Scaling On Chain Financial Apps

Algorand came on the scene in 2017 with the promise of a blockchain that would bring radical improvements to the scale and speed of blockchain transactions. The Algorand team has delivered in a big way with blockchain infrastructure that can scale to billions of users, tens of millions of daily transactions, all with negligible transaction fees. And, unlike first-generation blockchains, Algorand’s platform was designed from the ground up to address the unique requirements of global payment applications and financial networks. These are critically important attributes for the stablecoin ecosystem as large financial institutions around the world begin to add digital dollars to the mix of products and services offered to businesses and clients. Just a few days ago, USD Coin (USDC), the fastest growing, fully-reserved and regulated digital dollar stablecoin surpassed $2.3 billion marketcap, representing nearly 500% growth YTD and over $130B in on-chain transaction volume since launching just two years ago.

To keep pace, Centre Consortium, which oversees the USDC standard and protocol, announced a framework for Multichain USDC. Earlier this month, Algorand became the second public blockchain to be certified by Centre as an officially supported chain for USDC. With the launch, Algorand brings over 1,000 tps and transaction fees of 1/20th of a cent to the USDC ecosystem. In conjunction with the announcement, Circle announced broad support for USDC on Algorand in its global financial account and platform services for businesses around the world.

This week, it's with great pleasure that we bring Algorand founder, Turing Award winner, and MIT professor, Silvio Micali, to the show to share his thoughts on the state of the Algorand blockchain the major innovations coming down the road, including the implications for the use of USDC. We're also excited to have Algorand CEO, Steve Kokinos, on to discuss the incredible trajectory of the organization, the fast-growing global community, and industry and use-case priorities as we round out 2020, what's shaping up to be an amazing year for stablecoins and proof-of-stake blockchains.

Jeremy Allaire: Hello, and welcome to the Money Movement, a show where we explore the issues and ideas in this brave new world of digital currency and blockchains. This is our 20th episode of the Money Movement which is exciting. We've got a great episode which we're going to talk about in a second, but I actually first wanted to mention that next week, the 21st episode of the Money Movement, we're going to do an ask me anything. If you're interested in asking me anything, that's your opportunity. You can tweet at us and we're going to be promoting in a few places and that'll be a live MA next week, next Thursday at 1:00 PM, same time, same place.

This week we're talking about USDC meets Algorand. For those that aren't familiar, Algorand came on the scene in 2017. It was a blockchain project that offered the promise of bringing radical improvements around the scaling and speed of blockchain transactions with a particular eye on financial applications. Really the Algorand team has delivered in a very big way with blockchain infrastructure that can scale even to potentially billions of users, tens of millions of daily transactions, all with negligible transaction fees.

I think unlike first or second-generation blockchains, Algorand's platform was designed from the ground up to address many of the unique requirements of global payment applications and financial networks. These are, I think in our minds, really critically important attributes for the stable coin ecosystem as large financial institutions, global consumer FinTech firms and others around the world begin to add digital dollars to the mix of products and services that they're bringing to businesses and clients around the world.

In pursuit of the ultimate goal of USDC being a standard protocol that can be used really, really widely as a digital dollar on the internet, Centre Consortium, which governs the USDC protocol and standards and a variety of facets of the operation of USDC, embarked on a multi-chain USDC framework earlier this year. At the time we announced that Circle was entering into a partnership with Algorand to bring USDC to the Algorand blockchain.

Last week, I believe, or very recently, Centre Consortium announced that Algorand had become an official chain supporting USDC and Circle today, in fact, rolled out broad support for the Algorand blockchain in our platform services offerings including the ability to seamlessly do swaps across Ethereum-based USDC and Algorand-based USDC which is really key for interoperability.

This week, we're going to talk about that. We're going to talk about Algorand. We're going to talk about stable coins and the future of financial applications on blockchains. It's really with great pleasure that we're bringing Algorand founder, Turing award winner, and MIT professor Silvio Micali to the show. He's going to share his thoughts around the state of the Algorande blockchain and major innovations coming down the road, including the implications of having a digital dollar like USDC on Algorand.

