language (TEAL). TEAL returns a value of true or false depending on whether the specified conditions are met, simplifying the process of creating and executing contracts on the blockchain.
Contracts have since been used to enable financial transactions, build markets for small purchases of gold, and raise small investments in startups.
Unleash the potential of blockchain
The Italian Association of Writers and Editors was founded in 1882 after artists organized to avoid exploitation. There have been many changes since its inception, and conglomerate streaming services have tremendous power over content such as movies and music. The result is a complex copyright ecosystem, with publishers, lawyers, auditors, and other intermediaries reducing artist royalties.
But today, more than 100,000 artists in the organization digitally represent their copyrights and can trade or sell them at market prices published on the Argoland blockchain. Artists can grant permission to use their songs in certain cases, while retaining copyright.
“We enjoy artists, but often we don’t give them what they blame,” says Mikari.
This use case fulfills the central promise of blockchain and allows centralized authorities to exchange goods without spending money and time. It also discusses what has traditionally been a huge source of business for Algorithm, the tokenization of digital assets, also known as non-fungible tokens (NFTs).
This application is also popular with Mikari, who is delighted to see the people of her native Italy benefiting from his solution.
“It shows how you can regain ownership of your own information,” says Mikari. “This is a big trend, because in order for information to be available, you have to give someone else the right to the information, and that person owns your information. It’s easy to say no, but we need technology to avoid it. The only way to move forward now is decentralization. “
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