Podcast #2 Extinction Level Event
The future of the traditional financial system has been in the limelight for the past couple of years. The discussions about the 1% of people owning 99% of the Earth’s resources and wealth come more and more to the surface. In this DeFi podcast, the co-Founder of Woorton, Karim Sabba, was joined by
Emin Gün Sirer, professor at Cornell University and founder of Ava Labs
The discussion revolved this time around different family protocols that exist today, the problems they are set to resolve as well as the mission behind the Avalanche Protocol. Some of the key takeaways include:
- IC3 Initiative and challenges in blockchain for finance
- The role of smart contracts in society
- Protocols for distributed systems
- The new protocol family: Avalanche
IC3 Initiative and challenges in blockchain for finance
IC3 Initiative is a multi-institutional effort which contains around 15 to 16 researchers and 150 students working together on various kinds of blockchain. There is a lot of interest expressed in the society for blockchain but there is no proper deployment of proofs-of-concept. People with traditional financial background are good at trading assets but have no idea how to translate these assets into the crypto world. Bridging the traditional and the blockchain industries together brings insurmountable problems at the moment.
The role of smart contracts in society
Like written rules in Babylon, smart contracts bring confidence that the law is not in the hands of a single ruler. They are codifying a set of business logic that cannot be changed. Smart contracts help to create a straight channel that cannot ever possibly direct the funds elsewhere. It is a powerful approach because it allows to get rid of the intermediaries that have historically existed in the financial system. This approach is ahead of large US banks that have not seen innovation since 1956.
Protocols for distributed systems
Distributed systems aim to resolve the problem of agreement on the outcome of events for a large number of players, in this case – computers. The problem of the Byzantine Generals was successfully tackled only by the two families of protocols in 45 years that people have been exploring distributed systems. There are classical consensus protocols that are similar to the protocol scenarios in the parliament for a small number of senators. Facebook Libra is based on such a protocol. These protocols are not suitable for scaling.
The new protocol family: Avalanche
The Avalanche Protocol allows for more powerful performance of the distributed system. With its implementation, transactions get finalized within a second or two. To compare, one credit card transaction takes at least a few seconds if not more. The testing of the Avalanche Protocol permitted around 19,000 transactions per second. It is not limited to 19 mining pools (as for Bitcoin) or to 11 mining pools (as for Ethereum). The new Avalanche Protocol allows thousands to millions of participants to send transactions. It will be implemented for the creation of a new payments and smart contract platform.
The DeFi Podcast is produced and hosted by Woorton, a leading European digital asset market maker.
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