Then we're going to turn to Algorand CEO, Steve Kokinos, to discuss the trajectory of Algorand, the organization, the global community, the ecosystem, the industry, and use case applications that we're seeing for Algorande in 2020 and beyond, and really what's shaping up in this space. With that, we're very excited to welcome Silvio. It's great to see you.

Silvio Micali: Great. Thank you very much, Jeremy. Great to talk to you and your audience today.

Jeremy: Excellent. Well, I love to start with an origin story. Obviously, I think many people have followed your career and your history, but maybe just for folks here who haven't, just very briefly, a little bit about your history and how you came to fall in love with crypto and pursue Algorand.

Silvio: Oh, great. I started like a computational theorist, [unintelligible 00:04:54] systems, logical schemes, and then have a long time interest in cryptography and then distributor computation, and then evolved into economic mechanisms. Suddenly, I somehow finally heard about crypto in the sense of no cryptography in my case, but the cryptocurrency says, wow, that is really a intersection of always feels cryptography and a distributor computation and economic mechanism which is a paradise so let me learn about it.

I started learning about it and I confirmed that was a great idea, but somehow the solutions seemed to me quite inelegant, and because somehow criticizing is always easy and constructing is a bit harder, I decided to lock myself up for a few months and try to see if I could throw my heart in the arena and design things in a different way.

Jeremy: Well, that's fabulous. I think this synthesis of so many different, I think pretty significant and advanced fields is part of what makes this all interesting. I know for the legal profession this is a very challenging and interesting area and certainly within fiduciary industries as well. Let's talk a little bit about that breakthrough. When you went off for a few months, what was the core breakthrough of Algorand? In layman's terms, what were the elegant solutions that you were trying to bring forward as compared to the inelegant solutions perhaps that you had encountered?

Silvio: The hardest part in a blockchain is not to make sure that all these database cannot be corrupted, but the hardest part is to decide the next block. Who should decide and how, and how does it become a common knowledge and not just an individual choice. Somehow everybody has in mind that long diluted process. Somehow I appended my block to the longest chain that I see, assume the longest chain that I see as a block that was produced by you, Jeremy, I append my block to yours. This is interpreted like a vote that your block is correct. Somebody appends a block to mine, she's voting that my block and your block are both correct. That is a longer process and the more time passes, the longer the chain becomes and somehow gives you confidence that these blocks are going to remain in the chain.

What I felt and say, I understand this dilution and the drip, drip, drip, and a consensus is necessary to be fast, but I decided can't we just bite the bullet and agree on one block in such a fashion that you would never had to come back. I agree on the block and then now becomes everybody, not only me, but every entire community against on the block. The block is permanent. Next block. We agree on the block, next block. Every time we add a block, we know that we have not to look for the longest chain because there is only one chain.

I decided in my adventures in distributor computation land that there was no quintessential algorithm called Byzantine agreement, no adjectives that modified to make it weaker, but the original Byzantine agreement. They say, why don't we Byzantine agree on each block? Well, the problem was that at that time, the fastest algorithm for a practical application allowed maybe 12 participants. If we want to have a blockchain with millions or billions of participants, forget it, that was not cutting the deal. The need was to invent from scratch a new Byzantine game protocol that scale at that level. That I would say is really the fundamental thing.

The other one, if I can add, you need a second one is to have somehow to form committees which are somehow where committee members are not selected by me, even for bid or for somebody else, but actually, randomly self-select to be part of this agreement. Of course, if you say randomly self-selected looks bad because if I'm a bad person, I self-select myself all the time not randomly. The idea is to use these verified random functions to guarantee that there is a cryptographically fair selection in which I can select myself by running a cryptographically fair individual lottery, and it's like a slot machine whose labor you can pull it once.

If I win, I've a winning ticket proving to the entire world that I am a member of the committee to approve an extra block. If I don't win, I have nothing to show for and therefore my opinion is ignored. That essentially is the essence of that you get this winning ticket if you get it. If you're ready too, you propagate it together with your opinion up or down about the block. Why this is secure? Because the polling [unintelligible 00:10:25] slot machine is a microsecond. It is distributed because anybody who has one algo, one token can participate to the slot. It's so simple, it is.

