Blockchain and the vision beyond the hype
We live in fascinating times. Approximately 7.6 billion people inhabit our small blue planet. Climate, political and technological change are putting strains on our current societal operating theories, and technological advances continue to create new opportunities for human development at an ever-increasing pace. This seemingly permanent revolution is forcing organisations to re-think how they create value, which could enable more people to participate in the global economy and unlock new revenue streams.
A good example is the recent development of centralised business models in the gig economy. This has caused friction in key areas and has highlighted the need for citizens to be better educated about data, but the clear next step is for the gig economy to become decentralised. The gig economy model could then reach its full potential as a tool for social enablement.
Pioneering gig economy companies have become stepping stones that help us re-imagine our future and how we might unlock the social benefits of the fourth industrial revolution. Emerging technologies like blockchain — a truly digital economy — makes those next steps possible.
Blockchain and distributed ledger technology
Blockchain is a collaboration-based technology, the benefits of which are best realised when a high-level of participants join a public, community-driven, decentralised network, such as the Algorand blockchain solution.
Blockchain is a form of distributed ledger that enables an immutable historical record of transactions between parties who do not have pre-established trust. This removes the need for a central organisation acting as an intermediary. The block is then stored on a network of computing nodes and each exchange of value is validated by the decentralised community and stored on a chain. All without the need for a centralised authority.
This should not be confused with distributed ledger technology, a term often used interchangeably with blockchain. Blockchains are a form of distributed ledger but have the added functionality of being able to bundle together historical records of the transactions that cannot be altered. This is an important security feature, especially when participants do not have pre-existing trust in the system. This security is key when moving an asset — especially money — between unknown parties, as you need the value to be available immediately on completion of the transaction. Allowing an immediate and secure exchange of value, anywhere in the globe, could be massively empowering to those who are currently struggling to participate in the global economy. For contrast, imagine the time taken and potential security risks involved in transferring physical cash to a location in another continent.
Distributed ledger technology in simple terms is many copies of a computing database of recorded assets. These copies are kept in sync automatically through a set of centralised agreed rules and distributed on many computers, between parties who have pre-existing trust. (Assets can be anything from currency to supply chain goods through to real estate records.) There are a number of projects working on interoperability between private distributed ledgers as they see the opportunity to develop and allow private ledgers to communicate without the need for an intermediary. As with any technology, you must assess your own organisational needs and pick a solution which is the right fit for you.
In 2018 competing universes began to emerge in the blockchain world and bad news stories around crypto-currency led organisations to be wary of blockchain solutions for business use. Having sat through many blockchain presentations and having spent time with senior executives trying to address the misconceptions of this emerging technology and its benefits, I understand the scale of the challenge these new offerings face. When I saw the Algorand presentation on their blockchain solution and was privileged to meet Turing Award winning Professor Silvio Micali of the Massachusetts Institute of Technology (MIT) I knew that I needed to find out more and become part of the Algorand community.
Algorand’s pure proof-of-stake (pure POS) protocol is one of the first blockchain offerings to help solve problems in blockchain as a solution for mass adoption. On the 16 April 2019, Silvio Micali, announced the launch of the Algorand TestNet. Professor Micali’s solution solves key blockchain problems of centralisation, security concerns and scale.
1. Decentralisation: The Algorand blockchain is entirely decentralised, which means there is no central authority or single point of control. A committee of users is randomly and secretly selected to approve every block and this committee is run by participants from different backgrounds across the globe.
2. Security: The Algorand blockchain is fault tolerant with no special group of users for an attacker to target. Committee members are selected by a secretly run, cryptographically fair, individual lottery. An attacker would not be able to single out one committee member to corrupt.
3. Scale: The Algorand blockchain is open source and available for anyone to audit, use and build upon. The platform is founded in principles of transparency, inclusivity, and collaboration and maintained by a dedicated community with a shared vision of a decentralised, borderless future.
Silvio Micali’s pure POS solves the blockchain trilemma, as up to this point blockchain solutions have to sacrifice one of the core blockchain values to enable adoption, thereby invalidating core principles.
Blockchain has so far had the greatest impact in financial services and especially trade finance. Most organisations are wary of a true open blockchain solution. Not only does it challenge current centralised business models, but many of these organisations are also highly regulated with customer and stakeholder responsibilities in security, compliance and risk. There is good reason to have both private distributed ledgers and true blockchain solutions participate in the global economy.
It is estimated that out of the 7.6 billion people living today 2.5 billion people remained unbanked. Without projects like Algorand, financial systems will remain centralised and exclusive. It is time, therefore, to look at inclusivity and finance through a new innovative blockchain lens.
A key benefit built into Algorand’s blockchain is transaction finality and its ability to avoid forking. Forking is when two blocks exist on a chain in the same position. This functionality to avoid forking is important for re-imaging our financial systems as it means a block can never “disappear”, which creates stability for all participants in the Algorand blockchain solution. An Algorand block decision is final.
World Wide Web
It is worth remembering that 2019 also marks the 30th anniversary of the World Wide Web. To mark the anniversary founder Sir Tim Berners-Lee wrote an open and heartfelt letter to mark the occasion. Before signing off he wrote:
“The web is for everyone and collectively we hold the power to change it. It won’t be easy. But if we dream a little and work a lot, we can get the web we want.”
Blockchain would not have been possible without the internet and the visionaries behind their development. It was only 10 years ago the first iPhone was launched and now the world has seen the development of mobile first economies. The speed of this current industrial revolution is like none other in history due to these technological advancements. The power of blockchain will be in empowering everyone to come on the journey.
Blockchain won’t solve all of our problems, but in conjunction with other technologies such as AI and Robotics, and in addition to the drive for greater transparency, education and ethical concerns, we can evolve blockchain in many keys areas of society, including personal identification, data management, educational referencing and supply change management.
The shift to blockchain and decentralisation means developers need to be enabled and taught to build on blockchain, which has thus far been a challenge due to the high complexity of the technology. Algorand is one of the few blockchain projects I see making developer enablement a priority. Their developer website walks you through all the steps to set up your node and start building on Algorand.
Anyone can join the Algorand TestNet and this is key to building a robust and diverse global network, tested by and open to all. The Algorand MainNet launch is planned later this year. What problems can we solve in this new and vibrant blockchain community together? The future is now and we have the tools to build something great together as one global community.