Crypto Pioneer Silvio Micali Explains Where Crypto is Going

0

About 40 years ago, Silvio Micali and his colleague Shafi Goldwasser wanted to find out how to play poker together on their phones. They needed a way to ensure that neither could know the other player’s hands.

The two graduate computer science students at the University of California at Berkeley devised what Micali calls “the first secure encryption system the world has ever seen.” For their invention, which proved vital to the modern Internet, they were awarded the AM Turing Prize, considered the computing equivalent of the Nobel Prize.

Today, Micali, 67, focuses on another application of encryption: blockchain, which is the basis of bitcoin and other cryptocurrencies. At the Milken Institute Global Conference last week, the MIT professor promoted Algorand, a blockchain he developed that he says is greener, faster and more secure than others. protocols.

Blockchains are generally described as public ledgers where transactions are recorded on an open network. Validating a set of transactions to add to the ledger is one of the biggest security challenges. Algorand says it uses a new approach involving the random selection of its users to ensure transaction blocks are more resistant to hacks, which has cost cryptocurrency holders a record $14 billion in the past year. last year by a count.

Algorand is part of a swarm of new blockchains that aim to transform finance and the modern world by serving as platforms for so-called decentralized smart contacts that can be conducted from person to person and across borders without government intermediaries.

An announcement at the Milken conference that Algorand will be partnering with world football’s governing body FIFA sent prices for its algo coin skyrocketing, making it the 30th-largest cryptocurrency on Coinbase on Tuesday, with a market cap of $4.5 billion. (Bitcoin’s market capitalization is $725 billion.)

A: It is used to secure many things that travel over the Internet. When you send a message to Citicorp, one of the handy side products of our work is that your browser knows it’s really talking to Citicorp and not some middleman who intercepts messages and impersonates Citicorp.

A: I bought into the main idea. The idea is nice, but somehow the solution isn’t exactly elegant. We all aspire to beauty and elegance in what we do.

A: Bitcoin consumes as much electricity as a small country, and we are going to consume as much electricity as about 10 homes. [Algorand uses a so-called pure proof-of-stake method for validating blocks of transactions, vs. bitcoin’s far more energy-intensive proof-of-work system.]

A: We are in a very divided world. We have blockchain 1.0, 2.0, 3.0, 4.0 – what I believe Algorand is – co-existing at the same time. So it’s very unique. If you look at the industrial revolution…you got more and more sophisticated [technologies], so usually all of these things don’t co-exist. We are at a unique moment where there are extremely sophisticated blockchains like ours and where there are very first generation blockchains that continue to be there simultaneously. It is as if Neanderthal man and Homo sapiens lived side by side.

A: As blockchain begins to be used for transactions, the few blockchains that are truly capable of transacting at very low cost, they will emerge, in my view. When traditional finance starts to get on the blockchain, you’re going to see blockchains that are really used in a massive, transactional way will accelerate. And some stores of value [like bitcoin] may remain.

A: First of all, we can’t stop people from speculating. But what we want to offer is technology that allows people to use our platform for a variety of transactions and also very sophisticated transactions.

A: So if you look at stocks, on the right, stocks have a settlement time of “T” plus 2. “T” is when you buy a stock and 2 is the number of days after which that trade will end. ruler. That’s two days of waiting for a trade to settle. We settle our [blockchain] transactions in 4.4 seconds today, at the end of the second quarter in 4 seconds and at the end of the third quarter in 2.5 seconds. It’s a huge difference.

A: I really believe in investing in what you understand. But no one can say that you have to understand the technology any more than you have to understand how an airplane flight works to get on an airplane. But you need to ask some very basic questions.

A: To invest in cryptocurrency, the most fundamental tool is consensus [verification of the blockchain]. One question I would ask if you’re interested in joining a blockchain is, “Can I join this blockchain’s consensus process?” It’s a very fair question. And if the answer is, “Sure, buy some supercomputers and join us.” And you say, “I don’t have a bunch of supercomputers and I don’t have the money to buy them.” So I would say be careful.

A: If the answer is, “You could, but we already have a club. Sorry, you’re not in the club.” So I have to say you need to be worried.

A: If the answer is not only are you allowed to join, but you have the technical means to join because a laptop is sufficient or something very basic, then I have to say that means the blockchain is truly decentralized. And I believe that decentralization is really the ultimate source of security.

A: [Big laugh.] No, but I can’t prove it.

Share.

About Author

Comments are closed.