[unintelligible 00:10:36] are also secure because if not the adversary wants to corrupt some other members of the committee, he doesn't really know who should corrupt this lady in Shangai, this other guy in Paris. He doesn't know because the winner is going to be the winner of a lottery as nobody can predict who is going to win the lottery. Once we propagate the winning ticket and the opinion about the block, I can become known to be a member of this committee, I can be corrupted. At this point, it's too late to corrupt me because my winning ticket [unintelligible 00:11:10] virally propagated over network and therefore the adversary cannot put it back in a bottle no more than a government can put back in a bottle a message of virally propagated by WikiLeaks.

The system is secure, because beforehand, you don't know whom to corrupt and exposed after the facts is a bit too late to corrupt.

Jeremy: I remember you giving a talk at the MIT Bitcoin expo or I forget what they call it, and I was very struck by what you were outlining, and it struck me as, at the time, what I felt like was one of the best ideas out there. Here we are today and the Algorand blockchain went from that set of Genesis ideas into a living, breathing, operating secure global tamper-proof transaction and data storage machine, which is pretty remarkable.

Maybe just talk for a minute about, what is the capacity of Algorand today, a couple of years, and then a lot of significant R&D and work and launching and now getting an ecosystem built. What is the state of the Algorand blockchain today?

Silvio: Well, the state of the Algorand blockchain is strong, and it becomes stronger too. First of all, we actually do scale, and that not only we scale in number or transactions, but actually we scale in the consensus. Everybody who is willing to participate to the consensus will lower the bar or participation solo, but anybody who has an interest and has one algo, can actually participate to consensus.

When the scales, also number of transactions, but I want to make sure that these are transactions on-chain properly and honestly counted like some transaction off-chain that I can imagine that I can do trillions of them. Moreover, I want to say that the visa transaction that actually are sophisticated, not just the ordinary payment. There is nothing so simple about an ordinary payment as you know, particularly if it is internationally and so on, so forth.

A visa actually, layer one are smart contracts. An ordinary payment in a simple and a secure as an alternate payment in Algorand is you have an asset that I want, I have an asset that you want, and we want atomically, namely in undivisible transaction, we exchange our assets without the help of anybody, without chaperons, without financial friction, we can transact.

I don't care if I push the button first to send you my asset, because I do know that unless you send mine yours, the asset never leaves my hands. This is also one transaction, [unintelligible 00:14:08] is atomic in Algorand, and a lot of this other layer one smart contracts leave at the same consensus level, with the same security and we are native to the protocol. I think this will simplify a lot of things.

This is the current status, and we are going to make it even better. Our transactions are going to multiplied by order of magnitude in any way and we are going to get a normal quantum resilience and we are going to get a lot of other good stuff in days to come.

Jeremy: That's fantastic. As I've heard you talk in the past about your vision for the use of blockchains. Here, I think we generally are talking about things like Stablecoins payments, financial applications. We can talk about that, but this architecture that you've created, it's quite generalized and it can be used to store verified data in a really wide range of use cases. What are some of the other uses for Algorand that you're really excited about, whether they're already projects or just things that you think should be built?

Silvio: First of all, I want to say that the democratization of finance continues to be a main goal and a shared goal, in fact. I believe that not only we want to put at the reach of everybody of man or woman in the street, very sophisticated financial tool, because the first form of freedom is financial independence, and [unintelligible 00:15:55] number one. That said, blockchains is going to be announced soon, some country which is, I would say, known to you and to others is going to use it to implement a national call list.

In other word, do not call me, and when the blockchain somehow guarantees what I said than what I did not say. By the way, this also enables flips of [unintelligible 00:16:22] because it's a very easy step to go from a do not call me or I want to be called. You can push my product to me, but guess what, I want to be paid, if you don't mind.

Jeremy: A great use of this public data. Everybody can see it, it's perfectly verifiable, there's no manipulation or fraud. It's fantastic.

Silvio: Exactly. Finally, rather than being asked always the product [unintelligible 00:16:46] want to say, I want to be paid for my services to giving fair consideration to your product. Another example I believe of it, we are going to have a trusted transaction we are introducing. This is a joint effort of our community, but also somehow trusted communication.

Strange enough, I believe that the blockchain properly used, don't ask me for details, because we are going to keep it under the radar still, but we want to use it for doing certified email. You want to say make sure that not only sending email is easy, but I want to say that when I send it, I know and I can prove that you got it and that is elevates to [unintelligible 00:17:35] The user can be so massive, and the trick is going to be out to make sure that such a massive use can actually be handled by the blockchain.

