How blockchain plays into the future of money, payments: Algorand Foundation CEO
Algorand Foundation CEO Staci Warden joins Yahoo Finance Live to discuss Algorand, managing personal finances using blockchain technology, and the prospects for AI optimization.
Video transcription
RACHELLE AKUFFO: Cryptocurrencies and blockchain technology set the stage for a new era in personal finance, digital payments and all kinds of financial transactions, but it also goes far beyond that. Joining us now to explore the promise of blockchain and how it will change our lives is Algorand Foundation CEO Staci Warden. Thank you for joining us this morning.
So for many wondering, I know you have a pure proof-of-stake approach with Algorand here. However, what does it mean for the average person trying to understand how blockchain can work in their lives and in their businesses?
STACI WARDEN: Yes, we are a layer-one blockchain, meaning we provide the underlying layer for all kinds of people to build on top of us. So we don’t build specific applications. We make it possible to build applications on top of us.
And we have a very efficient blockchain with a very low carbon footprint. We were founded by Silvio Micali, who is perhaps the world’s most famous cryptographer, living cryptographer. He’s a Turing Award winner, a tenured professor at MIT, all the way.
And our blockchain uses a pure proof-of-stake consensus mechanism that allows it to be very decentralized and also very fast. So we’re doing about 6,000 transactions per second, moving to 10,000 transactions per second this year, at a very low cost. So it’s a sub-penny transaction fee. And a very light carbon footprint. So we use — and again, it’s our consensus mechanism that enables us to do this. But we use the energy of about a small neighborhood, and we buy carbon offsets to make sure we’re always carbon negative.
BRAD SMITH: How will people, Staci, realize the difference, the delta in their daily experience when blockchain is really part of that experience, and what will the benefit be?
STACI WARDEN: Yeah, I mean, I think about the big five, and number one will always be payments and smart payments. And, you know, right now if someone in Brazil wants to use– to send someone in France a movie, they can do it in one minute over WhatsApp– a movie. But if somebody in Brazil wants to send somebody in France $10, you know, it has to go through the correspondent banking system in the United States, clear at the Fed. Some take between 6% and 8% of the peak and it can get there, you know, four days later. And the fundamental value proposition of a blockchain is actually that that currency doesn’t move at all. It is that there is one ledger.
You know, the history of financial transactions has been really in the last 10 years that every bank has a balance sheet, and the messages between these balance sheets have become better and more efficient and cheaper. But a blockchain is a completely different animal. There is one ledger. So that transaction between, say, Brazil and France will happen immediately. It will happen in 3.9 seconds on Algorand – no branch, final settlement, not reversed. And that’s just one huge, fundamental thing to understand about blockchain.
And then in addition there are things you can do on the blockchain like marshal identity. You can do tracking of goods, so for the supply chain. You can get a better – a more democratic governance system, and you can tokenize assets in the real world.
So it’s– you know, I call them the Big Five, and I can talk about each one of them, but I think the important thing to understand is that there’s one ledger that everybody writes to. And, of course, if there’s one ledger, you can’t have one entity controlling that ledger. It has to be decentralized because if one, you know, computer gets attacked, it has to be able to live in a healthy way on all the other computers.
RACHELLE AKUFFO: And I want to ask you—because we’ve obviously seen generative artificial intelligence front and center. How do you see it playing into maybe the speed and reducing the cost of things on the blockchain?
STACI WARDEN: Well, I don’t know that AI has much directly to do with blockchain, but for the apps that sit on top of blockchain, you can certainly imagine AI-type optimization of protocols, for example. And of course, the messaging and communication between AI-type bots and the user interface I think could have a much better user experience.
But you know, the idea of a blockchain is that transactions are entered, and then they’re immutable. So a blockchain is not so much about truth, but it is about integrity. And so you know when something is put in, no one else can mess with it, and that turns out to have very important implications for all kinds of things.
RACHELLE AKUFFO: Actual. Well, we appreciate you joining us this morning. Algorand Foundation CEO Staci Warden, thank you for joining us this morning.
