With yesterday’s significant announcement from the Centre Consortium that Algorand has become an official blockchain for USD Coin, we have reached a significant moment of opportunity for crypto-currencies. Now is the time for crypto to move into mainstream use, as global scale and security capability is now being matched with robust stablecoin technology to deliver a real-world capable payment system.
It took the Credit Card 3 decades to move from cardboard Diners Club cards, used at restaurants in New York in the 1950s, to achieve mainstream usage globally in the 1980s. Given that the first Bitcoin was mined in January 2009, the development of crypto-currencies is now entering its 3rd decade - and yet, in spite of what we might expect from a technology intertwined with Moore’s Law, we have not seen global, mainstream adoption of crypto-currencies as a simple transaction tool for buying and selling.
Within the crypto-community, the reasons for why this has happened are clear. The initial standard bearers of crypto-currencies and blockchain were built on a proof-of-work consensus mechanism that has proven itself unable to scale to the level required of a global, mainstream payment system, while maintaining robust security in a decentralized network. This has been called the “blockchain trilemma”. Transactions that take many minutes to complete, and for payments to hopefully settle, could not compete with the 2-3 sec transaction throughput of Visa or Mastercard. In addition to scalability challenges, there has been the challenge of fluctuation in the valuation of these early crypto-currencies and, more recently, significant increases in the cost of executing transactions on these networks. Those Blockchain 1.0 projects will continue to drive economic innovation, as they are used to explore areas like asset scarcity and store of value, but they cannot be the solution for delivering mainstream adoption of crypto currencies as a payment tool.
The next wave of blockchain projects, built on new consensus mechanisms, such as Proof of Stake (in all its flavours), have sought to solve the blockchain trilemma. Algorand, through its unique implementation of a Permissionless, Pure Proof of Stake consensus mechanism, has resolved the blockchain trilemma and now delivers the scale, speed and security required to meet the needs of the mainstream. While this is a groundbreaking achievement in of itself, the fact that it has been created as a public blockchain, upon which anybody can build, makes Algorand a unique innovation. It’s also been LIVE since 2019, while many other projects remain in the test or Beta stage.
The challenge now for Algorand (and other projects that aspire to enable mainstream adoption) is to meet the goal of delivering the same level of transaction throughput as Mastercard or Visa today. Algorand’s public blockchain, based on its permissionless, Pure Proof-of-Stake consensus model supports billions of users and transactions, creating the worldwide scale required to enable retailers, e-commerce sites and payment processors to accept crypto-payments, without delays or transaction congestion. Algorand is the blockchain platform for crypto-payments at scale.
With yesterday’s announcement by the Centre Consortium that Algorand is their first fully supported and endorsed blockchain for the USDC stablecoin, along with our previously announced partnership with Tether and USDT, we have reached a critical moment for the mainstream adoption of crypto-payments. For large scale, global retailers, both online and in-store, the 2 critical challenges with accepting payment via a cryptocurrency have been transaction speed and the fluctuations in value of a given cryptocurrency. By bringing both leading stablecoins on to Algorand, we have created a game-changing solution that solves this problem. Retailers and merchants can now accept cryptocurrencies payments at the speed of a credit card transaction, but with all the benefits of a truly digital currency. Algorand’s 0.001 Algo transaction fee, no matter the financial scale of the transaction, ensures that these payments can be handled in the most cost efficient way possible. That’s it …. no “buts”, no restrictions, no exceptions. Retailers and merchants who want to take an innovative leadership position, in accepting crypto-currencies, can now do so with confidence, building on Algorand and using the world's largest stablecoins.