This blockchain is the gift that keeps on giving because no day passes by that we at Alogrand or your Circle or a Centre and everybody else in the world thinks of new ways of applying this technology is fantastic.

Jeremy: I think, certainly one of the things that has attracted me about the blockchain space as a whole and Algorand specifically is the generalizability of this into so many different domains where verifiable information is so key, and it's such a fundamental challenge with the existing internet architecture that we're all facing. I think as you know, from our partnership and work together, fintechs, banks, investment banks, central banks, more significant financial institutions are getting involved. Scalability is of paramount concern. Security, of course, is of paramount concern. What has the history of scalability been in blockchains, and why are so many financial institutions excited about Alogrand from a scalability perspective?

Silvio: Scalability, I think that nobody wants to have a blockchain to just play with friends and family. The world is a large place, and we need a scalable blockchain to really interact with the world at large. As I was saying before, how do we interact? It's not only a question of posting transactions about actually of engaging, for instance, smart contracts. I think that is one of the main gifts of the blockchain. The scalability of a smart contract has been for years more in doubt, than the scalability of ordinary transactions or consensus. I really believe that the world wants these smart construct that scale and that is going to be paramount. Not only just ordinary transaction but a smart contracts as well. We have actually architecting and next year we are going to unveil our platform. By the way, the same way that this platform is going to be as innovative in smart contracts as our consensus protocol has been innovative. Don't expect the usual, [chuckles] but expect something that really scales, and somehow prevents blocks to be delayed because have to processes smart contracts. The blockchain continues and the smart contracts enter the wrong track with the same scalability, security, and decentralization that ever characterized the algorithm.

Jeremy: It's very exciting, and I think one of the things that we've remarked on and a lot of what motivated us with USDC has been this base expectation that eventually value exchange or simple transactions would become effectively ubiquitous and free and instant, but the real value is the programmability of that and if you can have a trusted, verifiable, scalable kind of compute engine for these fiduciary trust applications. That is what really unleashes the business model innovation in commerce and finance and other things.

I guess an obvious question related to some of the announcements we've recently made is, what role do you think USDC can play in the Algorand ecosystem?

Silvio: Well, let me start with the obvious. Somehow we are going to create together and the rest of the community all kinds of new assets. The people will enjoy using them, owning them, and so on and so forth. The first problem they're going to have is evaluating them, giving a value to these assets. I really believe that USDC is going to play a major role in that creating some common reference system in which we are, actually, because everyone understands what the value of a dollar is, but it is going to be like if you want a flywheel in this very complicated mechanism.

That said, when we have actually, our particular [chuckles] use and reliance of USDC and stablecoins and if you promise don't to gill me before time, for instance speaking those smart contracts you believe, and we agree, that are really one of the major gift of a blockchain is going to be, we think that there should not be gas in our smart contract, but that we should use stablecoins in order to somehow pay for the execution of this thing.

Because very often people are say, "The contract is expensive." The contract it is low, and even worse I cannot even budget for how much money should I put aside to run my smart contract. We are going to architecture it in a way in which we are going to hide this away from the consumer and they can budget properly for the smart contract we want to execute, and so unless it's going to be a piece of a bigger architecture that we have in mind for smart square contracts, we call them, because they are going to be smart contracts that for a change are going to be really smart as well. [laughs]

Jeremy: I love it. I think, yes, using a stablecoin as the pricing mechanism on the compute and other functions is, obviously, I think, will be very helpful for developers and the ecosystem. Maybe last question for you. You've moved at, I think, breathtaking speed. I know these things always-- Sometimes as entrepreneurs, they take longer than we hope, they take a long time, but I feel like you guys have executed really well at a really great pace and continue to, very high level.

What are the major advancements in the next two to three years? I think you've touched on the smart contract execution environment being on par in terms of scalability and speed, and I'm sure there are lots of other goodies. What else is on the horizon that you think is going to be a breakthrough?

