Unlocking the Potential of Blockchain Technology: Decentralized, Secure, and Scalable
Like a lot of us have, if you spend enough time on the internet, you will hear about the revolutionary power of cryptocurrency and the blockchain technology that is behind it. But what does that actually mean and what are the real world applications of this system? This article will go into more detail about how one particular MIT Professor, Silvio Micali, has designed and applied his technology to the real world.
For a lot of people, there is a healthy amount of skepticism around cryptocurrencies and the blockchain technology that powers them. Some of the largest criticisms are that the technology is not sustainable or easily adopted by large amounts of people. However Silvio Micali believes he has the answer with his blockchain technology called Algorand.
The Republic of the Marshall Islands has decided to use a new currency based on Algorand’s technology. This country has a population of roughly 50,000 people, on more than 1,000 islands scattered over the Pacific Ocean. People who live in the Marshall Islands have difficulty dealing with high transaction fees and inflation as part of their current currency.
On this subject, the Minister in Assistance to the Marshall Islands President, David Paul said, ‘The advent of blockchain technology has opened up a world of opportunity for small nations like ours. By issuing a currency that is not physically embodied in cash, that can travel the globe instantly, and that is tamper-proof and completely secure, the Marshall Islands will finally be connected to the global financial system on its own terms.’
The Marshall Islands is a real world case study that we can see the impact of blockchain improving a society by creating a new currency. Other ways people have been utilising Algorand include carbon credit marketplaces and improving real estate transactions.
But what is blockchain?
Blockchain is a term that has hugely increased in popularity in the last ten years. It refers to a process that involves logs of information, which is stored in ‘blocks’, users are able to add to this record of information by adding more blocks, which creates a ‘chain’. Within each block are condensed versions of the block that preceded it, alongside time stamped information such as data transactions. As time goes by and the chain of blocks gets longer, older blocks get more difficult to change. This provides a safe and secure ledger that information and transactions can be referenced against.
One of the difficulties that people who have designed blockchain technologies have faced is, who and how will people be able to add the next set of transactions to the chain. In some cases, the blockchains have designated users that will validate the block that is next in the series, by solving cryptographic riddles, which uses a huge amount of computing power. The difficulty with this is that as the technology scales, the computing power needed creates a large need for energy and can be inefficient. Algorand approaches this issue by giving a random selection of owners of its coin the power to validate new blocks.
How else is Algorand being applied?
Worldwide, artists of all sorts have seen the amount of money they earn from their work diminish over the years as streaming services hold more and more power over content. This has led to a situation where copyright and royalties for artists are policed by a whole host of professionals that act as middlemen and take a large chunk of money for the artists’ work.
In Italy, where Micali is from, there are more than 100,000 artists who have access to Algorand to control their songs within copyright situations. It has empowered people to exchange services and goods, without the needs of a centralized system that takes time and money, whilst also governing the system itself.
On this situation, Micali makes the point that, ‘it shows how you can regain possession of your own information. That’s a big trend, because very often to make information available you have to give the rights of your information to someone else, who then owns your information. It’s easy to say you shouldn’t do that, but we need technology to get around it. The only way to go forward now is decentralization.’
Despite how much you might have heard about blockchain and cryptocurrency, it appears that this was just the start. Whilst we don’t know what the future will hold, there is a lot of potential for the current ways of operating to be turned on its head by blockchain technology.
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