Algorand : Making the trusted network a reality

Article by Yawn Rong 

 

In the beginning, it’s all about making money, quickly. And to be honest, in the beginning, I had no faith in the blockchain industry, it was just about day trading so I could sleep on the profits. 

Things started to change when ICO became the big thing. This is when I actually needed to sit down and read the whitepapers to try and understand the technology behind blockchain. I think my experience resonates with a lot of people in this industry - first you get in because there is a way to make money, but then you keep educating yourself to be on par with the blockchain industry standard. Blockchain is a fascinating subject because it touches upon so many different fields, from computer science to finance, psychology, and even social studies. 

Blockchain technology materializes trust as a new asset class that can no longer be ignored. The usual asset classes, which have historically proven to be safe, somewhat predictable and almost entirely held in mature, highly liquid economies, are no longer enough to capture the risk and uncertainty of investments in today’s global economy. Every transaction of value is directly tied to the entire global economy, but monitored only by a powerful few who set the rules based on their own beliefs and agendas. As a result, institutional trust is eroding, and investors are turning to blockchain as the only valid mechanism to exchange value.  

The greatest impact of blockchain to the world is that mankind can enter a truly decentralised marketplace that is free from geo-political intervention and friction from intermediary. 

Decentralization however, means having many different players make decisions, which affects speed and scalability in a new way. Blockchain networks are faced with the issue of forks, which happen when the chain diverges into two potential paths forward. This is the same as when founders are friends while the business is growing as a start-up, and decide to go separate ways when money is no longer an issue and they can afford to be alone.  When money is no longer an issue, people start chasing ideological goals and it’s hard for both founders to remain in sync on the ideological level. If no separation was possible, they would find a common way forward. 

This is when I got excited about Algorand’s blockchain which never forks. Simply knowing that the blockchain cannot break, forces people in the ecosystem to be more cooperative. The network will always be this one, and all the resources that have contributed to it since the beginning will remain, which only makes it stronger with time.  On the contrary, we have the BTC-BCH-BCHABC/BSV fork, with each fork, people leave, weakening the original chain.

I was also drawn by Algorand’s simplicity. Instead of relying on people and procedures, Algorand functions based on algorithms and math. The algorithms are rigid, but can never go wrong. Fundamentally, people make mistakes, and cannot be trusted; procedure have flaws and can be exploited - there are projects with coagulated designs trying to do everything but get nothing right. Algorand is on the opposite side, it is only doing a limited number of things, but it will excel all the competitors on the market - using simple but robust consensus is the only way to build trust of the network and achieve something greater.