Silvio: Well, one thing is going to be a blockchain interoperability. We have to understand that if we want to have been in the market, to be the sole player in a market, [chuckles] you don't have a market. There is going to be also a market of blockchains, and certain blockchains are doing better or doing certain things. We expect this to be happen because there is a good and specialization, but as you want to service your particular assets, you may want to bring them to a blockchain where its going to be best served. You want to transfer whatever asset and be sure it can be transferred back post execution, or that you are welcome to join a blockchain, and then leave there because you know that you can get up and leave any time.

Somehow this interoperability has been like in blockchain world an aspiration. I believe that is very good to start with aspiration. Our aspirations as humans, we should be as high as we can, but sooner or later, technology has to sustain these aspirations otherwise becomes just a dream, which is different from an aspiration. Blockchain interoperability, I think is going to be what we are going to focus and to make sure that actually is going to be done in a distributed fashion. Because right now, if I want to transfer say, an asset from a red chain to a blue chain, two things are true. I trust the red chain because my asset is in the red chain, and I trust the blue chain because I want to transfer my asset there.

Right now, I should not trust anything else, and then right now we are actually having this centralized token bridge, which will say, "Trust me. I am John Doe and I can guarantee you that to the blue chain that this asset no longer exists in the red chain and is open for sale on the blue chain," as always, John Doe. [chuckles] Well, if you don't like John Doe, we can make three, Jane D, John Doe, and Jim, but who cares? Who are these people?

What we want is that you want to trust only the chain and nothing else so we must to find a way to express the will of an entire blockchain in some fashion that is understood by other blockchain and really is not at the whims and not at the captive to anybody in particular. I think we need this to have a really the marketplace [unintelligible 00:26:53] [crosstalk]

Jeremy: We're on the same page there, our vision--

Silvio: Perfect.

Jeremy: Multichain USDC and USDC has a protocol that can work across these, obviously things like token swaps, you might depend on a governance mechanism or a regulated intermediary and there's some degree of trust there but in the grand scheme it is no substitute for what you're describing as well. Actually, Silvio, this has been a wonderful conversation. I really want to thank you--

Silvio: Likewise. Good to see you again, Jeremy. [crosstalk]

Jeremy: Thank you so much.

Silvio: Thank you. Bye bye.

Jeremy: Wonderful to have Silvio on and just animates this technology in really incredible ways, and just so excited to see what comes out of his continued innovation at work as we go forward. I want to turn now to Algorand CEO, Steve Kokinos. Steve joined us to talk about the broader global community that is building around Algorand, the industry in use cases that we're seeing right here and now, and what's shaping up in the year ahead. Welcome, Steve.

Steve Kokinos: Hey, thanks for having me, Jeremy. Great to be here.

Jeremy: Excellent. Thank you. Let's just start with some basics about Algorand foundation, basics around Algorand and its commercial endeavors, kind of where is that today and what's that trajectory look like?

Steve: Yes, so Algorand launched a public permission-less network about 15 months ago, and I think we've seen a lot of really good growth. The way that the project is segmented, the Algorand Foundation is responsible for governance of the public protocol, along with several other areas, continue to grow the community and focus there. Algorand Inc. which is a US company is focused on core development, really core research, and core development of the protocol itself, and continues to be the core developer today, and expect to continue to do that. I think led by Silvio, we have really interesting research that's gone on. I think the response overall to the launch of the network and continued technological innovation has been really great.

We have nodes run on every continent except Antarctica, very geographically distributed network. There's about 400 projects and companies that are building applications or supporting Algorand today and seeing a lot of growth in terms of new wallets and users in response to applications deploying on-chain. We just crossed about five million users a few weeks ago and are seeing continued strong growth there. Really excited, I think not only at the response of the tech, but excited to see people using what we've built in really interesting ways.

Jeremy: That's a great segue to-- USDC is now an on-chain asset on Algorand. On-chain financial applications, I think, are huge. Let's talk a little bit about that. What are the segments' use cases? Where do you think USDC is going to get applied first and where do you think it grows within the Algorand ecosystem?

Steve: I think, and I know Silvio mentioned the idea that you need a consistent unit measure across assets. I think if you look at some of the key primitives that we brought into layer one, one is that ASA framework, so the ability to create assets in any form and manage them very flexibly, atomic transfers or another, and layer one smart contracts are another. The ability to execute anything that you need at the full speed of the chain.

