W. Sean Ford on Algorand’s proof-of-stake protocol and scalability

0:01i'm ashlyn Addison from event chain for investmentpitch media and FinTech news network and today on blockchain interviews we have W Sean Ford the CEO of Algar and Sean thank you so much for being on the show it's a pleasure to see you thanks Ashton thanks for inviting me you're very welcome I'm very excited to hear a little bit about Algar and today

0:22if maybe you can kick it off by explaining how you would explain Algar and aza blockchain sure I think that the first thing that we'd like to start with is why does blockchain matte or overall from our perspective and for us there's a few things that we saw in the market one that there's you know an erosion of trust that has really sort of existed fairly systematically especially among

0:49among Millennials where 92% of people don't trust their current financial institution we see a world where you know value does not flow freely but you know information largely does we see that there's over 2.2 billion people in the world who remain unbanked and don't have access to modern financial instruments and we also see over 6 percent of global GDP is really tied up

1:17in transaction cost which is trillions of dollars so in that world I think you know blockchain has a real chance to be disruptive and to help sort of write and stabilize that environment where everyone is open and able to participate in those opportunities so Algar an in particular something that was was founded originally by Sylvia McCauley who's a Turing Award winner out of MIT

1:43and what he really saw was a number of the current implementations of blockchain didn't provide a number of the things that were required to make them more relevant for broad adoption and mainstream business use and that's really scalability decentralization and security and we think at alga ran we've solved those three things which really sets us apart and makes us more ready to

2:08be adopted by both the end-users developers and businesses that's great Shawn now touched on decentralization and security right now a theory on being one of the main blockchain networks we know scalability is an issue but maybe you could touch on some of the problems of decentralization and security and how Algar and is providing a unique selling proposition for those two features sure

2:32well I think the the way we would start is back to Silvio's take on how to create a foundational blockchain that really takes the best of what we know and make it that makes it better in the blockchain space specifically there are different types as you know of blockchain approaches one of the most famous being proof-of-work and many of the systems started there's certainly

2:56Bitcoin etherium and and you know all respect phenomenally disruptive and innovative technology I think that you know then we saw different flavors of proof of stake which is a little bit different in the sense that it has people who are actually in the network and participating in some way shape or form as powering that mechanism to drive block to block and to drive the

3:21blockchain forward from a transactive perspective so algerie is something that's called pure proof mistake that's a basic sort of next generation approach to driving a consensus mechanism that essentially says with everyone who participates and has any amount of stake in the network with one algo which is the currency that was launched by the Al Gore and Foundation you have one vote

3:45and as a result it is absolutely decentralized because there is not the ability to sort of concentrate or overly dominate in any particular one area driven by either your access to resources or accesses access to energy that you'd see in more of a proof of work system and we have everyone participating across the network on a stake weighted basis to validate each of

4:09the blocks that we have or being a part of that so highly decentralized that obviously that lack of central authority and really prevents therefore a lot of the centralized security issues that we might see that result from either dominating the chain or driving a chain and in ways that don't really reflect either the broader good or the broader consensus of the people who are

4:32participating from it so I think that you know for those reasons and for the fact that Al Gore Ann's design was actually proven out by runtime verification independently that it doesn't fork based on our consensus mechanism it's really become a much more trustworthy and and obviously transparent way for other institutions or participants to know that when they

4:57work with Al Gore and there won't be any of the confusion that's associated with that forking and the commensurate security risks those are two ways that we address those two two issues mm-hmm that's great Shawn thank you so much and could you talk a little bit about how long it's been in development for and at what stage is the development out right

5:15now sure so it's interesting we have Silvio McCauley has basically been doing this his whole life as one of the founders of modern day cryptography the technology finally caught up to his brain and we were able to sort of put things in place that we think are pretty interesting so his life has really been dedicated to this certainly the project has been going on for a number of years

5:39and and we closed around in October September October last year of 62 million dollars from a broad base of global investors and so the project itself has really been going in earnest as we've scaled up since you know early 20 2018 we now have over 50 people you know it's a global team and we are in terms of where we are we launched our

6:08main net open sourced our code about a little over a month ago and have seen you know 12 over 1,200 nodes are already participating helping to run the network in a very short period of time and we've been operating at a transactions per second of over a thousand and our block to block latency has been under five seconds and that is for every block to

6:30date so really really strong performance from the tech itself since inception mm-hmm Wow congratulations on the speed performance so far sounds like a great start you mentioned that you guys raised 62 million that sounds like a great amount to raise maybe you could touch a little bit on the investors and the partners so far that are involved with the project

6:50sure so we were very lucky we have a number of investors who participated and took a chance on us it is a global group more than two-thirds of the investment essentially came from outside the United States we we basically took a an investment model that really mirrored the philosophy of decentralization meaning you know there's a broad array

7:19of individuals who contributed fairly similar amounts to the project and they all have a participation incentive to actually be a part of the network and run the network so we get the best of both worlds a decentralized group of investors and and a something that is aligned sort of philosophically with where we're headed from a protocol perspective mm-hmm that's great now in

7:44terms of having a working business model your main net is live right now I'm sure there are some developers that are working on gaps for the Algar and blockchain how do you see the elgrand company driving business and creating a sustainable business moving forward yeah well I think first we start with with an approach in the team that is let's take what we think is the best technology and

8:11the best sort of developer and and tech team in the world led by Silvio and a number of other people who are luminaries in their own right and let's combine that with I think a very strong business team that also knows how to predictably and reliably execute against you know strategic choices that we make and as you know you know in many cases and in many companies doesn't have to be

