I keep reflecting on the 2020 MIT Bitcoin Expo that I attended earlier this year, and cherish each and every moment I spent wandering the halls of the decadent MIT. It made me feel like I was Charlie in the Chocolate Factory and that golden ticket got me into the Blockchain/Crypto community. One of the people I met worked for a company here in Boston called Algorand. I had no idea what Algorand was or what they did until I spoke with Shamir Ozery at the expo. He enlightened me from a 50,000 ft level of the overarching mission of Algorand and what they do, but after I sat down with him I had more questions and wanted to dive deeper, so here we go.
Algorand is a blockchain tech company based right here in the beautiful city of Boston. They built and developed the world’s first open, permissionless, proof-of-stake blockchain protocol that provides security, scalability, and decentralization needed for the world’s economy. Their goal of all this is to enable traditional finance and decentralized financial businesses to embrace the world of frictionless finance. That all sounds really sweet, but what does that really mean? Let’s break it down. Open and permissionless refers to Alogrand’s platform/software being open for all entities to use without permission from a third party or operator. Proof-of-stake is a type of algorithm where a blockchain network achieves distributed consensus. This means that there is not just one entity on the blockchain verifying all the data. The creator of the next block or the entities involved with verifying the data are chosen through a different number of combinations of random selection and wealth or age. (hence, staking) Staking is the act of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. One receives a reward for staking their tokens.
The Proof-of-Stake consensus algorithm was created to better optimize the amounts of energy required to maintain the blockchain by miners. Proof-of-Work, which is the original consensus algorithm of blockchain, does not give miners the power to mine based on the percentage of coins held by that particular miner. With P-o-S, Miners are given more blocks to verify the blockchain-based on how much and how long they have been holding that particular cryptocurrency. Make sense?
Now that you have a better understanding of what all that means let’s dive into some of the use cases and how Alogrand has made its impact on the Decentralized Finance market. Alogrand believes that asset tokenization will solve many of the biggest challenges in today’s global, digital, and financial markets. These problems include the ability to access global markets, 24×7 transferability, instantaneous settlement, and efficiency of compliance and reporting amongst many. Use cases of tokenization can range from anything like in-game points, loyalty points, system credits, real estate, identity certifications, collectibles, securities, government-issued fiat currency, and regulatory certifications. Algorand has three facets of its platform that they deploy to accomplish these goals: Algorand Standard Assets, Atomic Transfers, and Alogrand Smart Contracts. What you need to know is that these big three pieces provide the foundation for decentralized financial applications for improved performance and security. The applications and industries that Alogrand can impact are limitless.
That will segway us into the current world that we live in. The COVID-19 world… It is a scary, crazy, and an unconventional time. With unconventional times, comes unconventional ideas/things. Part of what Alogrand has been working on is deploying their technologies to help with tracing of potential contact with people that test positive for COVID-19. Algorand recently published a document that laid out their plan for how to tackle this issue and how to deploy and govern a new decentralized system for contact tracing. This is where blockchain and unconventional ideas form a bond to kick off a revolution.
Right now, other companies such as Google/Apple and governments like Italy have all started to get the ball rolling to develop safe, secure, and efficient ways of tracing people that have potentially been infected with the COVID-19 virus. The basics of the idea are to use the Bluetooth technology on your phone and have this interact with other Bluetooth devices in your surrounding area to trace and track data. At the end of every day, that data is sent to a blockchain and stored for analysis. If you test positive at any point you can submit this through an app and behind the scenes this information is relayed to the blockchain and reported to other devices that have been known to be in close contact with you in the past 14 days. In theory, this is great, but next to come is how to lay moral and ethical bricks down for a fundamentally sound system that works for everyone including the government.
Here is where things start to become hairy because each entity has its own vision on how to build this structure, how the data is shared, who can see the data, and who will be governing the blockchain. Apple-Google’s ideology is to make the technology very citizen-centric where the information would stay with the end-user and they would be able to share it if they want to. Data cannot be accessed by certain parties (ie. government bodies) and is securely stored. On the other hand, we have the Italian government who has the view that there should be one national view on the rules of how things should be set up and essentially shove this in the face of its citizens. The government has control of all data sent from your phone and can analyze this and do whatever they want with it. I don’t think anyone enjoys being told what to do, but we as humans do love rules. You can see there is quite a dilemma here on how to approach the final view or paradigm that the world should adopt in conquering the tracing of COVID-19. Not only are there technical hurdles to overcome, but there are also clashes surrounding a universal standardized paradigm about how to create the tracing system and who is to oversee this.
This is where Alogrand takes aspects of both the Apple-Google and the Italian government paradigms and creates synergy with their plan. Algorand is in concurrence with the Italian government that there should be a national view (meaning uniformity within borders about tracing and data storage), but adds how to manage and oversee the tracing of COVID-19 needs to be common throughout the world. They call it the “Common National View”. The Common National View is a hybrid of both paradigms and I will go into more detail.
Algorand agrees that governments need to analyze and have access to the close contact data from the tracing technology because governments will benefit from learning correctly and efficiently the current level of social interaction to better deploy policies. The disbursement of the data and the identity of the data origination will be stored on a decentralized blockchain overseen by a trusted operator to all parties involved. Essentially Algorand would like to see the world all come together with a uniform idea that has been molded and shaped democratically. The people will feel they were included in the creation of the rules for the system which also unites everyone behind the same idea and gives the people a sense of ownership. This buy-in to the process will then lead to a more standardized way of approaching the tracing methodology in the global environment that we find ourselves in. Algorand feels it will be important that we the people work with the governments when creating and shaping the foundations of the technology so that privacy is maintained, yet information can still be used in the best way possible. An Augmented Google-Apple Bluetooth solution with permissionless blockchain is the best way that Algorand describes it.
Overall, I believe Algorands’ heart is in the right place, and their thesis about the deployment of the technology is ethical and secure for everyone. They propose a fair and democratic approach to the problem while allowing all involved to have access to the information they need. Alogrand has very eloquently created a beautiful paradigm that harmonizes exactly what their ethos embodies: security, scalability, and decentralization. Now what they really need is the buy-in of everyone to voluntarily come together behind the same solution and combat the problem. That is where you come in.
We the people of the world have to unite behind the same idea and voluntarily play ball on the same team. One vision, one idea, and one goal. In times like this division and conflict will not get humanity to the finish line. We need synergy between people, nations, companies, and minds. The paradigm that Alogrand envisions is not far fetched, its fare, it’s secure, and it could be what saves us all. Think about if Alogrand is successfully able to win the hearts of the world and get everyone behind the same thought, idea, and philosophy about tracing COVID-19. That is the ultimate and absolute truth, and the power of that idea is heavy on my fingers typing this right now. To be able to unite humanity to combat a virus that could wipe out generations of people is an overwhelming task, but nothing is impossible. I believe in Algorand even more now after reading their playbook for COVID-19 tracing and I believe in their versatility as a company to have a major global impact is even more apparent now. Stay safe out there.