I think that one of the priorities we've given is scalability, but not at the expense of either decentralization or security. I think, especially for financial applications, security is very important. When we look at financial applications, we think they take really a few different forms. One are in a new emergent applications, especially in define area. We see USDC as really the fuel behind a lot of how those applications run.

The second is, we're starting to see a lot of interesting activity in traditional finance and also payments. I think if you think about people starting to use crypto for more retail use cases, starting to use it at higher transactional velocity, they need both a stable coin like USDC, but also a platform like Algorand that actually can and was designed from the beginning to scale to hundreds of millions or billions of users without changing the performance characteristics.

Then, ultimately, we're seeing, I think other forms of currency emerge. The Marshall Islands recently announced that they're launching their national currency in Algorand. I think we're going to start to see more Central Bank digital currencies in this. I think if you take a step back, what we really think about is, what forms of financial products are going to come next? As you bring these assets on chain, how do you transact around those assets?

I think really this idea of programmable money that I know you've talked about a lot is something that we're really passionate about. I think that the primitives we've created are uniquely well-suited to enabling. We think about it both from a technology standpoint, but also about the community that you need to build and the asset diversity that you need to have on chain to really make the ecosystem useful.

Jeremy: That's really helpful, Steve. Let's maybe just drill in a little bit. Algorand has entered into a partnership with Centre Consortium around becoming an official chain, and then, this partnership with Circle as well around supporting our brand across our new suite of platform services. Why are these partnerships important from your perspective?

Steve: Well, I think they're important for a number of different reasons. One, we believe really strongly that a blockchain like Algorand, ultimately, is a utility and should be a public utility that anybody can use. Today, if you think about even just basic utilities that you have at your house, it's water, electricity, and probably used to be phone but today it's internet and not phone anymore. We think the blockchain needs to move in that direction, and I think partnerships with projects like Centre and Circle are really fundamental because I think one of the big differences in the decentralized world is that we can't build all of the things that are needed for a healthy ecosystem of ourselves.

We need people to be going out and moving forward in their own areas, and ultimately that where we want to focus is on innovation and technology and building the right tools and the right frameworks, so that great applications can come and deploy. I think, definitely, stable assets, like USDC are of critical importance. I give an example. Republic is a project that's launched on Algorand recently and they are a crowdfunding and investment platform.

Republic is a security token of a registered security token in the US, and they want to be able to issue dividends to their users via atomic swaps. They're going to do that by effectively issuing dividends using USDC on chain with Algorand and that's going to be the way that they provide USD value for the investment people have made. I think that's like a really powerful example of how all these different things work together, where there's people taking advantage of the platform, people taking advantage of USDC, and ultimately end users that are able to participate in financial applications that simply didn't exist in a traditional world.

Jeremy: The idea that you could own an asset, then it's just like streaming out dividends to you instantly just into your wallet, it's pretty powerful. I love that. I think that digital securities I think are certainly a sweet spot for you guys and we hopefully will play a big part in that as well. I think related to ecosystem. Obviously, other blockchain projects have varying levels of history. Some have been around since Bitcoin for a very long time, Ethereum since 2015. You guys launched last year so there's obviously these arcs and people build communities around them.

Right now, obviously, defiles is really hot, and Ethereum's strained under the weight of those applications that's making usability for a variety of applications challenging. Do you see this as a window of opportunity for Algorand to step out and get in front of not just BFI developers, but developers on blockchains in general to say, "Hey, third generation blockchains are here. You don't have to wait for Ethereum 2." What's your take on that?

Steve: For sure. I think that, definitely, Ethereum has built a really interesting community, and clearly has a variety of applications. I think at the same time, if you're trying to build a business, and you're building it on a blockchain where what is going to cost you to run that application and what it's going to cost your users to transfer assets around is unknown, I think that's a very difficult thing to do.

I think as far as existing applications, definitely, I think we've tried to tailor what we have in a way that we think will be attractive. I think scalability and performance are important. We think decentralization is also very important as well. We see a lot of projects that have made decentralization compromises in order to achieve performance. We don't feel that's the right way to go about it.