8:35blockchain you know if you have good tech but bad execution you fail if you have good execution but the text not there you fail I think we've really from a build a sustainable business put a great group together I think demonstrated by you know hitting our milestones launching on time being able to execute and communicate to the market effectively so that's

8:55one piece I think the second piece is we genuinely wanted to avoid the problem of over promise and under deliver out of the gate you know we looked at the environment and very easy for projects to claim and then hopefully ultimately get to you know great places with what their tech is going to do but I think what we took was a very pragmatic approach to say we're going to build a

9:18very very fast core consensus engine that is going to be very good with you know high velocity transactions and we're going to be very measured about how we start to build both additional layer one capabilities into it and their two capabilities into that protocol so again managing expectations around what we would deliver also creates a recipe for success and stable growth and then

9:42lastly look there's a bunch of business models that we see coming into play certainly appealing to the developer community and getting people to build we actually just announced today flipside crypto has has put 2d apps on on alga ran that allow you to do base analytics for any developer that actually starts a built an app on D app on our platform they're going to be able to measure for

10:05free the performance and see how that's doing across the network so you know there's a bunch of effort to build those types of things but also you know working with businesses to help build continually more sophisticated financial instruments where people can come in and build those instruments on top of Al Gore and we're one of the only block chains if not the only that has a seat

10:26at is de which is the International Swaps and Derivatives Association where essentially we are taking the well-known sort of you know financial models that they've developed and working with them to translate it on to the blockchain and then give people access to that through through is done so there's a number of I would say you know streams of both build

10:51the team build the right tech foundation make sure you execute and then start to layer on with new technology and new tools yeah that's great Shawn execution really is important to the success and I'm glad that your team is focused on that and if we could touch a little bit on that how do you plan to execute and what is the roadmap now that the main

11:11that is launched in the next six months to 12 months how are you going to grow the developers in the ecosystem sure well there's a whole bunch of things we're doing I mean first we we have we certainly we have our developer website that's up or this number of API s and SDKs where we're starting to do I think fairly broad outreach the community we've done you know probably 50 or 60

11:33meetups around the world and continue to engage with that group silvio in fact right now is on the road and he's doing meetings in europe so i feel like there's a desire to continue to both build for simplicity and engage with developers so that they can easily start to build apps on top of algorithm that's definitely a big part of it i think a second is really looking at the roadmap

11:55that you mentioned we sort of break those into a couple of buckets I think the first bucket is continuing to optimize performance there's a couple of features we're calling vault which is our solution to reducing the storage footprint even further or helga rounds very light storage product anyway like demands but making that even better there's a product called pixel which

12:17essentially helps reduce bandwidth requirements continues the performance there's a bunch of things there but there's also some things that I would say are more forward-leaning you know certainly look at what we're calling smart squared contracts the next generation of what that would be and how we would execute against those is very high atomic swaps is something that

12:36we've talked a lot about but again Silvio likes to call that atomic squared swap so you know you can do the math that's how much improved it is and there's several other things that we're looking to layer in as lair to capabilities that really start to differentiate one and then expand the range of opportunities that can be built all those are actually found in a blog

12:57Silvio wrote about our forthcoming technology it's out there people can certainly check that out for more detail Wow sounds like you guys have a lot on the go and that's very promising I'm looking forward to seeing those updates now one thing you just touched on a minute ago was the financial derivatives and swaps I'm interested in learning more about other business use cases are

13:17you seeing financial instruments as one of the main use cases for Algar and/or where else can this apply to the business world yeah I think so I mean I think there's a concept that we've you know it's been out there but that we talk a lot about which is decentralized finance and we think you know making it easy for people to leverage the blockchain to be able to

13:34expand their markets grow their markets and really offer you know more sophisticated financial vehicles to their users is a super valuable thing and powerful thing you know one use case that we've talked about is asset block which is a commercial real estate company that is effectively looking at cross collateralizing loans part of that loans collateral being based on actual

13:58real estate part of that loans collateral being based on digital assets really brings those two things together forms the basis for giving loans and favorable rates for people so that's an interesting one there's a number of others that are out there in terms of creating additional insurance products sort of doing what is they did except with insurance vehicles again developing

14:22that on top of Algar and so a bunch of appeal in that space in the commercial real estate picked space as well as a place that we've really started to see some early traction which is on payments and payment platforms see a lot of legacy payment platforms out there that are looking to make sure they're strategically relevant in the future and I think they see a way to leverage

14:45blockchain or one that you know was constructed the way out there and is to be that bridge towards more relevant and I would say technically innovative platform for you know the next 20 years or whatever it might be so a lot of good good traction in those areas for us great Thank You Sean and how can people learn more about the project are you looking for more end users or more

15:09developers and what's the best way to learn more that's a great question so look we have Al Gore and developer gorg and that's the developer site we have community Al Gore and org and that is the community site without being sad I mean look our priorities are continue to add developers continue to engage with that community also you know really make

15:33sure that we are sort of visibly you know sort of highlighting use cases and interacting with with other companies so that you know they get a chance to partner with us and try out try out the sort of poor protocol since it's open and it's sitting there for them now so I would say it's really two prongs it's engaging with businesses that are looking for a

15:53next-generation application for what they may have in terms of their core products and for developers to come and join us and both build and then you know watch the performance of that V app on top of valgrind platform it's it's been like I said great growth in the first month and we're really excited about where we're headed that's very exciting I'll leave those

16:14links in the description box below thank you so much for your time Sean that's all the time we have today let's follow up in the near future great thank you so much ash it was great seeing you