At the same time, I guess the other thing we think about though, is the constraints that a lot of the first or second generation platforms pose have kept people from being able to deploy applications of scale in a meaningful way. If you look at Props as an example, who deployed recently an Algorand. They brought over four million users that they migrated from a permissioned chain. The reason they had it in a permission setting wasn't because they wanted privacy. It was because there was simply no other way that they could get the performance they needed. They really favor transparency in being on a public network. I think what's really exciting about an application like that is that it's really millions of new users to the crypto community that weren't in it before and are excited about their application, which is about loyalty points and earning money for using different applications.

I think it's a really cool idea, but I think from our perspective, when you look at the size of the crypto community today, even though it's vibrant, it's still very small compared to the remainder of the world. There's only probably a couple hundred thousand developers that build blockchain applications today, but there's almost 20 million that build mobile and web applications.

The same is true in terms of just retail consumers out in the world. There's billions that need to be introduced to digital money and decentralized systems. I think largely the way they'll do that is through interesting applications that deliver value to them. For us, what we're really focused on more than necessarily worrying too much about what goes on in the existing crypto community is how do we encourage new applications that can generate scale quickly and really show the power of blockchain platforms and decentralized platforms and introduce people to digital money at a scale and ways that haven't really been done before.

I think that's when you look at the developer tools we've built and the way we've approached the technology, it's really with those things in mind. I think definitely by the way, the define world is super interesting right now. I think what's fascinating about it is when you look at how define is start to approach things like governance and financial applications. What we're seeing now are, really financial tools and applications that, A have never existed before and B couldn't have existed in a traditional setting. To me, that's definitely exciting is something we want to see more at an Algorand for sure, but I think it's part of a bigger story.

Jeremy: Yes. I think we hear a lot of those views. Maybe last question which is, I always ask people to put on their vision cap or their future looks. Given the conversations that you're in, given what you're seeing that's happening, given the interest from a lot of different types of players in the industry here, what do you think is going to surprise people over the next 24 months? It relates to the last question about the mainstream apps, things like that. What is going to surprise us? Obviously, I'm thinking that in the context of applications that might get built on Algorand or use things like USDC. What are the things that we should be on the lookout for?

Steve: Well, I think it's an interesting time. A few years ago, if you look at what was going on during the Bitcoin boom days, it was very retail driven. I think it was a very early time in the market. I think a few years on, what's been encouraging to us is the seriousness and the resources that large institutions are putting into really thinking about long term investments around digital money and blockchain and digital assets that countries are doing the same.

I think the the seriousness of those discussions and the likelihood of that helping generate scale will probably surprise a lot of people as it starts to really hit the market. At the same time, I'm not sure it should really be a surprise. China has announced they're going to issue a Central Bank digital currency. They're being very aggressive about it. It was recently announced. There's BSN, which is going to be the Chinese blockchain network. Algorand is one of five public chains that'll be permitted by the Chinese government to operate in China.

I think what we're starting to see now are the early signs that some of the scale and some of the bigger applications are going to come. I think that that's an indicator of what we'll start seeing in other parts of the world as well. I think the underpinnings are being built today. I feel pretty confident that we're going to see, not just millions, but probably hundreds of millions of users using the kinds of applications that we're building in the coming years.

Jeremy: We are excited to see that as well and I think we share your optimism for the next couple years on that as well. Steve, thank you so much for joining and of course, for the work that we're doing together. Really excited to see what transpires from that.

Steve: Thanks so much for having, Jeremy. We love working with you guys and it's always great to see you.

Jeremy: Excellent. All right. Have a great day, Steve.

Steve: You too. See you.

Jeremy: Thank you. It's great to connect with leaders that are innovating in the fundamentals of this technology. I'm very, very excited to see what developers are going to do with this. As I noted earlier, we launched today a whole guide to using Algorand with USDC for convertibility between USDC on Algorand and Ethereum, and some pretty cool stuff out there and we're expecting to see a lot of developer activity.

As noted at the start of the episode, next week we're going to do our first Money Movement AMA, so spread the word, fire us questions, fire me questions, be excited to do that, and hope to hear from as many of you as possible. Until next time, stay well, stay safe, and stay informed.

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[00:44:13] [END OF AUDIO]

Steve Kokinos
CEO, Algorand
Silvio Micali
Founder, Algorand

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